Two auto giants are looking to make ‘millions’ of electric vehicles for under $30,000 each.
At one point during Tuesday’s conference call, a reporter asked for a definition of the word “affordable.”
The question was posed to Ken Morris, executive vice president of electric, autonomous and fuel cell programs at General Motors (GM) – Get General Motors Company Report, and Rick Schostek, executive vice president of corporate operations at American Honda (HMC) – Get Honda Motor Co. Ltd. Report.
Millions of Cars
The two executives had announced that their companies would develop a series of affordable electric vehicles based on a new joint platform, allowing production of millions of cars starting in 2027.
Morris said the vehicles are expected to be priced below $30,000, which would make them cheaper than most electric vehicles on the market.
The average price of a 2022 Chevrolet Bolt starts at $31,995, but the future of this mass-market electric vehicle is somewhat clouded, given the Bolt’s low delivery numbers last year.
The Ford F Electric Mustang is going for $43,895 and Volkswagen’s ID. 4 starts at $41,230.
Several commenters dismissed the automakers’ plans for an EV under $30,000.
“GM and Honda will never produce enough EVs in the next 5 years to drive the price below $30K, and if they do, they’ll be losing thousands on each one they sell,” one person tweeted.
“Road towards bankruptcy,” another commenter declared.
“I too will have developed a low cost electric car by 2027,” another said. “Please, please, buy my stock!”
But another commenter said the collaboration was “logical.”
‘EV Engineering Prowess’
“Bringing together the EV engineering prowess of Honda and GM,” the person tweeted. “They’ve both done so well on their own, how could adding two teams like this together not benefit both?”
Tesla (TSLA) – Get Tesla Inc Report is the EV maker that the other automakers are pursing like greyhounds racing after an electric rabbit.
Last month, Tesla announced price increases across its entire range of vehicles, with CEO Elon Musk tweeting that the company is “seeing significant recent inflation pressure in raw materials and logistics.”
The Model 3 Rear-Wheel Drive saw its price increase to $46,990 from $44,990 while the Long Range version of the vehicle saw its price increase to $54,490 from $51,990.
Sticker price is a barrier for many consumers who are considering buying an electric vehicle, according to Cars.com, which found that 52% of Americans consider cost a significant obstacle to purchasing an EV.
EVs are gaining awareness and popularity, Cars.com, said, but actual purchases are lagging to an extremely limited supply and other factors, so that EVs constitute less than 1% of the vehicles are on the road.
EV searches on Cars.com have nearly doubled since last year and have increased 173% from Feb. 24 to March 25.
Cars.com said the war in Ukraine, proposed infrastructure legislation, rising gas prices and supply-chain issue are among the issues spurring consumer interest.
‘Recent Macro Events’
“Recent macro events including historic inflation, rapidly rising gas prices, and debate over oil production and supply have transformed consumers’ mere curiosity about EVs to an unprecedented level of interest,” Jenni Newman, editor-in-chief for Cars.com, said in a statement.
Battery costs are a major factor in building electric vehicles, with EV makers raising prices in response to rising inflation that has pushed the price of nickel, a key component in EV batteries, to record high levels.
GM and Honda said they would look to collaborate on future EV battery technology “to further drive down the cost of electrification, improve performance and drive sustainability for future vehicles.”
GM is working to accelerate new technologies like lithium-metal, silicon and solid-state batteries, while Honda “is making progress on its all-solid-state battery technology which the company sees as the core element of future EVs.”
Solid-state batteries are more stable and compact than lithium-ion batteries, which are used in most of today’s EVs.
Solid-state batteries are lighter, have more energy density, offer more range, and recharge fast, the consumer intelligence company J.D. Power noted.
Other automakers are injecting money into solid-state battery projects.
Ford (F) – Get Ford Motor Company Reportand BMW (BMW.DE) are investing in Solid Power, a solid-state battery startup in Colorado, while Hyundai invested in SolidEnergy, a startup spun off from the Massachusetts Institute of Technology.
Panosonic has said that it will produce 4680 battery cells for Tesla. While not solid state, the 4680 is about the size of a soda can.
