Automakers across America have invested millions of dollars into their electric vehicle strategies in recent years. This includes new product development, engineering to create lighter, more powerful motors, and investment in new factories. However, it appears that this cost may not be paying off as electric vehicle (EV) makers across America reportedly lose thousands on every car they sell.
Losses on Every EV Sold
According to a new report from analyst firm Boston Consulting Group (BCG), U.S. automakers lose roughly $6,000 on every $50,000 EV they sell in America. This figure follows similar reports of high losses from companies like Rivian and Lucid. Earlier this year, Rivian revealed that it lost $33,000 on every truck sold, while Lucid reported losses of $400,000 on each car sold.
The report from BCG warned that these losses are likely to continue well into the next generation of supposedly cheaper, more efficient electric cars. The report suggests that automakers will only be able to close half of this cost gap by making the right technology choices and economies of scale as they ramp up production. However, these measures won’t make up the difference. The impact of looming Chinese imports is also a factor to consider as market prices will likely contract further, exacerbating the profitability challenge.
Automakers Strategic Changes
This insight into the electric car market across America could explain why a company such as Ford is reportedly changing its strategy and switching from big, expensive EVs to smaller, cheaper models. This could help them start building the kinds of electric cars that American drivers want, which was another area the BCG report investigated.
According to the report, there’s currently only one car on sale in the U.S. that meets the demand for the next wave of EV adopters. These 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 is the Hyundai Ioniq 6 RWD Long Range. 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.
