Stellantis’ $25,000 EV price target clashing with the UAW’s demands

Doug Betts, president of global automotive at J.D. Power, pointed to Tesla’s minimal interiors as an approach that could be adopted by more manufacturers. Betts said $25,000 EVs would definitely open up the market, but he thinks building them would require more cost reductions in addition to the savings realized as battery prices come down in the coming years.

It has been rumored that Tesla could add a $25,000 hatchback to its lineup at some point.

“One of the things about the Teslas is that they’re very spartan,” Betts told Automotive News. “They pull it off in the name of technology. They’ve got the one big screen in the car. There’s not a lot of other stuff so, practically, they’re putting everything into that screen, and they’re probably saving a lot of money by not having all the redundant buttons and things like that.”

Tavares’ $25,000 goal is interesting but not one that can be achieved quickly, said Stephanie Brinley, associate director of AutoIntelligence for S&P Global Mobility.

The industry is going to need more affordable products of all powertrains, Brinley said, to return to U.S. sales of 16 million or 17 million vehicles a year, meaning automakers should be looking to shave EV price tags however they can, even if they’re not beholden to a specific dollar target.

“The broader question and issue is getting electric vehicles that are more affordable price points more so than specifically $25,000 being that price point,” Brinley said. “Because we have some that, with incentives, get that low [although] not very many.”

Another challenge is getting the EV supply chain to the level that it can support an influx of new entries.

“Right now, it looks like EV sales are not necessarily slowing or collapsing or anything of the sort, but the take rate is slowing down a little bit,” Brinley said. “If somebody waved a magic wand and said these are affordable and profitable, and all cars are going to be EV tomorrow, it’s just not possible. “

Bringing out a profitable yet “cheap” EV in the $25,000 range is still about a decade away for most automakers, said Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions. Fiorani sees limitations on which segments manufacturers could enter at that price, with many of them likely being compact models for the time being. The journey to profitability, he said, will take time.

“Everybody keeps saying how Ford is losing money on their EVs, and Tesla is profitable, but it took a decade to be profitable, so expecting the legacy automakers just to be profitable on Day One is absurd,” Fiorani told Automotive News. “Lower the price to $30,000, it’s going to push that profitability even further out.”