The price of manufacturing electric vehicles might not equal that of gas-powered vehicles until after 2030, when a less labor-intensive process becomes available, according to Ford CEO Jim Farley.
Prices for construction of electric vehicles will stay above those for internal combustion engine vehicles for multiple generations of electric vehicle models to come, Farley said Wednesday at an investor conference, according to a report.
Industry analysts maintain cost parity between electric and internal combustion engine vehicles could be as close as 2025, but Farley argues that a significant portion of the automotive manufacturing industry’s cost saving will be the product of a “dramatically lower labor content” from 2030 to 2035, he said.
By then, it is expected that the electric vehicles will be produced with smaller batteries, cheaper materials, and fewer parts, the report noted.
Technological developments via software-driven digital services in the next decade will also lead to higher revenue and lower distribution costs, according to Farley.
Ford’s software services have 600,000 subscribers at present, and that number is likely to grow as its Blue Cruise driver assistance and Ford Pro commercial customers continue to provide funding for services, including fleet management, dynamic routing, and electric vehicle charging, according to the report.
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Farley predicts an “acceleration of cooperation” regarding industry-wide consolidation in the years leading up to 2030, he said.
“Cooperation is essential,” Farley said, adding it will be beneficial for corporations without the resources necessary to develop an ecosystem for electric vehicles.
