{"id":32688,"date":"2022-06-01T21:57:05","date_gmt":"2022-06-01T21:57:05","guid":{"rendered":"https:\/\/harchi90.com\/electric-car-price-war-is-coming-says-ford-ceo\/"},"modified":"2022-06-01T21:57:05","modified_gmt":"2022-06-01T21:57:05","slug":"electric-car-price-war-is-coming-says-ford-ceo","status":"publish","type":"post","link":"https:\/\/harchi90.com\/electric-car-price-war-is-coming-says-ford-ceo\/","title":{"rendered":"Electric car price war is coming, says Ford CEO"},"content":{"rendered":"
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Ford CEO Jim Farley believes that the electric car market is going to soon enter a price war with upcoming $ 25,000 models.<\/p>\n

Thanks to production constraints and strong demand, there’s currently nothing resembling a price war when it comes to electric cars. On the contrary, the low inventory and strong demand are resulting in dealerships charging fat premiums for electric vehicles – but one major player in the industry believes that is about to change.<\/p>\n

At the Bernstein Strategic Decisions Conference on Wednesday (via ABC), Ford CEO Jim Farley said that he expects the cost of building electric vehicles to fall in the coming years – low enough to sell some EVs in the ~ $ 25,000 range.<\/p>\n

He believes that this will lead to a “huge price war” in the industry:<\/p>\n

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So I believe there will be our industry is definitely heading to a huge price war.<\/p>\n<\/blockquote>\n

He noted that the Mustang Mach-E starts at around $ 45,000, but the battery pack alone costs Ford $ 18,000 to build. This doesn’t leave a lot of room for lower prices.<\/p>\n

Farley believes that significant cost improvements are coming to batteries, and Ford is developing its next-generation EV platform that he believes will bring significant manufacturing cost reductions.<\/p>\n

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Half the fixtures, half the work stations, half the welds, 20% less fasteners. We designed it, because it’s such a simple product, to radically change the manufacturability.<\/p>\n<\/blockquote>\n

In order to be ready to be more price-competitive during this possible \u201cprice war\u201d, Farley said that Ford is also ready to cut distribution costs and advertising.<\/p>\n

Farley didn’t share any specific plan on a $ 25,000 EV model, but there are already a few projects in the industry.<\/p>\n

VW has its ID.Life concept that the German automaker says is a preview its upcoming ~ $ 24,000 electric car. Tesla has also been talking about launching a $ 25,000 electric car, but CEO Elon Musk recently said that it paused working on the model as the company focuses on ramping up production of its existing vehicles.<\/p>\n

Electrek’s Take<\/h2>\n

That’s an interesting take. I think this year might be one of the rare – if not the only – years where EV battery costs are actually going up due to a bunch of different factors. So when it comes to seeing EV prices going down, I think we may have to wait a little while.<\/p>\n

I think Farley’s point is still correct, but it will likely be closer to 2024-25. I believe EV demand will still far outpace EV production at that point, but there are going to be a lot more options, which should create better competition, including on pricing.<\/p>\n

What do you think? Let us know in the comment section below.<\/p>\n

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