U.S. carmakers have invested a massive amount of money in making EVs, but it still hasn't paid off
Automakers across America have plowed millions of dollars into their electric vehicle strategies in recent years. Whether it’s new product development, engineering to create lighter, more powerful motors or investment in new factories, they’ve all spent a small fortune. Now, it turns out that cost may not be paying off as EV makers across America reportedly lose thousands on every car they sell.
U.S. automakers lose roughly $6,000 on every $50,000 EV they sell in America, according to a new report from analyst firm Boston Consulting Group (BCG). That figure comes hotly on the heels of similar sky-high losses from companies like Rivian $RIVN and Lucid $LCID. Earlier this year, Rivian revealed that it lost $33,000 on every truck sold, while Lucid topped that figure with its eye-watering $400,000 losses on each car sold. Yikes.
Rather worryingly, the report from BCG warned that those losses are likely to continue well into the next generation of supposedly cheaper, more efficient electric cars. As the report explains:
We also estimate that OEMs will only be able to close half of this cost gap by making the right technology choices; economies of scale as automakers ramp up production will help, too, but they won’t make up the difference. Then there is the impact of looming Chinese imports to consider; market prices will likely contract further, exacerbating the profitability challenge. At some point, it will become untenable for OEMs to lose money on every vehicle they sell.
That’s a pretty damning insight into the electric car market across America, and could explain why a company such as Ford $F is reportedly changing its tact and switching from big, expensive EVs to smaller, cheaper models.
This could help them actually start building the kinds of electric cars that American drivers want, which was another area the BCG report investigated. According to the paper, there’s currently only one car on sale in the U.S. that meets the demand for the next wave of EV adopters.
Those customers want a car that costs $50,000 or less and can cover 350 miles or more on a single charge. The only car that manages that? Well, it’s the Hyundai Ioniq 6 RWD Long Range, of course. Other models like the Rivian R1S deliver on range, but fall short on price, while cars like the Chevrolet Bolt are short on range but perform much better on pricing.
Is that all it would take for you to pivot to an EV, an attractive price tag and enough range to get you from Birmingham, Alabama, to New Orleans? Or is there another little je ne sais quoi that you’d like your first EV to possess?
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