According to foreign media reports, Ford CEO Jim Farley believes that with the arrival of $25000 models, the electric vehicle market will soon usher in a price war Due to production constraints and strong demand, there is no price war in the electric vehicle market at present. On the contrary, low inventory and strong demand are prompting dealers to charge a high premium for electric vehicles. However, Farley believes that this situation is about to change.
Image source: Ford
On June 1, Farley said at the Bernstein strategic decisions conference that he expected the manufacturing cost of electric vehicles to decline in the next few years, low enough to reduce the price of some electric vehicles to $25000, "so I think our industry will surely usher in a huge price war".
Farley pointed out that the starting price of Mustang mach-e is about $45000, but the manufacturing cost of battery pack alone is as high as $18000, so there is little room for price reduction. However, he believes that battery costs will be significantly improved, and Ford is developing a next-generation electric vehicle platform, which will significantly reduce manufacturing costs. In order to improve price competitiveness in this possible "price war", Farley revealed that Ford was also preparing to cut distribution costs and advertising expenses.
Although Farley did not disclose any specific plans for the $25000 electric vehicle, there are already similar projects in the industry. Volkswagen said that id.life is the pilot version of its upcoming $24000 electric vehicle. Tesla has also been talking about launching a $25000 electric car. However, musk recently said that since Tesla is focusing on increasing the production of existing models, it has suspended the work on this model.
Foreign media electek believes that the electric vehicle price war mentioned by Farley is unlikely to occur this year. Due to a series of factors, the battery cost of electric vehicles is rising this year, so it may take some time for the price of electric vehicles to decline.
However, electek still agrees with Farley that the price war in the electric vehicle market may occur from 2024 to 2025. At that time, the demand for electric vehicles will far exceed the output of electric vehicles, and consumers will have more choices, which will bring competition in price and other aspects.