Electric cars don't make a profit for most brands: Skoda sales boss
Skoda head of sales and marketing states high battery costs and slow price reductions threaten EV profitability despite demand
There are “very few” manufacturers currently making money on electric cars, with efforts to improve profitability key to establishing the technology for the long-term, according to Skoda’s head of sales and marketing Martin Jahn.
Referring to it being “only natural” to bring prices for the brand’s new Elroq small SUV broadly in line with the petrol Karoq, Jahn said customer expectations are that prices will start to align.
“As CO2 limits are going down, we need to increase the number of electric cars sold, so it’s only natural that we are trying to decrease the price,” he stated. “Unfortunately, the costs are not decreasing as fast, so it is affecting the profitability of electric cars. Profitability of electric cars is a challenge for everybody; there are very few brands who make money with electric cars.”
He added that efforts are being made to reduce costs across the whole company, but the battery is still the dominant issue. “If you've got to bring the price down to make people buy them, we have to look at all costs – the company, the management costs at all levels. We have to implement more artificial intelligence in our processes, reduce the number of people in general, but the cost of electric cars is mostly about [the] battery.
“If more than 50% of our cars are electric, and we still have this low profitability, then it will become unsustainable. So how do you make them more profitable?” he continued.
“The battery is what drives the cost of the electric car, so we have to work on the battery costs. We cannot and we do not want to sacrifice quality for the customer.”
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