(JW Insights) Apr 4 -- Zhu Jiangming, founder of Chinese electric car startup Leap Motor (零跑) predicted that the cost of making a new energy vehicle will be just RMB50,000 ($7,250) as technological iteration accelerates and the price of components tumbles, Yicai Global reported.

“Cars in the future will become ordinary products like televisions, and they will serve as merely a means of transport. It is possible that the cost to make them will settle at around RMB50,000($7,250) ,” according to Zhu, who is also chairman and CEO of the Hangzhou-based company, at the China EV 100 Forum held on April 2.

Just as the price of televisions, cell phones and air conditioners have fallen over the past 10 years, that of electric car batteries, smart components, interiors and chassis will also drop, said Zhu. “Smart NEVs are based on electric components and their mechanical structures are being replaced with electric ones, so they follow ‘Moore's Law’ as well.”

Batteries will halve in price over the next 10 years, Zhu said. A decade ago, the cost of a battery was RMB3,500 ($507) per kilowatt, and today it is between RMB600 ($87) and RMB700, Zhu said. It is entirely possible that the price will come down to RMB300 in the next 10 years.

If the price of batteries tumbles to RMB15,000 ($2,176) in the next decade, that of the armature may drop to RMB4,000 ($580), that of smart devices to RMB6,000 and that of the interior and chassis to RMB25,000, which brings the total cost to make a car to RMB50,000, Zhu said.

In the long run, EVs will be priced according to their cost price and there will be no brand premium, he said. Leap Motor, which has earned the name ‘Price Slasher,’ is already following this trend. In the ongoing price war in the country’s auto sector, Leap Motor has cut the price of some of its pure electric cars by over RMB50,000, and its Model T03 now costs close to RMB50,000.

Leap Motor’s net loss widened 79.5 percent in 2022 from the year before to RMB5.1 billion ($740.1 million), according to its annual report released last month. But revenue quadrupled to RMB12.4 billion ($1.8 billion). The carmaker delivered 111,100 electric autos last year, a two-and-a-half-fold gain from a year ago.

(Yuan XY)