CEO Jim Farley told this in the Bernstein Strategic Decisions Conference on Wednesday that the $25,000 price tag will democratize EVs. Materials to build that vehicle will cost around $18,000, he said. “So I believe there will be our industry is definitely heading to a huge price war," Farley said. Ford, like Tesla, may not have to buy advertising to sell EVs, which now amounts to $500 to $600 per vehicle, Farley said.
A price war already is happening in China, where more than half the electric vehicles in the world are sold today, Farley said. The most popular one is a van made by Chinese manufacturer Wuling that costs about $8,000, he said.
Ford CEO also said that big cost reductions are coming with new battery chemistries that use fewer expensive and scarce precious metals such as nickel and cobalt, he said. Plus, EVs will take less time and labor to build, saving more money, Farley said. Farley conceded that getting to the lower price point will be challenging, with many things to work on at once.
New EVs, he said, also will be designed for optimal aerodynamics so they can use the smallest possible battery to get more range. Redesigning the body of an electric full-size pickup truck for lower wind resistance can add 75 miles (120 kilometers) of range from the same size battery, Farley said. The additional range, he said, cuts another $3,000 from the battery cost, he said.
“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," Farley said.
It currently costs much more to build an EV than it does one powered by a gas engine, Farley noted. The company's Mustang Mach-E electric SUV, with a starting price around $44,000 but can run much higher, costs about $25,000 more than a comparable Ford Edge gas SUV, he said.
The battery cost alone is $18,000, and the charger adds another $3,000.
Farley also confirmed Wednesday that Ford is working on an electric vehicle made specifically for ride-hailing services such as Uber, saying that product would fit well into Ford's other commercial offerings. He gave no other details.
