Title: Improving electric vehicle economics | McKinsey
Headings: 
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An industry in a jam
Consumer preferences on electric vehicles
Product availability
Electric-vehicle economics
Regulatory tailwind
Accelerating toward profitability
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Optimize electric-vehicle designs for the market
Exhibit 2
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Design simplifications and value-neutral decontenting
Optimizing for urban mobility
Final assembly optimization
Partnership during the transition
Boosting margins beyond cost cutting
Communicating electric-vehicle economics to customers
What a teardown of the latest electric vehicles reveals about the future of mass-market EVs
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Exploring new business models
Operating in an increasingly complex environment
Product design
Capital allocation
Changing mobility dynamics in cities: Micromobility’s role
Fast forward to 2025: Electric-vehicle cost parity
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Content: Sales in 2018 only provide a partial view, given that EVs accounted for less than 5 percent of sales in most markets. However, the pace of change tells a different story, with annual sales’ growth rates now frequently in the range of 100 percent or more. Product availability
On the supply side, this increasing demand will be met with a broader set of choices. Today, new EV models are launching at a rate of approximately 120 a year, providing significantly more options regarding vehicle segment, performance, feature set, and value. Compare this with the prior seven years, during which new plug-in-hybrid-EV (PHEV) and battery-EV (BEV) launches globally averaged about 20 per year, often with premium prices. Historically, domestic Chinese OEMs provided the widest selection of models, but by 2020, most global OEMs across China, Europe, and the United States will offer a broad range of vehicles and price points. Electric-vehicle economics
Our survey from 2017 also revealed that an EV’s purchase price and driving range are the biggest hurdles to wider consumer adoption—and both are linked inextricably to battery economics. Today, a typical BEV in the United States, priced around $30,000, does not provide a reasonable payback period for many buyers, given the size and cost of a battery pack; to recoup the price premium for an EV versus an ICE vehicle through savings on fuel and maintenance, the payback period is five to six years for an average US buyer driving 13,000 miles a year. For high-mileage drivers exceeding 30,000 miles per year—such as full-time cab, Uber, and Lyft drivers—EVs are already “in the money” during a typical two- to three-year ownership or lease period.