EV cost parity may not arrive until 2030, suggests Ford CEO

EVs may not achieve cost parity with gasoline cars until after 2030, Ford CEO Jim Farley said Wednesday.

Speaking at an investor conference, Farley said that, for most automakers, EVs will remain more expensive to manufacture than internal-combustion cars until the end of the decade, reports Reuters, adding that this counters analysts’ prediction that EV cost parity with gasoline cars could be reached by 2025.

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Farley predicted that as second and third-generation models are introduced between 2030 and 2035, EV costs will decrease due to “dramatically lower labor content” that simplifies manufacturing and requires fewer parts, as well as smaller battery packs, reiterating a point made earlier this year.

Farley also said automakers could save more money by switching to online sales, and generate additional revenue from “new software-driven digital services,” according to Reuters.

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EV battery cost took a wrong turn in 2022, potentially extending the time before EVs and internal-combustion vehicles reached cost parity. At the same time, market constraints have been setting the stage for an EV price war.

In the meantime, that may mean that some automakers simply opt not to compete in segments where they can’t see positive margins in the near future. But as Consumer Reports has suggested, those that sit it out may lose market share they can’t bring back. So while this may be a very transformative period in mobility history, many manufacturing hurdles and serious financial challenges will need to be solved first.