Ford CEO Jim Farley predicts an upcoming price war in the electric car market. Enough to offer much more affordable electric cars, at prices around $ 25,000.
One of the biggest obstacles to the mass adoption of the electric car is its price. An electric car costs more to manufacture than a thermal car, primarily because of its battery. Ford’s CEO specified during a conference that on the Ford Mustang Mach-E (sold from $ 44,000 in the US), the 76 kWh battery costs $ 18,000 and the charger $ 3,000. That’s almost half the car’s selling price. The man therefore announced that behind the scenes, a price war was being prepared among the car manufacturers to try to reduce manufacturing costs as much as possible, in order to be able to offer more affordable vehicles in particular.
The bar of 25,000 dollars (about 28,000 euros with VAT) is very important in the car sector, as it is roughly the average price of a new car in Europe. In France, according to Argus, it was around 27,000 euros in 2020. It is mainly for this reason that Tesla for several years now has planned the development of an electric car for 25,000 dollars, the hypothetical Tesla Model 2. But it is currently very difficult to offer a car in this price range unless one cuts down on battery capacity and functionality, as Dacia could especially do with its Spring or Volkswagen with its e-UP. These are two city cars with limited range and, above all, a very low margin for manufacturers.
Recipe for a car for $ 25,000
In order to offer an electric car around $ 25,000, the boss of Ford has suggested some ways to reduce costs. The first is inspection of the distribution systemby reducing the number of vehicles waiting in dealers’ parking lots. “Classic” distribution of vehicles would cost $ 2,000 more per. car compared to the Tesla model, which has no dealers but only showrooms. Lack of advertising campaigns (as Tesla does) could also save $ 500 to $ 600 per vehicle.
The biggest cost reduction will come from the battery, because although the price of batteries may rise slightly this year, a drastic drop is expected in the coming years. Jim Farley points out, however, that design has a very big impact on cost reduction, citing the example ofa grille for pick-ups (we are thinking of the Ford F150 Lightning) that allows you to increase the autonomy of 120 kilometers, and therefore potentially use a smaller battery to save $ 3,000. In fact, aerodynamics is a key factor in fuel consumption and therefore in the autonomy of cars.
In order to produce $ 25,000 electric cars, the Ford boss announced that the production lines would be completely reconfigured and that the new platform, still under development, would use far fewer different parts. This is what Tesla managed to do with the rear of the Model Y, which uses two parts instead of the 70 needed for the Model 3.
Not until 2026 at Ford
However, do not be too busy considering buying this future Ford for $ 25,000. In fact, the next generation of electric cars using this future platform will only be so not ready before 2026. The time for the US company to transform its current factories and build 3 battery factories. In terms of model, we can imagine a Ford Puma, although recent rumors announce it for 2025.
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