Electric vehicles are dropping in price left and right—but there's only so much they can drop before automakers start losing a ton of money. (In some cases, even more than they are now.) Car companies are now focusing on building more affordable EVs, especially as pressure mounts from China's cheap EVs going on sale in other countries. Now, we know a little more about Ford's secret weapon in that fight.
Welcome to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about Ford's new crack team of people who are going to make their affordable EV happen, China's pushback on the EU's new EV tariffs, and Audi's $1 billion investment into EV projects in Mexico. Let's jump in.
30%: Ford Is Assembling An A-Team Of Ex-Apple, Tesla, and Rivian Employees To Build Cheap EVs
Ford is hard to figure out right now. On one hand, it's scaling back future EV plans and even retreating from a tough-love program for dealers who want to sell electric cars. On the other hand, a "skunkworks" effort is underway in California—not Dearborn, Michigan—to make an affordable new EV platform.
To do this, Ford is taking advantage of industry-wide changes that have allowed the Blue Oval to take on around 300 new employees from various industry leaders.
TechCrunch reports this works out to about 50 employees from Rivian, 20 from Tesla, a dozen from Canoo, 10 from Lucid, a number from Apple's recently disbanded Project Titan EV program, and roughly 100 employees from a recently acquired startup called Auto Motive Power. The automaker has also tapped into Formula 1 by hiring senior aerodynamicists specifically for the low-cost EV project.
The idea is simple: this crack team of seasoned professionals to ensure that its affordable EV is, well, affordable.
Almost the entire auto industry has this same focus right now. With cooling demand and increased pressure from cheap Chinese EVs on the horizon, many automakers are shielded only by new protectionist tariffs which inflate the consumer-facing cost of the cheapest electric cars on the market. That means not just lowering the cost of domestically produced EVs, but also making them more competitive by offering impressive specs to boot.
"All of our EV teams are ruthlessly focused on cost and efficiency in our EV products," said Ford CEO Jim Farley during Ford's Q4 earnings call earlier this year, "Because the ultimate competition is going to be the affordable Tesla and the Chinese [automakers.]"
The team is led by Alan Clarke, the former head of vehicle engineering of the Tesla Model 3 prototype, who has been working with Ford since 2022. In 2024, Ford also brought on a design engineer from Tesla's gigacasting team, snapped up a number of employees during Rivian's 10% company-wide layoff, and an engineering VP from Canoo.
TechCrunch says Ford has also heavily expanded its presence in Palo Alto, one of Silicon Valley's principal cities. Its walls are now peppered with top tech talent from Nuro (an autonomous delivery vehicle developer founded by two Waymo veterans), Lucid, Joby (an eVTOL startup), and Apple.
Ford seems pretty well equipped with teams of experts needed to get the job done. If everything goes according to plan, Ford could knock it out of the park with a cheap blue-collar EV so desperately needed for mass adoption stateside.
60%: China Slams Europe's 38.1%: EV Tariffs as "Wrong" And Urges A Reversal
Speaking of cheap EVs, China is pretty heated over protectionist tariffs which are beginning to impede plans to offer uber-cheap electrified vehicles all over the globe. Reuters reports that Chinese state media has now fired back with opposing words on the tariffs urging the EU to reconsider.
The European Union recently joined the U.S. in agreeing to impose increased import duties on Chinese electric vehicles. While not as drastic as U.S. tariffs, the EU will still impose fees of up to 38.1% on eligible imports to defend against "unfair subsidization."
Low-cost EVs aren't the issue, according to both the EU and U.S., but intentionally producing them over-capacity and flooding foreign markets is. China rejected the notion that its industry is churning out cars at a rate that threatens automakers from either bloc and says the new tariffs could threaten EV adoption and climate goals.
"We urge the EU to listen carefully to the objective and rational voices from all walks of life, immediately correct its wrong practices, stop politicizing economic and trade issues, and properly handle economic and trade frictions through dialogue and consultation," said Lin Jiang, a Chinese foreign ministry spokesperson, at a press briefing.
As part of an ongoing investigation into these subsidies, the European Commission claims that low-cost Chinese EVs were possible due to massive government-provided financial assistance. The Commission believes that China is able to offer low-cost EVs like the BYD Seagull for under $21,500 because of these subsidies and that it poses a direct threat to the European auto industry—Volkswagen, Mercedes-Benz, BMW, and others.
Not all Chinese automakers will be affected the same. The firms that cooperated with the EU's investigation into subsidies will reportedly face lower tariffs (an average of 21% versus the high of 38.1%) than those that resisted cooperation.
Now, none of the proposed numbers are finalized. The Commission plans to wrap up its investigation in November, which is when more concrete duty fees will be settled on. That leaves some time for negotiations between the EU and China. Meanwhile, the U.S. plans to impose planned 100% import tariffs on EVs, plus various increases on tariffs related to EV components (like EV batteries, battery parts, permanent magnets, and semiconductors), in August.
90%: Audi To Invest $1 Billion In Mexico-Based EV Projects
Audi isn't going to be left out on all of the EV development fun. Volkswagen's luxury arm announced this week that it will invest more than $1 billion into EV projects centered in the Mexican state of Puebla.
Now, Audi already has a factory in San Jose Chiapa (located in the state of Puebla) that it built in 2016. The location currently produces the Q5, including both the sports and plug-in hybrid versions of the SUV. Audi says that it has already begun outfitting the factory with the equipment and infrastructure necessary to build fully electric cars, meaning that its billion-dollar investment is already underway.
Audi says the plant currently employs 5,351 workers and produced more than 175,000 vehicles last year. The Puebla government says that the automaker plans to add around 500 new jobs, or an increase in workforce by just over 9%.
Both Audi and the governor of Puebla, Sergio Salomon, say that the underlying goal is to turn Puebla into a hub for electromobility, kicking it off with Audi's large investment.
It's not clear which vehicles Audi plans to build at this location just yet, however, the location means that it could be eligible for the Federal EV tax credit due to its final assembly location, a win for Audi and the number of growing EV buyers who are taking advantage of the $7,500 subsidy.
100%: What's The Sweet Spot For Mass-Market EV Pricing?
With all of this hubbub floating around about cheap EVs, nobody really defines what "cheap" is. Tesla first quoted $35,000 for the Model 3, now it's (maybe?) aiming at a $25,000 car. Meanwhile, BYD has a $21,500 car planned to drop in Europe (assuming tariffs don't disrupt the price of plans), and BYD even offers a $9,700 version of the Seagull in its domestic market.
Since inflation has risen sharply in the past four years, a "cheap" $35,000 car in 2020 would now cost 21% more, or around $42,475, in 2024.
That being said, what would you consider to be the ideal starting price of a new EV in the U.S. to drive mass-market adoption? Let me know in the comments.
