You didn’t buy an electric car. But you’re paying for one

Electric car in the city

Automakers want to keep prices high for new and used vehicles to help fund the move away from gasoline.

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An article originally posted on Bloomberg and subsequently syndicated to TBS News includes proof that auto makers are boosting ICE vehicle prices to subsidize the cost of manufacturing EVs.

“What automakers are now banking on is that high car prices will mean more profits, and they’re making production plans geared toward keeping prices high. For consumers, this might be the short-term cost of leaping into an electric future — but it also means inflation could stay elevated for longer than currently appreciated.

Investors heard this from themselves in the latest round of industry conference calls for fourth quarter earnings results. Tesla Chief Executive Officer Elon Musk said that the company’s not currently working on the $25,000 car that it had previously discussed, saying that it has too much on its plate. Given the cost environment and the shortage of key components such as semiconductors, there’s no reason for an automaker to go out of its way to make lower-priced, less-profitable vehicles right now.

Ford went into the most depth about its thinking as it balances production of gasoline-powered and electric vehicles. It gave expectations for its adjusted EBIT margin — earnings before interest and tax — of 8%, a higher level than the company projected last year. Its chief financial officer said that even though Ford projects sales volumes to be 10% to 15% higher than a year ago, it expects the pricing environment to remain strong, in part by operating “at leaner inventories than we have in the past.””

Read the full article at TBS News.

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