The Expert Podcast

• Will electric vehicle (EV) prices drop anytime soon? Probably yes, but it might not happen immediately.
• Ford’s CEO predicts EV prices will go down — but when and why?
• Why prices will drop:
  • The cost of building EVs is expected to fall significantly.
  • A price battle could emerge for EVs under $25,000, a price point hard to find even for gas-powered cars today.
• Material costs:
  • Vehicle materials, especially for batteries, could drop to around $18,000.
  • New battery chemistries will reduce the use of expensive and scarce materials like nickel and cobalt.
• Simpler manufacturing:
  • EVs have fewer moving parts — no internal combustion engine, transmission, or traditional brakes (thanks to regenerative braking).
  • Less time and labor needed on assembly lines.
  • The car itself has fewer fixtures, welds, and fasteners, simplifying production.
• Reducing distribution costs:
  • Dealers will likely keep smaller inventories, with fewer cars physically on lots.
  • Buyers will order customized vehicles and wait for delivery (currently 1-4 months).
• Cutting advertising expenses:
  • Expect reduced advertising spending since EV makers like Tesla rarely advertise traditionally.
• More aerodynamic designs:
  • Improved aerodynamics will reduce battery costs by increasing range efficiency.
• Changes in dealership models:
  • Traditional large dealerships with massive inventories may be replaced by smaller, boutique-style showrooms, similar to Tesla’s mall locations.
  • Buyers may order vehicles online and have them delivered directly.
• Legal challenges:
  • Existing franchise laws in all 50 states protect traditional dealership structures.
  • These laws may need to be revised to support new EV sales models.
• More, smaller dealerships:
  • Similar to Starbucks or Subway, expect more dealership locations with fewer cars and lower overhead costs.
  • This could reduce costs for manufacturers and dealers but may change the consumer experience.
• Retail evolution:
  • The car retailing model is one of the last large-scale retail industries still heavily reliant on face-to-face negotiation.
  • This model is poised for major disruption and modernization.
• Used car market:
  • Smaller dealerships might affect used car sales and inventory.
  • Used cars could become less valuable, similar to cell phones — used for a few years, then replaced.
• Open question:
  • How do you see the future of EV retailing?
  • What impact will these changes have on consumers and the economy?
  • Share your thoughts and experiences with car buying and dealership models.