I started writing about electric vehicles more than a decade ago.

Back then, only Tesla (Nasdaq: TSLA) was making EVs.

Prices were astronomical.

That’s because, in an EV, the battery pack costs a fortune.

Electric Vehicle Battery Pack

In 2010, battery prices averaged more than $1,100 per kilowatt-hour (kWh). Skeptics said EVs would never be cost competitive.

But what a difference a decade makes…

Driving Down Battery Prices

Last year, EV batteries cost less than $156/kWh. By 2030, the average price could be down to $61/kWh!

High-volume, automated manufacturing continues to lower the cost of producing lithium-ion batteries. And reducing the cost of the battery pack reduces the overall EV cost.

Tesla’s massive Gigafactory in Sparks, Nevada, is a great example. In this massive Gigafactory, automation is key.

Tesla Gigafactory

Automation will be crucial to large-scale cost reductions. When battery costs hit $100/kWh, EV prices will become even more competitive with internal combustion engine (ICE) vehicles.

That should happen this year or next.

Tesla claims it’s already hit that mark. But it doesn’t matter.

Because consumers are already buying as many EVs as manufacturers can produce.

And nearly every car manufacturer on the planet has announced upcoming EV models. Some, like Volkswagen, will be producing EVs exclusively in a year or two.

All About Costs

The economics of owning an EV compared with an ICE vehicle are already a no-brainer. But it’s not about the upfront cost of the car.

On the surface, many ICE vehicles can be purchased for less than a comparable EV. But we have to look at the total cost of ownership. When we do, EVs win every time.

Electric motors run forever. EVs have no gas tank, fuel system, engine, exhaust system, radiator or timing belt.

These wear items typically need maintenance or replacement during the life of an ICE vehicle. And the brakes in an EV can last 100,000 miles or more.

And those expensive battery packs we were talking about earlier? Tesla claims its current battery packs are designed to last 300,000 to 500,000 miles!

With aluminum bodies and chassis, Tesla cars are built to last. My wife and I plan on keeping our Model X for a long time.

After all, the only reason we get rid of cars is because they start to wear out. And with our EV, that has yet to happen…

Tipping in Our Favor

The EV floodgates are opening. We’ve reached the EV adoption tipping point.

Technology, combined with rising demand, is driving down EV battery costs. So it’s no surprise that EVs are disrupting the auto sector.

Every investor should have a few EV pick-and-shovel plays in their growth portfolio.

You could invest in some of the more progressive EV manufacturers like Tesla. However, I also like EV supply chain companies. These include battery makers and battery material suppliers.

EVs are here to stay, and there are big gains to be made in this sector.