When it comes to the making of cars, you’ll agree with me that the arrangement, type, and quality of the components will depend on many factors. For instance, how the vehicle is going to be utilized is one of the factors that’ll affect the choice of materials and components for the car.
Furthermore, for automobile manufacturers to see a single car building project to completion, they often put in a lot of time, effort, money, and resources. All of these factors in addition to the quality of components used will determine the selling price of the car. That said, here’s a burning question, how much does it cost to make a single car?
In general, building a cheap car from scratch will cost between $15,000 to $20,000. When building a nicer car, one can expect to spend about $40,000 to $60,000. How much it costs to build a single car depends on several different factors, such as the quality and type of raw materials and features.
In the rest of this post, I’ll further discuss everything you need to know about the cost of making a car, including the cost of raw materials and how much profit automobile manufacturers make after producing a car. So, without wasting time, let’s get straight down to business.
How Much Do Raw Materials Cost to Build a Car?
I’m sure you know that automobile manufacturers make use of several different raw materials to build cars. However, in case you have no idea about it, some of the raw materials often utilized by automobile makers are rubber, glass, steel, plastics, and aluminum. Furthermore, most automobile makers use petroleum products to make synthetic materials, such as plastics, which are essential for manufacturing cars.
That said, here’s a burning question; how much do raw materials exactly cost to manufacture a car? To answer the burning question, I’ll say it depends on the type and percentage of raw materials utilized during the manufacturing process.
When it comes to the production of automobiles, raw materials are the biggest cost drivers. They, together with auto parts, contribute about 57 percent of the total cost of producing a car.
As earlier mentioned, automobile manufacturers use several different raw materials when trying to produce a car. Let’s have a quick look at some of the components below:
One of the raw materials used in car production is steel – it’s perhaps the most commonly used input during the manufacturing process. Furthermore, steel makes up about 40 percent of the raw materials used by automobile makers. It’s used to construct the chassis and body of a vehicle. That’s not all; steel is also utilized to construct the door panels as well as the roofing of the car.
Aluminum contributes about 10% of the entire raw materials used in the automobile industry. The metal is known to be malleable and lightweight – this is why most automobile manufacturers choose it for the construction of wheels and other essential components of the car, including the engine blocks.
Plastics make up about 8 percent of the total raw materials used during a car production process. This raw material is utilized by automobile manufacturers for the construction of different components, such as door handles, dashboards, air vents, and airbags.
Rubber also plays an important role in the production of cars. It’s used to construct tires, seals, belts, and hoses.
Bottom line: several different raw materials are used during the process of manufacturing a car. Most times, car makers spend about 57 percent of the total cost of making a car on raw materials. For instance, let’s say the total cost of producing model A is $25,000. The cost of raw materials l, such as steel, aluminum, glass, and plastics, used for producing the car will likely be about $14,250.
How Much Does It Cost to Build a Car from Parts?
Here’s another quick question, what exactly is the cost of building a car from parts? To answer this question, I’ll say it depends on the type of spare parts you’re looking to use.
In case you don’t know, about 30,000 parts, including the nuts, generally make up a car. However, talking about the larger parts alone, a car only uses 1,800 parts. Furthermore, for you to build a car from these parts, you’ll need to perform several different welding works (about 4,800 welds to be precise) to get the components fitted together.
You’ll need to buy several different parts for you to build your car. Some of them include the metal stamped parts, transmissions and powertrain, engine parts, seating & interior trim, electrical parts, and a few others. With all of these components, it’s safe to say that you’ll most likely be spending thousands of dollars building a car from parts.
How Much Profit Do Car Manufacturers Make?
In the automobile industry, one of the three types of profit used is Gross Profit.
For those who don’t know, gross profit usually includes the cost of raw materials and production. It’s the difference that exists between the cost of building the car and the sales revenue. That said, the gross profit margin of most top automobile manufacturers on a single car can range between 10% and 21%. Of course, this depends on the type of car – a luxury car will certainly bring better profit.
How Much Would It Cost to Build Your Own car?
To answer this question, I’ll say it depends on a couple of factors, such as the cost of raw materials and auto parts.
One of the few factors that can determine how much it’d cost you to build your car is the type of raw materials. In most cases, the cost of raw materials and auto parts will take about 57% of the total cost.
Apart from raw materials and parts, another factor that’ll affect the cost of building your car is research and development. You certainly need to do thorough research before going ahead to develop the car.
What type of car are you trying to build? This is another factor that will determine how much it’ll cost you to build your car. If you’re looking to build high-end vehicles, of course, the cost of production will be higher.
That said, you’ll surely spend tens of thousands of dollars to build your car. If you’re planning to economize, a budget of at least $15,000 or $20,000 will most likely do the job.