Ford CEO reckons an EV price war is coming

The global automotive industry is headed for a price war as EV costs drop and they become priced around US$25,000 (NZ$38,350), says Ford president and chief executive Jim Farley.

He told the Bernstein Strategic Decisions Conference the US$25,000 price tag will make EVs accessible to everyone, with an EV’s materials likely to cost about US$18,000.

“So I believe our industry is definitely heading to a huge price war,” says Farley, according to media reports.

He says it now costs much more to build an EV than an internal combustion engine (ICE) car, with the EV’s battery pack about US$18,000 and a charger adding US$3000.

New battery chemistries using less expensive materials than current ones will see big cost reductions, while increased robotics and reduced time to build will save more money, Farley explains.

Ford also aims to reduce distribution costs, which Farley believes may be achieved by cutting the expense of keeping a large supply on dealer lots and reducing advertising costs.

Farley expects aerodynamically designed EVs will use small batteries but get more range.

Media also report that Ford plans to diversify and increase profits by selling software services, including driver-assist and autonomous features that could be rented.

Farley points to an EV price war already underway in China but admits it will take some time to spread globally.

He’s also confirmed Ford is developing an EV for ride-hailing services such as Uber.

Meanwhile, Ford officially began US retail deliveries of its electric F-150 Lightning around May 26 and is ramping up production to meet about 200,000 reservations.