Ford CEO Jim Farley spoke at the Bernstein Strategic Decisions Conference this week. He noted that he believes manufacturing EVs is going to become less expensive over time, which will lead to a price war among electric car makers offering compelling options for around $25,000.
It really comes as no surprise that Farley forecasted a "huge price war" on electric cars. GM's Mary Barra continues to reiterate that GM aims to beat Tesla on price, offering a number of relatively inexpensive models. Just yesterday, we learned that the 2023 Bolt EV and Bolt EUV are priced much lower than the 2022 models. GM will also bring a well-priced Equinox EV to market, and other models that start at around $25,000. Farley shared via Electrek:
"So I believe there will be our industry is definitely heading to a huge price war."
According to Farley, batteries are going to eventually become less expensive. He said Ford is working on its new platform to help reduce the cost of manufacturing. Farley also mentioned that Ford's electric vehicles will be sold "100% online," and prices will be fixed and non-negotiable.
To top it off, the CEO said Ford is considering cutting costs further related to distribution and advertising. However, he didn't make any specific references to an upcoming $25,000 Ford EV.
The Ford CEO talked about the Mustang Mach-E's $45,000 starting price, explaining that the battery pack costs a whopping $18,000. This makes it difficult for Ford to sell the Mach-E any cheaper, but if it can take the right steps to ensure that future EVs have cheaper battery packs and production costs, less expensive models will be imminent.
Farley went on to say that Ford's upcoming EV platform is significantly simplified, and it will require smaller battery packs. It will be easier to manufacture, and it uses half the welds, fixtures, and workstations used by models built on the current platform. He explained:
“The re-engineering for the vehicle to minimize the size of the battery, since it's so expensive, is going to be a game-changer for these second-generation products."
With all of that said, Farley was honest to admit that it won't be easy to get EVs down to the ~$25,000 price point. However, once all of the plans fall into place, the task may not seem so daunting. An EV price war is already well underway in China, which is a market many automakers are keeping a close eye on.