The $25,000 electric vehicle is coming, with big implications for the auto market and car buyers
Sales of the sub-$30,000 Chevy Bolt, being assembled here in Orion Township, Michigan, allowed GM to recently pass Ford as a distant No. 2 behind Tesla in EVs.
Joe White | Reuters
From the headlines, car buyers might think the most important force driving down the cost of electric vehicles is the $7,500 tax credit that was expanded last summer, followed by Tesla’s recent aggressive cost-cutting to gain more market share.
Look closer, and the work auto companies are doing themselves to refine EV technology — and, crucially, new manufacturing processes — loom as an even bigger deal. And that’s resulting in a series of newly-announced and coming-soon models that will make EVs much cheaper, and more mainstream, highlighted by Tesla‘s first detailed public explanation of how its next-generation car due next year will come at a lower price tag, expected to start between $25,000 and $30,000.
The rise of the mass-market EV will be a milestone — environmentally, economically, financially and even politically. And as the Biden administration pushes changes that seek to aggressively remake the car market in favor of EVs more quickly than previously anticipated.
Hitting price points well below the $48,763 U.S. average new-vehicle price, which Kelley Blue Book says has risen 30% in the last three years, will make obsolete the shibboleth that EVs are an elite affectation of rich people. If the new models catch on, they will cement electric transportation as a mainstream consumer good, while also making Tesla, a refocused Ford and General Motors — and a still-to-be-winnowed out collection of EV startups — fully mainstream carmakers.
“For Tesla to go mass-market, they have to have a cheaper car,” said Wedbush analyst Dan Ives, who thinks Tesla’s version will be a compact luxury vehicle akin to an Audi A3 gas-powered car, whose base model starts at $35,400. “And mass market is the holy grail.”
Tesla’s lowest-priced model today is the Model 3 base MSRP of $41,990. There are currently three EV models with base MSRPs under $30,000, the Chevy Bolt, Bolt EUV, and Nissan Leaf, but average sales prices in March for both were still above $30,000, according to Edmunds, and above $34,000 in the case of the Leaf.
Lower-priced EVs are among a flood of new electric models that have begun to hit the market, with more than 60 new EVs expected in the next few years. Volkswagen on March 15 announced the sub-25,000 euro ID.2 model for the European market. Startup Fisker plans to launch the $29,900 PEAR crossover next year in the U.S., and GM is set to ship a sub-$30,000 Chevrolet Equinox electric sport-utility vehicle by fall. Most will compete in a market for compact sedans that could hit 10 million units over five years globally, even as automakers otherwise deemphasize smaller cars to focus on SUVs, Ives said.
All of these prices are before the tax breaks extended in last year’s Inflation Reduction Act, which let U.S. buyers take credits as large as $7,500 for most EVs made in North America, but are getting more complicated, with rules including eligibility based on where batteries are produced. There are also more financing options available in the auto loan market designed specifically for environmentally friendly cars.
The big questions for automakers in budget EVs
The rise of the budget EV raises a host of questions for car makers, including where they achieve the near-term cost savings needed from production lines, how fast they need to move to gain an edge over rivals entering the low end of the market, and whether the cost-saving techniques that EV-only companies Tesla and Fisker are claiming spread to more expensive vehicles, ultimately either lowering or containing their prices to consumers.
But the biggest question of all right now: what kind of EV will consumers be likely to find at these prices, and will they buy it?
“Think [Toyota’s gasoline-powered mainstay] Corolla and other entry-level vehicles,” said Stephanie Brinley, associate director of research at S&PGlobal Mobility. “There’s nothing wrong with having a basic car as a first car. It’s a reasonable expectation to have a lower feature point.”
Analysts don’t expect a vehicle like Fisker’s PEAR – an acronym for Personal Electric Automotive Revolution – to compete with a bigger SUV like Ford’s gas-powered Explorer. Instead, the PEAR may look more like a smaller version of Honda’s CRV or Toyota’s RAV4, the two best-selling SUVs in the U.S. last year, according to Goodcarbadcar.net. They sell for as low as $27,500 for the RAV4, which is four inches longer than the PEAR’s expected 177-inch length, and just under $30,000 for the larger CRV.
Tesla’s initial low-cost car, known colloquially as a Model 2, is expected to be a hatchback, most likely made at the company’s coming factory in Monterrey, Mexico, with some production possible at Tesla’s Austin, Texas facility, Ives said. Likely comparable models for the next-generation Tesla and other cheap EVs include the Honda Civic or Toyota’s Corolla, which retail for base prices of $25,050 and $21,550, respectively, according to Brinley. Their U.S. unit sales rank 9th and 13th among all models, and tops among compact sedans, according to Goodcarbadcar. Other similar cars include Hyundai’s Kona and Honda’s Fit.
The lowest-cost EVs may have as little as 250 miles of range between charges, similar to the existing $28,000 Nissan Leaf and cars like Hyundai’s Kona that sell in the mid-$30,000-range now, letting consumers save by going for a smaller, cheaper battery, CFRA Research analyst Garrett Nelson said.
Brinley says consumers are unlikely to accept less than that, and will likely insist that even less-pricey EVs keep popular safety features like lane-departure warnings. Consumers may accept a shorter range in exchange for lower cost because they use a PEAR as a second car or use it in cities, where short trips with time to recharge in between are common, Fisker CEO Henrik Fisker said on the company’s Feb. 27 earnings call.
“They may not need to carry around a giant expensive battery, if they’re only using [it] as a city car,” Fisker said. “So we’ll offer some different variations there.”
For market leader Tesla, the key to pulling costs down from the $41,990 list price of the Model 3 standard range begins with new or reimagined factories, vastly greater scale and advances in battery technology, Nelson and Ives said. Ives said battery costs have another 30 to 50 percent to fall after years of decline.
At the No. 2 U.S. EV maker, Ford expects simple scale economies to improve EVs’ operating profit margins by 20 percentage points by 2026, according to a presentation to analysts on the company webcast on March 23. Another 25 points of margin will come from falling battery costs, and from redesigning vehicles so they can use smaller batteries, said Ford CFO John Lawler. Fisker has moved to save by outsourcing production of the PEAR to Foxconn.
How Tesla plans to lower costs
Tesla devoted the biggest chunk of its March 1 investor day to explaining its next-generation strategy, which it said will drive down unit production costs that are already low by another 50%. While Elon Musk has been dogged by a history of over-promising and under-delivering — at least by the original deadline — this is a trick the company says it has already accomplished once, when moving from the premium-priced Model S and Model X vehicles to a lineup dominated now by the Model 3 and Model Y.
The keys include new, bigger factories and a design that makes vehicles’ large, flat battery do double duty as the floor of the car. Those moves let Tesla assemble cars in a different order, skipping steps like removing doors after painting to let workers install seats and other interior components, resulting in less downtime during production, Lars Moravy, Tesla’s vice president of vehicle engineering, said at the investor day. The company’s new power train factories have 65% lower costs than what they replace, he added.
Tesla argues that its vertical integration, in which it designs its own batteries and much of its manufacturing equipment and software, will drive costs down further. Tesla said its overall efforts have driven the cost of drive units, which include the car’s electric motor, as low as $1,000.
“We don’t think any other automaker is even close to that number,” vice president of drivetrain engineering Colin Campbell said, a contention backed by engineering firm Munro & Associates, which says suppliers to other automakers charge $2,500 or more for similar systems.
“That’s big news,” Cory Steuben, Munro president, said.
While Tesla hopes the entry-level car will cement its role as a carmaker that can serve all segments of the market, automakers have spent years reducing their footprint in the less-profitable low end of the market, preferring to concentrate on larger vehicles with wider profit margins. Indeed, a spokesman for Hyundai’s U.S. operation said in an e-mail that the company has no plans to introduce a lower-end EV. No low-end Fords have been announced either. GM will add the Equinox to its existing Bolt sedan, which starts at $26,500 – itself down almost $6,000 for the 2023 model year. A majority of the EV sales that allowed GM to surpass Ford as No. 2 behind Tesla, though still far behind, have been the Bolt.
“At this moment a $25,000 [battery electric vehicle] is difficult without compromising driving range,” Hyundai said in the statement. “Eventually, Hyundai expects ICE and BEV models to reach price parity, but the exact timing is still unclear.”
The solution to low profits in lower-end electric cars, the companies hope, will be to load them with options, just as mid-priced cars and trucks do, Nelson said. In Tesla’s case, this might mean battery upgrades and subscriptions to services, or even a version that lets drivers deploy the vehicle for autonomous rideshare driving while the owner stays home, Nelson added. Or automakers can simply try to sell buyers of smaller EVs on leather seats, more powerful batteries and premium stereos, counting on the same forces that make some Civic buyers pay $43,000-plus for the sportier Type R version or push some Model 3s as high as $79,000.
Or the automakers might simply not make the new vehicles as inexpensive as they are promising now, Brinley said.
“Tesla hasn’t hit a price point yet,” she said.
The real answer depends on exactly how far costs come down, and how aggressively Tesla lowers prices, if at all, as healing supply chains and its own falling costs empower it to squeeze some of the recent inflation in car prices out of the market.
“Everybody is watching to see where Tesla heads,” Ives said. “That’s going to dictate pricing and competition in the market.”
From the ashes of Elon Musk’s decision to fire the whole Supercharger team last year, a new company has risen: Hubber, which will take its founders’ expertise at setting up Tesla Superchargers and apply that to addressing the lack of high-speed urban charging for taxis and other commercial vehicles.
Last year, Tesla CEO Elon Musk suddenly fired the entire charging department, in what is one of the more chaotic decisions he’s made yet.
In the immediate aftermath of this decision, a lot of questions were asked around the industry – and a lot of companies started snatching up talent from the best EV charging team in the world.
Or, alternately, some of that talent went to form their own companies. That’s the case for Harry Fox, Connor Selwood and Hugh Leckie, who met at Tesla and together oversaw the rollout of 100 Supercharger sites with 1,200 total chargers across the UK & Ireland. And after the shakeup of the Supercharger team, they set off to charge a new path of their own.
The three formed Hubber, which pitches itself as a new type of EV charging company, focused on solving “the urban charging gap.”
Hubber describes itself as “the UK’s leading specialist in urban high-powered EV charging, addressing one of the most urgent constraints in the energy transition: the shortage of fast, reliable charging in major cities.” It “acquires and develops prime urban sites into large-scale charging hubs, combining deep grid-connection know-how with a proven ability to deliver complex infrastructure at speed”.
A large amount of the traffic in UK cities is taken up by taxis and last-mile, and these vehicles tend to see higher utilization than commuter cars, so they need to charge more often. Hubber says that taxis charge five times as often as a private vehicle, which means they’ll need more access to fast EV charging.
This is further exacerbated in urban environments, where EVs might not park in a place they can charge. Lots of urban homes don’t have garages, and while there are street EV chargers available in London, they’re not everywhere yet. So convenient fast charging is essential.
And the needs for commercial drivers are different than those of other commuters. While nicely-appointed charging plazas (like Rove’s “full service” EV charger in Santa Ana, CA) are great for the average consumer, commercial EV drivers put more of a premium on speed and affordability, and don’t mind if a site is a little further off of a main thoroughfare, or not as close to food or shopping as other drivers might want.
So Hubber is looking at sites that other developers might pass over – like old warehouses or gas stations – and figuring out how to turn them into an ideal site for high-throughput charging.
With its cofounders’ experience at Tesla, Hubber will buy sites, transform them into a charger-ready location, and essentially provide the dream location that they would have liked to see during the site selection processes they went through in their previous jobs.
The charging hubs could still have some amenities, like restrooms and vending machines, of the type that would be useful for taxi or ride-hailing drivers to grab during a quick stop. But the main focus would be on getting people in and out and back on the road.
Here’s a rendering of what a potential site might look like. In this sample location, there would be room for light-duty vehicles up front, with an area for larger last-mile delivery vehicles with larger charging bays. A small covered area could provide restrooms and vending, and another portion of the site could be dedicated to transformers, batteries and the like.
Hubber is also thinking ahead to a possible autonomous future, where driverless ride-hailing vehicles like those from Waymo could have a place to charge. Although given that there aren’t currently great solutions for autonomous charging, an attendant might have to be involved for the foreseeable future.
The company would also like to expand beyond the UK and Ireland, but they’re sticking to home base for the time being. After all, things are just getting off the ground – but the £60 million (~$81m) investment that Hubber just secured is certainly a big boost towards getting the project moving.
Speaking of projects, Hubber’s first facility is opening this coming week, on August 20th. The site is at Forest Hill in South London, near Forest Hill Station. It will have 12 EV charging bays, with 3 150kW and 3 300kW dual-head chargers. The site will be operated by RAW charging, which will offer free fast charging for its first week of operation.
Electrek’s Take
As we said at the time, firing the whole Supercharger team was a dumb decision. It was immediately obvious to everyone in the industry that it was a dumb decision, and Tesla did eventually relent and rehire some of the fired workers, but the damage was done – and not just for the charging team, but morale was made low throughout the organization.
The silver lining, at least for the rest of the industry, is that it allowed this talent to be distributed around to other companies. This isn’t beneficial for Tesla and did cause chaos which has likely affected the rollout of NACS, slowed EV charging site development in the US, and so on, but it has been beneficial for other companies who managed to snatch up talent.
Or, for companies like Hubber, which were formed by that talent.
It’s an interesting idea, and I like the angle of focusing on taxis in order to increase utilization of the site. EV charging is potentially an interesting business long term, but currently a lot of chargers see low usage because it’s so easy for most of the people who own EVs to charge at home.
But we’re going to have to move beyond the market of people who can easily charge in a garage attached to a single family home, especially in cities. Getting an easy way for the cars that get used the most in a city to charge is a really important move, and we’re looking forward to seeing how Hubber can help with this. And having a leadership team consisting of people who formerly worked at the best charging team in the industry isn’t a bad start.
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Indian ag and automaker Mahindra has launched a limited-run Batman Edition of its BE 6 Electric Origin SUV, calling it, “a production car that brings to life a rare fusion of cinematic heritage and modern luxury, inspired by Christopher Nolan’s critically acclaimed The Dark Knight Trilogy from Warner Bros. Pictures.”
And, you guys – the new Mahindra BE 6 is. So. Serious.
Someone at Mahindra is very taken with American culture it seems. After launching the Willys MB Jeep-inspired Mahindra Roxor a few years ago, the company followed it up by building a credible line of EVs co-developed with VW. Now, they’re building a limited edition of one of those EVs inspired by another American cultural icon.
“Batman is more than a pop-culture icon — he represents innovation, resilience, and an unyielding drive to push boundaries,” says Vikram Sharma, Senior Vice President, Warner Bros. Discovery Global Consumer Products, APAC. “This collaboration brings that spirit to the road in a bold, electric way. With this limited-edition range, fans in India can now experience the thrill of Batman every time they drive. It’s a collector’s statement on wheels.”
To separate the Batman Edition from the other Mahindra SUVs, its makers have festooned their EV with Dark Knight logos and branding, inside and out.
Batman Edition features
Exterior
- Custom Satin Black Colour premieres on the Batman Edition
- Custom Batman Decal on front doors
- R20 alloy wheels for an aggressive, athletic stance
- Alchemy Gold-painted suspension and brake callipers a bold, premium contrast to the Satin black body
- “BE 6 × The Dark Knight”, limited edition, rear badging
- The Bat emblem, as seen in The Dark Knight Trilogy, uniquely placed on:
- Hub caps
- Front quarter panels
- Rear bumper
- Windows & Rear Windshield
- Infinity Roof featuring The Dark Knight Trilogy Bat emblem
- Night Trail – Carpet lamps with The Dark Knight Trilogy Bat emblem logo projection
- ‘Batman Edition’ signature sticker on rear door cladding
Interior
- Brushed Alchemy Gold Batman Edition plaque on the dashboard with numbering
- Charcoal leather instrument panel (IP) with brushed gold halo around driver cockpit
- Suede and leather upholstery with gold sepia accent stitching and integrated The Dark Knight Trilogy Bat emblem for a rich, tactile experience
- Gold-accented steering wheel, In-Touch Controller, Electronic Parking Brake, custom key fob with Alchemy gold detailing
- The Dark Knight Trilogy Bat emblem embossed on:
- The “Boost” button
- Seats
- Interior labels
- Pinstripe graphic and The Dark Knight Trilogy Bat Emblem across the passenger dashboard panel
- Race car inspired open straps with Batman Edition Branding Batman Edition welcome animation on the infotainment display
- Custom Batman inspired exterior engine sounds
Despite all the Batman branding, the end result is almost tasteful. I could do without the custom Batman decal on the front quarter panels, but the rest of the mods are far less offensive. I even like the little “Bat Signal” puddle lights on the wing mirrors.
Mahindra Batman BE 6
As a car, the special edition Batman Mahindra is based on the top-shelf version of the BE 6, fitted with a 79 kWh battery good for 550 km (about 340 miles) of range according to its WLTP rating. That battery sends power to a rear-mounted 282 hp (210 kW / 286 PS) electric motor generating and 380 Nm (about 280 lb-ft) of torque that sends power to the rear wheels.
The BE6 also features a modern Level 2 ADAS tech and screens everywhere, including in the steering wheel hub – which seems like it might get particularly nasty in an airbag deployment (but no one asked me).
Pricing starts at ₹27.79 lakh (a little under $27,500, as I type this), and production will be limited to just 300 units. Order books are set to open 23AUG.
SOURCE | IMAGES: Mahindra.
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Electric bike and scooter safety is now part of the curriculum in some schools – and surprisingly, it’s happening in Florida.
Yes, Florida. The state that’s better known for keeping education out of schools, banning everything from books to the word “gay.” But now, a Central Florida nonprofit is stepping in to make sure students are at least learning how to ride responsibly.
The group Best Foot Forward for Pedestrian Safety has partnered with local police departments and Orange County Public Schools to bring e-bike and e-scooter safety programs directly into middle schools and high schools. The initiative is focused on addressing the growing number of crashes and injuries involving students riding electric two-wheelers.
The safety course covers basics like wearing helmets, obeying traffic laws, and making yourself visible to drivers — skills that are important for the many young riders who are increasingly taking to electric bikes as a form of independent transportation around their cities and neighborhoods. One of the main topics of the program is said to be speed management. The program addresses the importance of keeping speeds reasonable and the impacts of faster riding.
Like much of the US, Florida has seen a surge in e-bike and e-scooter popularity among kids and teens, especially in suburban and coastal areas. While many embrace them as a fun and fast way to get around, the sudden rise has also come with a worrying spike in injuries and deaths, prompting calls for improvements in both infrastructure and education.
With e-bike usage exploding across the US, more schools and communities are exploring steps to increase rider education. It’s a sign that America’s transportation habits are changing – and our education systems are beginning to catch up.
Electrek’s Take
I think programs like this are great because they teach kids things that they’d otherwise have to learn through trial and error. We don’t just hand cars to sixteen-year-olds and say, “figure it out.” So it follows that some form of organized rider education would be important as more youths take to e-bikes than ever before.
In cycling-intensive cities in Europe, all schools teach kids to ride bikes, often giving the kids some form of cute little cycling diploma to demonstrate that they’ve passed the course and can safely ride a bike.
But at the same time, this makes me wonder if we’re still missing the point. Responding to an increase in e-bike rider deaths with lessons about bicycle speed management is a bit like responding to mass shootings by lecturing innocent passersby about why they shouldn’t run into bullets.
Educating riders is always great and I’ll always support it. But in parallel, perhaps we should also be addressing the root cause of all of these tragics deaths. At the end of the day, most electric bike-related deaths aren’t a result of an e-bike rider doing too much fast riding; they’re a result of a car driver doing too much running over a cyclist.
via: Fox13
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