During a recent talk, Ford CEO Jim Farley said he expects a major price war to begin in the electric vehicle (EV) market that will drive prices per vehicle down to as little as $25,000. Although present supply chain and production issues have prevented anything near a price-war, new manufacturers and models hitting the market just as pandemic-related supply chain issues and lockdown-mediated production restrictions lift promises the flood the market with sales units.

In addition the technology of manufacture is progressing as well, as developers master design and begin adapting it to simply assembly. Farley described the new manufacturing process for EVs, which is vastly simplified, and which may have a significant impact on manufacturing employment in the sector. He described the newly designed EVs as having “Half the fixtures, half the work stations, half the welds, 20% less fasteners. We designed it, because it’s such a simple product, to radically change the manufacturability.”

Farley continued, “So I believe there will be, our industry is definitely heading to a huge price war.” He also talked about how advances in the technology behind EVs would reduce production costs. The Mustang-E currently has an about $45,000 starting price, however of that the battery pack alone costs $18,000, a production price Farley thinks will certainly drop in the coming years as battery technology advances.

Farley also said that Ford is ready to cut distribution costs and advertising to compete during the coming price war,