We previously discussed Ford’s declaration that it has the battery supply to build 600,000 electric vehicles annually. Although this is excellent news for the business and the move to EVs, I see a challenge for Ford. Its greatest rival will outperform it in a crucial price range, but Ford can overcome this issue by providing more reasonably priced EVs in the US.
TWO VEHICLES THAT MIGHT COMPLY (OR BUDGET) There are little details regarding the new mid-sized crossover, but Ford has provided some hints. The first is from the illustration in the most recent announcement:
They actually don’t provide us any more information on the mysterious EV, but we do know that it will be made in Cologne and that more EV manufacturing facilities are being set up. It seems to be less focused on performance than the Mach-E, and if that is the case, it should be less expensive.
However, Ford is also producing several small crossovers for Europe. Additionally, Ford revealed the Puma EV, which would be coming out soon. Although there are currently few information available, we do know that the gas-powered Puma starts at less than $20,000. (US). It isn’t currently offered for sale in the US, although it would make a good economic car. The highest estimate I could come up with at this point was $10,000 extra for a BEV, which would result in a very cost-effective EV.
In certain ways, it doesn’t make sense to provide cheap electric vehicles in the US because every manufacturer experiences backorders, even for more costly models. However, this situation won’t last forever.
LOWBALL GMS STRATEGY One of Ford’s main rivals has revealed how it plans to catch up to Tesla. According to GM CEO Mary Barra in an interview with the Associated Press, the company’s plan to overtake Tesla by 2025 is to just undercut them on price.
According to Barra, you need to target consumers who fall between the price points of $30,000 and $35,000 if you want to sell 30, 40, or even 50% of EVs.
If you’ve been following Tesla for a while, you may remember that the firm first offered a $35,000 Model 3, which it only briefly delivered in 2019. There wasn’t much of a market for a low-range version of the car, though, as it wasn’t very profitable for Tesla. Additionally, the company had no trouble selling more expensive versions of the car to generate additional revenue. As a result, Tesla initially removed it off the menu (you couldn’t find it online, but you could phone or go to a Tesla store to buy one), and then completely eliminated it a year later.
The cheapest Tesla available now costs more than $40,000, and you’ll have to wait a while before one shows up in your driveway. The American middle class, however, has been left in the dust by the Tesla Model 3 and the typical cost of a new car. Tesla isn’t doing too badly because there is still a waiting list for its cars, and the outrageous auto loans taken to buy costly cars—especially old cars—are causing a massive rise in repossessions that might hurt the entire industry.
However, GM won’t be taken off guard by this. In addition to having ready access to less expensive EVs, the corporation now has two of them. The Bolt EV and Bolt EUV will both have starting prices under $30,000 beginning with a discount on 2022 models and continuing with a constant low price on 2023 and later generations. Even though the Bolt family has several shortcomings (the slow 50 kW DC fast charging is a major one), for the price, it’s really not that bad.
But GM will also have you covered if you’re seeking for something better. The Equinox EV will cost $30,000, which is less than most other manufacturers’ offerings and just over the Bolt EV and Bolt EUV. This beginning price will get you a car with Ultium battery packs and charging that is more than three times faster, however in a strong market, you should be able to obtain it for less.
Personally, I’ve been keeping up with all of these advances (as it’s a requirement of my job here at CleanTechnica) and have recently started to feel more positive about GM. With the Bolt EV fire recall coming to a successful conclusion, prices falling to realistic levels, plans being made for more EV charging points, and so on, it is obvious that the company is taking the switch to EV very seriously.
CHANGING COURSE ANDAMP; OFFERING MORE CHEAP EVS ARE NEEDED BY FORD If GM controls the entire bottom end of the market, Ford will have a huge problem if it just sells less expensive EVs in regions like Europe and Australia. Despite the fact that the average cost of a car is fairly high right now, we must remember that the average is just that—average. Both above and below that price point are equally abundant.
You are missing out on half of the market if you observe a standard distribution (the bell curve). The $20-35k category is hot for new automobiles, therefore it’s clear that the used market (particularly the heavily used and beater submarkets) takes care of the long tail on the left side of that curve.
Do you need proof? Visit a Chevy dealer to try out a Bolt EV or Bolt EUV test drive. Other than the ones that are awaiting a new battery as part of the recall, they won’t even have any on hand, and everything that is in transit is probably already sold out. When gas prices are as high as they are right now, people want EVs strongly.
More accessible EVs go beyond equity and hastening the transition to clean transportation. It’s beneficial for those who might theoretically afford a vehicle that costs more but don’t want to make a $1,000 monthly payment. Making it possible for thrifty people and money-conscious people to purchase a car at that price benefits both their monthly spending plans and the health of the market as a whole.
Ford must participate in it.
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