Exam SCR topic 1 question 39 discussion

Actual exam question from GARP's SCR

Question #: 39
Topic #: 1

The CRO of an automobile manufacturer in North America prepares a keynote address on risks in the auto sector over the next decade. The CRO highlights the primary technology risks facing its line of internal combustion engine (ICE) vehicles.
At approximately what point will many manufacturers of ICE vehicles experience a significant technology risk?

A. Renewable energy costs fall to USD 0.10 per megawatt hour
B. The cost of battery packs falls below USD 0.50 per kilowatt hour
C. Renewable energy costs fall to USD 35.00 per megawatt hour
D. The cost of battery packs falls below USD 100.00 per kilowatt hour

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Suggested Answer: D 🗳️

by qingyang111000 at April 12, 2024, 9:39 a.m.

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qingyang111000

2 months, 2 weeks ago

Selected Answer: D

3.4.2 According to Bloom-bergNEF, electric vehicles will hit price parity with inter-nal combustion engine (ICE) vehicles once battery pack prices (the single most expensive component of EVs) reach USD 100/kWh. Based on current trends, the threshold of USD 100 is expected to be reached around 2023. After this point, EVs will be as affordable as, and after, even cheaper than, combustion engine vehicles—even without subsidies or further policy incentives, meaning there will be a strong economic incentive to switch and that existing ICE fleets may end up becoming stranded assets.

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Exam SCR topic 1 question 39 discussion

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