Ford sees price parity by 2026.
GM predicts affordability sometime around 2030, or later.
Despite optimistic predictions from top industry executives, the affordability of electric vehicles (EVs) for the average North American consumer may remain elusive in the near future. Both Jim Farley, CEO of Ford, and Mary Barra, CEO of General Motors (GM), anticipate significant developments in the EV market in the latter half of this decade. However, the wider implications of these predictions paint a concerning picture for prospective car buyers looking to jump into a new EV.
According to Farley, price parity between electric vehicles and their internal combustion engine (ICE) counterparts should be achieved by 2026. This prediction, shared in an interview with Fox News, suggests that the cost of producing and buying an EV will equal the cost of a traditional ICE vehicle within the next three years. This is indeed a milestone, reflective of the ongoing advancements in EV technology and economies of scale.
However, Barra, in her recent statement reported by Yahoo Finance, tempered the market’s hopes by estimating that profitable mass-market EVs, in the $30,000 to $40,000 range, may only come to fruition “sometime in the latter part of this decade … maybe a little longer.” This implies that despite achieving price parity with ICEs, the majority of EVs will remain priced significantly above the average car buyer’s budget.
The current average price for new vehicles stands at over $40,000, a figure that continues to see a steady increase. Thus, the prospect of price parity could imply that by 2026, both EVs and ICE vehicles might be financially inaccessible for most North Americans.
This presents a paradox for the industry and policymakers alike. While the auto industry is moving towards a more sustainable, eco-friendly future with EVs, the costs associated with these advances could exclude a large number of consumers from participating in this revolution.
The industry will need to find ways to make EVs more affordable, including improving battery technology, boosting manufacturing efficiency, and perhaps most importantly, continued lobbying for supportive government policies and incentives. We must remember that EV incentives won’t last forever and are only in place to promote interest in these vehicles. Without these changes, the dream of an affordable, green, and energy-efficient vehicle might remain just that – a dream, for the majority of North Americans for years to come.
While the industry’s EV revolution is well underway, this imminent milestone of price parity serves as a stark reminder that there are still significant challenges to be addressed in making electric vehicles a realistic option for the average consumer.