Ford CEO predicts EV cost savings to come thanks to cheaper batteries, "lower labour content"
At the 2023 Ford Capital Markets Day, Ford CEO, Jim Farley, commented on the future of electric vehicles, specifically focussing in on the pricing side of things, according to Reuters. He predicts that electric vehicle manufacturers will only begin to see significant gains in the pricing department once the manufacturing process becomes more efficient and cheaper.
According to Farley, simplifying the manufacturing process will involve "lower labour content," simpler EV designs, and fewer components overall. Cheaper components, especially smaller batteries made with cheaper materials, will also be an important step in getting EVs to price parity with regular ICE cars. Farley, however, goes on to say that he expects any price reductions to only materialise between 2030 and 2035.
A simpler production process could come by way of automation and at the cost of jobs in the automotive sector, which has already seen a number of lay-offs in recent months. Volvo and Polestar already cut 10% of their labour force a few weeks ago, despite the ongoing electric vehicle boom.
Farley also mentions that collaboration between companies in the electric vehicle space is going to be essential to success, especially for smaller companies that cannot afford to invest into charging infrastructure. This comes mere days after Ford announced that it would be working with Tesla to include NACS charging hardware in its upcoming electric vehicles.
It's also important to note that there is a lot of variety in the approaches EV manufacturers are taking. While it recently came to light that Ford was losing tens of thousands of dollars per electric vehicle it sold, Tesla is known for having some of the highest profit margins in the entire automotive industry and has recently made significant price cuts to much of its EV line-up. Meanwhile, manufacturers like Chevrolet are planning to release vehicles like the US$30,000 Equinox EV that will qualify for tax incentives that bring the price down to US$22,500.