Ford CEO Jim Farley believes we are looking forward to a future of harsh financial competition among electric car manufacturers as EV production prices continue to fall.
At the moment, you can safely expect to pay more for a battery car than you would for an ICE car, a difference that ongoing logistic disruptions and chip shortages only serve to aggravate. However, the demand for electric cars is still as high as ever, leaving the automakers with little incentive to prioritize making affordable models first.
This may change soon, Farley warns, pointing out that multiple companies have recently announced EVs priced around $25,000 USD coming to the market en masse. When they do arrive, the customer base will explode, leading to an inevitable price drop across the board. Furthermore, expanding the scope of online sales will put a lid on dealership premiums, which have been quite extreme lately.
As a consequence, more manufacturers will be interested in offering deals that undercut the competition in order to get a firmer foothold on this relatively new market.
Having said all of the above, Farley admits it may not be a concern for the nearest future. According to him, the all-electric Mustang Mach-E is still pricey at $45,000 and upwards from that, largely because its traction battery alone accounts for one-third of the production cost. Until a solution is found, significant cost cuts are unlikely.