Is Tesla responding to electric car consumer pressures?
It’s been known that price is a key factor in electric vehicle (EV) adoption, but what those of many automotive brands are yet to become reasonable for the everyday driver. The Chinese original equipment manufacturer (OEM) BYD is one of the best-performing companies in terms of price, and is on the path to forever challenge Elon Musk’s Tesla for market leadership.
If more individuals are to switch their vehicle to all-electric ones, then the amount they pay for this transition is a contributing factor. It’s unfortunate to say that environmental-consciousness alone cannot bring the world to make the transition happen faster. Of course, battery technology is by no means cheap, but there is something to be said for the recent news of returning ‘standard’ specification cars from Tesla to increase competition in the US.
As an example, the Model S Standard Range initial price is now US$10,000 less than the current Model S, making it slightly more appealing to prospective buyers—the caveat being that mileage is significantly less at a range of 298 to 320 miles (down from a minimum of 375 miles).
But the key focus for automakers is to get more EVs on the roads, and range is expected to be a null factor in a few years time once researchers can develop solid-state batteries with more energy density.
Is it an EV price war or a necessary step in electrification?
From an industry perspective, a price war is apparent, but realistically more lower priced EVs are required to produce a meaningful impact. The automotive sector has become very good at tailoring its cars to the premium market as more technology and smart functions are introduced, but the real challenge is bringing down the cost of cars.
The average price that consumers are expected to pay or loan for one of the top EVs in the US is around US$54,915 for low-end models. Likewise in the UK, £50,000 is a rough guide price for an electric car when you look at the trends in 2022.
As a result, BYD has taken a leap over the past 12 months as its overs cars that are significantly lower in price, and became the leading force in the market, but what will happen to the company’s position as its main rival cuts prices?
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