Shulou(Shulou.com)11/24 Report--

As more and more details of Tesla's $25000 electric car emerge, it will have a huge impact on automakers, the car market and buyers. But according to analysts, the cheap new electric car will be comfortable to drive, but it may be a bit crude.

Many car buyers may believe that the most important factor driving down the cost of electric cars is the expanded $7500 tax credit in the US last summer, followed by Tesla's aggressive cost-cutting to gain more market share. The root cause, however, is that car companies are improving electric vehicle technology and developing vital new manufacturing processes.

This has led to the emergence of more new models and made electric cars cheaper and more mainstream. Tesla has promised that the company's next generation of electric cars, which are due to go on sale next year, will be sold at a lower price, with prices expected to start between $25000 and $30, 000. No matter from the environmental, economic, financial or political aspects, the rise of popular electric vehicles will be an important milestone. The Biden administration is pushing for reforms to actively reshape the car market in favor of electric vehicles faster than previously expected.

The average price of a new car in the US is $48763, up 30 per cent in the past three years, according to the Gloria Blue Book (Kelley Blue Book). If the price of electric cars is much lower than this level, the saying that "electric cars are the product of the elite rich" will no longer exist. If these new models become popular, they will consolidate the position of electric vehicles as mainstream consumer goods. At the same time, it will also make Tesla, the repositioned Ford and General Motors, and a number of electric car start-ups that have not yet been eliminated into mainstream carmakers.

"Tesla has to launch cheaper cars if he wants to enter the mass market," said Dan Ives, an analyst at Wade Bush Securities. He thinks Tesla's cheaper model will be a compact luxury car similar to the gasoline-powered Audi A3, whose basic model starts at $35400. "the mass market will be the most important market for electric cars," Ives said. "

Tesla's cheapest model is the basic Model 3, with a suggested retail price of $41990. There are currently three basic electric vehicles with suggested retail prices of less than $30,000, namely the Chevrolet Bolt, the Bolt EUV and the Nissan Leaf, according to market research firm Edmunds. But the average selling price of the first two models in March was still more than $30,000, while the average selling price of the Leaf was more than $34000.

Low-cost electric vehicles are one of a large number of new electric vehicles that have been put on the market, and more than 60 new electric vehicles are expected to be on the market in the next few years. Volkswagen Group announced on March 15 that it would launch an ID.2 model of less than 25000 euros ($27465) in the European market. Start-up Fisk plans to launch a $29900 crossover PEAR in the US next year, while GM plans to launch a Chevrolet Equinox SUV for less than $30,000 in the fall.

Mr Ives said most companies would compete fiercely in the compact car market, with global sales of compact electric cars likely to reach 10 million over the next five years, although carmakers had focused less on small cars and on SUV.

All of these are prices before last year's inflation reduction Act (Inflation Reduction Act) extended tax breaks, which allow American buyers to buy most electric cars made in North America for up to $7500, but the incentives are becoming increasingly complex, including eligibility based on battery origin. There are also more financing options in the car loan market designed for environmentally friendly cars.

The biggest problem facing cheap electric car manufacturers the rise of cheap electric cars has brought a series of problems for carmakers, but the biggest question now is: what kind of electric cars are consumers likely to get when they sell at such a low price? Will they buy it? "think of Toyota's petrol-powered Corolla and other entry-level cars," said Stephanie Brinley, associate director of global mobile research at S & P. "there's nothing wrong with using a basic car as the first car, and it's expected to have fewer features."

Analysts believe that models like the Fisk PEAR, the acronym for the personal electric car revolution, will not compete with the big SUV like Ford's gasoline-powered explorer. On the contrary, the PEAR looks more like a scaled-down version of the Honda CRV or Toyota RAV4. Both cars were the best-selling SUV in the United States last year, according to Goodcarbadcar.net. Of these, the RAV4 sells for as little as $27500, longer than expected PEAR, while the larger CRV sells for slightly less than $30000.

Mr. Ives said Tesla's original low-cost car, commonly known as the Model 2, is expected to be a hatchback that is likely to be produced at the plant built in Monterrey, Mexico, and partly at Tesla's plant in Austin, Texas.

Mr Brinley said models similar to the next-generation Tesla and other cheap electric cars could include the Honda Civic or Toyota Corolla, which have basic retail prices of $25050 and $21550, respectively. According to the data, the two cars ranked 9th and 13th among all models sold in the United States, respectively, and ranked first among compact cars. Other similar models include Hyundai Kona and Honda fly.

Garrett Nelson, an analyst at CFRA Research, says the lowest-cost electric cars may have a range of only 400km per charge, similar to current cars such as the Nissan Leaf and Hyundai Kona, which sell for about $30,000, and consumers can save money by buying smaller, cheaper batteries.

Brinley said consumers are unlikely to accept lower prices and may insist that cheaper electric vehicles retain popular safety features such as lane departure warnings. Henryk Henrik Fisker, Fisk's chief executive, said on an earnings call on February 27 that consumers might accept shorter mileage in exchange for lower costs because they use the PEAR as a second car or in cities because they have time to recharge during short trips.

"if people just use electric cars as urban vehicles, they may not need to carry huge and expensive batteries with them," Fisk said. so we can offer different options in this area. "

Nielsen and Ives said that for market leader Tesla, the key to bringing costs down from $41990 in the Model 3 standard series was building or redesigning factories, significantly expanding their size and driving advances in battery technology. After years of decline, there is still room for a 30% to 50% drop in battery costs, Ives said.

Ford, the second-largest maker of electric vehicles in the US, expects simple economies of scale to increase operating margins by 20 percentage points by 2026. John Lawler, Ford's chief financial officer, said another 25 percentage points of profit margins would come from lower battery costs and the redesign of vehicles to use smaller batteries. To save money, Fisk outsourced the production of the PEAR to Foxconn.

How does Tesla plan to reduce costs? Tesla spent a lot of time explaining his future strategy on investors' Day on March 1. The company said the new strategy would reduce already low unit production costs by another 50 per cent. Although Musk has broken his promise many times, the company says it is a skill that has been successful once, when Tesla moved from the high-priced Model S and Model X models to the lineup now dominated by Model 3 and Model Y.

The key is to build larger factories and to allow the car's large, flat batteries to act as the design of the chassis at the same time. Lars Moravy, vice president of automotive engineering at Tesla, told Investor Daily that the moves allowed Tesla to assemble the car in a different order, skipping steps such as removing doors after painting, making it easier for workers to install seats and other internal components, thereby reducing downtime in the production process. He added that the cost of the company's new powertrain plant was 65 per cent lower than the one they replaced.

Tesla argues that its vertical integration will further reduce costs. In this integration, Tesla designed his own battery as well as most of the manufacturing equipment and software. Tesla said its overall efforts had reduced the cost of drive units, including motors, to $1000.

Munro&Associates, an engineering firm, supports this view. Colin Campbell, vice president of powertrain engineering, said: "We don't think any other carmaker can get close to that figure." The company says suppliers from other carmakers charge $2500 or more for similar systems. "this is definitely big news," said Cory Steuben, president of Munro&Associates.

While Tesla hopes the entry-level car will consolidate its position as a carmaker that can serve all market segments, carmakers have been reducing their presence at the lower end of the market for years. Instead, they prefer to focus on large cars with higher profit margins. In fact, a spokesman for Hyundai's US business said the company had no plans to launch low-end electric vehicles.

Hyundai said in a statement: "at present, it is very difficult to launch an electric car priced at $25000 without affecting the mileage." Hyundai expects the ICE and BEV models to eventually reach parity, but the timing is unclear.

Nielsen says these companies hope that the solution to the low-margin problem of low-end electric vehicles is to provide them with a variety of options, like mid-priced cars and trucks. In the case of Tesla, this could mean upgrading batteries and subscription services, or even letting drivers drive cars at home for automatic ride-sharing, he added. Or carmakers could simply try to sell leather seats, more powerful batteries and high-end stereos to buyers of smaller electric cars. With this strategy, Honda has prompted many Civic buyers to buy a sports version of Type R for more than $43000.

Brinley says automakers may just not want new cars to be as cheap as they are now promising. "Tesla has not reached such a price point," she said. "

The real answer depends on how much costs will fall and how hard Tesla will cut prices, as the resurgent supply chain and its own falling costs enable Tesla to offset some of the recent increases in car prices. "everyone is watching the development direction of Tesla, which will determine pricing and market competition," Ives said. "

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