this post was submitted on 05 Mar 2025
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I obviously don't understand the economics of it and I realize that China will always have the upper hand on price but is there a reason every western EV has to be $40,000+? Like surely it's possible to build a barebones model for less than 30k right - especially if I don't need or even want touch screens or fancy interior materials or heated seats or anything.
If I specifically don’t want touch screens, what then?
Legally, cars sold in the US have to have a backup cam, so there has to be a screen, so it might as well be a touch screen.
I agree this is dumb and that's why I drive an old car with nothing but bluetooth
Me too! What is the cost/benefit FOR ME? I understand what it is for the manufacturers but it's a UX nightmare, especially when you're trying to drive too.
Higher profit margins.
Europeans get the bulk of cheaper and smaller EVs. Meanwhile in North America, Ford stopped selling sedans. It’s a niche that car makers could fill if they wanted to.
Western culture is built on delivering value to shareholders first and foremost.
That's why I snatched up a Bolt before Chevy (temporarily, they say) discontinued the line. I even did upgrade it a little to get heated/cooling front seats and a heated steering wheel plus the extra safety features. $32.5k with a $7.5k rebate from the federal Clean Vehicle Credit. So $25k for a car with a 175-280 mile range. (175ish in winter when the battery is less efficient, 280 in summer).
Of course the IRS fucked up the point of sale rebate when I was purchasing, but it's finally incoming with my taxes this year.
I imagine China is subsidizing the R&D of their EVs while American car companies are trying to recoup those costs
Every major country subsidizes R&D. That's what federal research grants are all about. The NSF, NIH, etc do exactly that.
Other US subsidies on EVs aren't specifically restricted to R&D but US companies could apply it to that, if they want.
edit: typo
also many US companies are pocketing those subsidy money to pay the CEOs anyways.
China has been subsidizing EVs since 2010.
Longer than that. China has been promoting battery technology as a strategic initiative since the 90's.
Definitely related. EVs are relatively new technology and internal knowledge for engineering R&D, materials, and manufacturing infrastructure all have to be spun up. All this, and you need marketing/planning folks to decide on what sort of vehicle will sell the best against their engineering capabilities.
It's a combination of issues. In no particular order;
Labor costs don't seem to be a factor at all. EVs are made in modern factories that are almost completely automated. The biggest part of "precursor availability" is likely batteries. The main innovation in EVs was the batteries. The electric motors, chassis, computers, etc are all secondary to batteries that can safely hold a lot of charge and discharge reliably. China dominates that market too.
How about the rare earth materials as well as much more expensive metals in the motor and electronics construction? An ICE engine is well understood and you can pick up a higher performing aluminum block and head crate motor for ~$13k or so. The higher trim Tesla motors are ~$20k, and they can have up to four motors. That’s a huge difference.
E: y’all downvoting…why? OEM electric motors for cars like a Tesla are expensive AF whereas you can get a relatively inexpensive ICE (~$7k for a base model V8 crate motor). That’s retail, not the manufacturer internal price.
China has more rare earth deposits than the US but that's a bit misleading. Rare earths show up in trace amounts all over the world. China has them in higher concentrations.
The bigger issue is that China has been the main refiner of rare earths for decades. That means they have all the infrastructure for actually making it available and they've developed a bunch of technologies and processes to do it way cheaper and more efficiently than anyone else can.
I don't know the pricing specifics of EV motors but I have some familiarity with electric motors, in general. The technology hasn't really changed much in a long time. We've have 3 phase motors and hall effect sensors for ages. They're better than older electric motors but the huge technology leap, that made EVs practical, was the batteries.
No way does an electric motor cost that much.
Have you seen the amount of precision engineering that goes into building a combustion engine? That is ridiculously expensive.
Did you check numbers before you posted or did you disagree out of hand with zero thought to it? I didn’t pull these numbers out of my ass.
https://gbtimes.com/how-much-is-a-tesla-motor-replacement/
$10k-$30k, I posted a midrange price. Another site had them as “cheap” as 7k, but either way if you need 2-4 of them it’s not cheap.
That precision engineering has been establishing itself for well over a century, we get the cheaper price thanks to the economy of numbers. piston engines were driven by steam well before ICE. Yes, I am abundantly familiar with ICE engines having built several and in fact have one under assembly in my garage right now. There’s a massive difference between a boring consumer grade crate motor and any purpose-built high-end track motor as far as engineering goes even if the parts are essentially the same.
You seem to be comparing a crate motor with the full cost of replacement of the Tesla motor. Also, is that the motor, or the whole drive unit, which from my understanding includes the differential?
No idea. I equated motor to motor. I assumed that when the price was stated for the electric motor it was for the motor alone, it did not specify motor, transmission unit, controller or management systems.
If you want to compare setups that contain engine and transmission it’s still cheaper on the ICE side. An engine and transmission kit, plus engine controller, can be had for around $15k starting price.
But again, we have to note that only one engine and transmission are required in an ICE car, whereas tesla may require up to four motors. I am also picking modest V8 engines and associated transmissions. You could also pick a 4 cyl Honda engine and transmission for a little over half the cost of the V8 package. A new Honda 1.5l 4 cyl can be had for $2500. Also, again, I am pointing out retail costs. OEM costs will be significantly cheaper.
So yeah…electric motors, installed with or without any transmission parts, are more costly.
Edit: prices for tesla motors did not state it included drive unit, but I am suspicious of the source. I would conservatively place a new OEM motor at 10k retail, single unit, base model.
Touch screens are actually cheaper than physical buttons as it’s the reason why so many electric cars have them. Most of the cost comes from the batteries so they try to save in other areas.
We should see more physical buttons back in newer electric cars as the batteries get cheaper to mass produce.
No kidding, I didn't know that. I did some checking and it says replacement batteries are $5-15k! Well silver lining is the price is dropping precipitously:
Jan 26, 2024 - According to the DOE, the cost of a lithium-ion EV battery was 89 percent lower in 2022 than it was in 2008
Replacement batteries are really not a concern with EVs. They last longer than most folks expect and they come with pretty lengthy warranties.
It's still ridiculous how expensive they are to repair or replace, and for sure that will hit some folks hard, but it really should be quite rare to replace an EV's battery
touch screens are a lot cheaper than buttons because you only need the one. and if one trim level of a car has heated seats, they all do because it's a lot cheaper to only produce one kind of seat.
car economics are weird.
Rear cameras are required, which means some sort of screen is required. Might as well make it a touch screen so you can cut costs on wiring and installing buttons if you already need one.
My guess is that none of them are at scale to the point where the margins are great. To make the margins acceptable price had to go up.
Nothing is really profitable in auto until the whole production line is operating at full scale.
Yeah that makes sense, I bet you're right or at least that's a large part of it.
Reminds me of this video I saw about economies of scale specifically regarding a special part that went into a guitar. The maker could get the material and produce that part pretty cheaply until the automotive industry stopped using that same material. Suddenly they could barely source the material anymore and just had to cancel the part.
That's crazy but makes sense. Basically benefiting from autos overflow.
deleted as others said the exact same thing below.
Yes it costs more to live in those societies because people are paid more.