Ford chief Jim Farley predicts a price war close to the electric car market. Enough to offer much more affordable electric cars, priced at 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, mainly because of its battery. The CEO of Ford stated during a conference that the Ford Mustang Mach-E (sold from $ 44,000 in the United States), the 76 kWh battery costs $ 18,000 and the charger $ 3,000. That’s almost half the selling price of the car. The man therefore announced that a price war was being prepared behind the scenes, between car manufacturers, to try to minimize manufacturing costs, in order to be able to offer more affordable vehicles.
The $ 25,000 bar (about $ 28,000 with VAT) is very important in the automotive industry as it is roughly the average price of a new car in Europe. In France, according to Argus, it was about 27,000 euros in 2020. It is especially for this reason that Tesla has been planning for several years the development of an electric car at $ 25,000, the hypothetical Tesla Model 2. But it is currently very difficult to offer a car in this price range, unless it reduces battery capacity and functionality, as Dacia was able to do especially with its Spring or Volkswagen with its e-UP. These are two urban cars with limited autonomy and above all a very low margin for manufacturers.
Recipe for a $ 25,000 car
To get a $ 25,000 electric car to offer, the head of Ford has come up with some ways to cut costs. The first is Distribution system review, by reducing the number of vehicles waiting in dealership parking lots. The “classic” distribution of vehicles would cost $ 2,000 more per car, compared to the Tesla model that has no dealerships but only showrooms. Lack of advertising campaigns (as Tesla does) could also save between $ 500 and $ 600 per vehicle.
The biggest cost reduction will come from the battery, as although the price of batteries could rise slightly this year, a drastic drop is expected for the coming years. Jim Farley points out, however, that design is of great importance in reducing costs, citing the example ofa grille for pick-up (think of the Ford F150 Lightning) that allows to increase the range of 120 kilometers, so you can 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 be able to produce $ 25,000 electric cars, the head of Ford 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 back of the Model Y which uses two parts instead of the 70 needed for the Model 3.
Not before 2026 at Ford
However, you shouldn’t be in too much of a hurry to consider buying this future $ 25,000 Ford. In fact, the next generation of electric cars using this future platform will only be so is not ready until 2026. The time has come for the American company to transform its current factories and build 3 battery manufacturing plants. Batteries should also evolve as Ford talks about new chemistry. Surely the unified cells planned for 2023. As for the car model, we can imagine a Ford Puma even if the latest rumors announce it for 2025.
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