(Yicai Global) April 3 -- Soon it will cost just CNY50,000 (USD7,250) to make a new energy vehicle as technological iteration accelerates and the price of components tumbles, the founder of Chinese electric car startup Leap Motor said.

“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 CNY50,000,” Zhu Jiangming, who is also chairman and chief executive officer of the Hangzhou-based company, said that the China EV 100 Forum yesterday.

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 CNY3,500 (USD507) per kilowatt, and today it is between CNY600 (USD87) and CNY700, Zhu said. It is entirely possible that the price will come down to CNY300 in the next 10 years.

If the price of batteries tumbles to CNY15,000 (USD2,176) in the next decade, that of the armature may drop to CNY4,000 (USD580), that of smart devices to CNY6,000 and that of the interior and chassis to CNY25,000, which brings the total cost to make a car to CNY50,000, 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 CNY50,000, and its Model T03 now costs close to CNY50,000.

Leap Motor’s net loss widened 79.5 percent in 2022 from the year before to CNY5.1 billion (USD740.1 million), according to its annual report released last month. But revenue quadrupled to CNY12.4 billion (USD1.8 billion). The carmaker delivered 111,100 electric autos last year, a two-and-a-half-fold gain from a year ago.

Editors: Tang Shihua, Kim Taylor