The price disparity between ICE vehicles and EVs remains one of the biggest obstacles standing in the way of broader all-electric vehicle adoption, a fact that automakers are painfully well aware of. In fact, Ford CEO Jim Farley previously stated that The Blue Oval doesn’t expect EV cost parity to happen until 2030, though battery prices are dropping a bit faster than previously expected. This is precisely why Ford has shifted gears and is focusing on developing cheaper EVs via a skunkworks team, setting a “non-negotiable” goal to create an affordable model for the masses, as well as ensuring that next gen EVs will be profitable 12 months after they launch. Now, a new report indicates that next gen EVs will be cheaper to produce than ICE models, though that news comes with a bit of a caveat.
This interesting bit of information comes to us via a new report from a company named Gartner – a technological research and consulting firm – which has determined that by 2027, all-electric vehicles will be cheaper to produce than their ICE counterparts, on average. Much of this shift will stem from the simple fact that automakers are investing heavily in that particular area, meaning that EV production costs are expected to fall considerably faster than battery costs. “This means BEVs will reach ICE cost parity much faster than initially expected, but at the same time, it will make some repairs of BEVs considerably costlier,” said said Pedro Pacheco, Vice President of Research at Gartner.
“New OEM incumbents want to heavily redefine the status quo in automotive,” Pacheco said. “They brought new innovations that simplify production costs such as centralized vehicle architecture or the introduction of gigacastings that help reduce manufacturing cost and assembly time, which legacy automakers had no choice to adopt to survive.”
As Pacheco notes here, the cost to repair EVs is expected to rise by around 30 percent between now and 2027, making them more prone to an insurance write-off in the event of a serious accident than an ICE model – likely leading to a surge in insurance rates, which is something that automakers must keep in mind while they ramp up production of all-electric vehicles moving forward.
We’ll have more on Ford’s next gen EVs soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.
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