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Ford CEO says a “price war” between electric cars is coming

Today, the purchase of an electric car is reserved for people with generally high purchasing power. This is something that the general public expects it to change over the years and the democratization of different technologies. Ford CEO Jim Farley himself has spoken about this future of the electrical sector, predicting that the market will soon enter a “price war” in models around $25,000.

Currently, the automotive sector, and particularly the electrical sector, is experiencing turbulent times due to the increasingly high cost of acquisition of raw materials, as well as the lack of supplies, something that is delaying the expected democratization of electric cars and its corresponding decrease in purchase prices by the general public. Years ago it was predicted that for the current year, the electric vehicle would already be at price levels similar to those of thermal vehicles, however, mainly due to the two reasons mentioned above, these margins will still have to wait a few years to become a reality.

However, one of the most important companies in the entire automotive sector, such as Ford, is betting on the arrival of new models that are more affordable and accessible to the general public. Jim Farley, the CEO of the American company, has presented his credentials during the Bernstein Strategic Decisions Conference last Wednesday, June 1, who hopes that the ease of access to an electric vehicle will come hand in hand with a decrease in the cost of its manufacture, and places the aforementioned “price war” at around the $25,000 line.

The possible decrease in manufacturing costs will bring about the complete substitution of thermal vehicles in favor of electric ones, since, once this event takes place, price equity will be a reality and, due to the facilities provided by “ zero emissions” with respect to combustion vehicles, will finally make the balance fall on the side of models powered by electricity.

Ford will launch an electric variant of the Puma, which will be positioned as the access model to the electric range.
Ford will launch an electric variant of the Puma that will be positioned as the access model to the electric range.

Farley, during his presentation, pointed out this possibility, although he stressed how difficult such a movement is today. In this he gave as an example his star electric model, the Ford Mustang Mach-E, which has a price in the United States of around 45,000 dollars (in Spain it is from 63,700 euros) but only the battery pack already generates a cost for the mark of about $18,000 per unit built. This leaves very little room for price decreases.

For this, we will still have to wait a few more years, as Ford is currently developing its new exclusive platform for the company’s electric vehicles. This next generation of electric platforms will be the one that brings with it the expected decrease in the acquisition rates of these cars. This is due to the fact that said platform uses half the number of fixings, welding and a lower workload, so its greater simplicity when it comes to manufacturing will have as a synonym a significant reduction in its final price for the vehicle customer.

The CEO, despite avoiding all questions regarding a possible future launch of a $25,000 Ford, did admit that the American company already has action plans for this possible “price war”, such as reducing the cost of distribution and advertising. Let’s remember that Ford hopes to launch an electric variant of the car in the coming months. Puma, which will mean a significant price decrease with respect to the only electric that the company markets today, the Ford Mustang Mach-E.

Other companies in the automotive sector are already thinking about launching a possible electric model that places its price below 25,000 euros, such as Volkswagen, which is already finalizing the development of its model located below the present ID.3; this is known for now as Volkswagen ID.Life, but later it will take the name of ID.2. This model will be made in Spainaccording to the latest confirmations.

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