First new electric car costs the SAME as petrol version: Vauxhall confirms price parity for Frontera EV

Vauxhall has confirmed its claim to be launching the first new electric car that costs the same as its petrol alternative.

The new battery and hybrid versions of the forthcoming Frontera SUV will both cost from £23,495 when order books open in the autumn, the company said.

It is the first showroom example of a drop in electric car prices compared to combustion engine alternatives, a sign that the Zero Emission Vehicle (ZEV) mandate is forcing manufacturers to bring cheaper electric models to market.

However, Vauxhall’s UK boss has admitted that while the company has achieved price parity for customers, it will still take a number of years before ‘profit parity’ is achieved.

Vauxhall confirmed in April that it will reintroduce the Frontera model name in 2024 after a 20-year hiatus.

The brand said drivers will have a choice of an electric or petrol-hybrid powertrain, but only today was it revealed that both will cost the same.

According to the company, Frontera Electric will be the first new electric car to “eliminate the price gap that normally exists between electric and petrol versions of the same car”.

The company calculated that the average price increase for electric cars compared to petrol cars on the UK market is currently 31 percent.

It also means the Frontera is one of the cheapest family-friendly electric cars available from UK dealers, coming in at £3,500 cheaper than rivals such as the MG4 EV and almost £4,500 cheaper than the Mazda MX-30 SUV.

For the entry-level price of £23,495, buyers get the Frontera Electric with a 44kWh battery pack that supplies energy to a 112bhp single electric motor on the front axle.

This gives it a range of 186 miles and a 0-62 mph sprint time of 12.1 seconds. It can also be charged at speeds of up to 100 kW.

A more expensive Long Range version with a larger battery pack and two electric motors will be released next year and could achieve a range of 398 kilometers on a full battery.

For just under £23,500, buyers could opt for the hybrid petrol version.

This uses a combination of a 1.2-liter three-cylinder petrol engine with 99 hp, coupled with a 48V electric motor with 28 hp in the gearbox.

For an additional £1,500, customers can upgrade to a more powerful 134bhp hybrid powertrain.

Sign that ZEV mandate forces brands to lower electric vehicle prices

Vauxhall’s groundbreaking price parity announcement is a major sign that the government’s binding sales targets for electric cars set from this year are already having the desired effect.

The ZEV mandate came into effect in January, requiring major automakers to sell an increasing share of their electric cars each year until the date they ban sales of new gasoline and diesel models.

From 2024, more than a fifth (22 percent) of all models sold by major brands will have to be electric cars to avoid financial penalties of up to £15,000 per vehicle below the threshold.

The minimum sales requirement for electric cars will rise to 28 percent next year, gradually increasing to 80 percent by the end of the decade. However, that could change quickly after the Department for Transport confirmed it wants to bring forward the ban on new cars with internal combustion engines by five years, to 2030.

The mandate was put in place to force automakers to bring a wider range of electric car models to market, particularly cheaper options than what is currently on the market.

Ministers believe this is a better way to boost sales of electric cars in the run-up to the ban, without having to introduce incentives such as purchase subsidies, which would have to be funded by taxpayers.

Vauxhall’s UK boss says the company is on course to achieve a 25 percent electric sales mix this year, before the arrival of the new Frontera and larger Grandland Electric.

James Taylor, General Manager, said Coach that the arrival of the two new electric SUVs should increase the share of electric car sales to around 30 percent, which is already higher than next year’s target.

However, he added that it will be “very difficult” for the company to hit the 33 percent threshold for 2026 “without a stimulus” for the EV market.

He told the auto title that carmakers are doing their best to increase the availability of electric cars with new models, but said this will only “help a little bit” in meeting the mandate’s binding sales share requirements in the short term.

Other brands, including Ford, have indicated they could limit the number of new petrol cars delivered to Britain as part of a bid to artificially increase the share of electric cars in sales in the coming years to meet ZEV thresholds.

Price parity for consumers, but not profit parity for manufacturers

The price of a new electric car will fall to the same level as an equivalent new petrol or diesel model “much faster than initially expected”, a report published earlier this year claimed.

According to the American market research firm Gartner, electric cars will on average be cheaper to produce than cars with combustion engines in 2027.

The company expects construction costs to fall significantly faster than the cost of batteries. Batteries are the most expensive part of an electric car, accounting for about 40 percent of the vehicle’s price.

While Vauxhall’s Frontera prices suggest this prediction has been underestimated by three years, Taylor suggests the manufacturer will take a hit if it drastically cuts the prices of its electric cars.

When asked by Autocar, he said the company is “still a number of years away” from achieving similar profits from electric and petrol car sales.

What will help reduce costs for automakers is a robust local supply chain for batteries, but also support to increase demand for used electric cars. The residual value of electric cars is currently estimated to be on average 10 percent lower than that of cars with an internal combustion engine.

“It’s one thing to build them for the same cost, but if their used car value is lower than a comparable combustion engine, that obviously has a significant impact on our profitability,” Taylor explains.