Eric Savitz on the costs of electric vehicles

As the electric-vehicle market grows, cracks are emerging in the sector’s business model.  Stellantis (STLA) CEO Carlos Tavares noted that it costs legacy car makers about 40% more, on average, to build an EV than a comparable gas-powered car.  He says auto makers are in the untenable position of either passing along those costs, resulting in high-price vehicles that won’t generate a mass market, or eating the additional outlays and hurting profitability.  He says that companies must find ways to absorb the extra costs while protecting margins and not pricing at levels unaffordable to the middle-class car buyer.  And they have to do that, he adds, while navigating through sharp swings in battery-related commodity prices.

~ Eric J. Savitz, "CES Returns With a Bang. The Optimism? Not So Much.," Barron's, January 7, 2022