Ford hits the brakes on $12 billion in EV spending because EVs are too expensive

bbhaag

Diamond Member
Jul 2, 2011
6,722
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Looks like Ford it suspending expansion of one of its planned battery manufacturing facilities in Kentucky due to lack luster sales. BlueOval City is still going to be built in Tennessee though.

The car company says it isn’t backing off its next-gen EVs, but it is pausing some big factory projects, including one of two plants in Kentucky.

Here is another take on the news without the sensationalism of The Verge article.
 

bbhaag

Diamond Member
Jul 2, 2011
6,722
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maybe build more affordable EVs? i mean, that's always an option. also, corral the dealers so they're not putting horrendous markups on your vehicles.
Great point although I think if that was the case the Nissan Leaf would have been a greater success than it was.

I also have to wonder if the pending worker contract between Ford and the UAW might play a role? This is pure speculation of course but those increased wages, healthcare, and retirement benefits have to come from somewhere.
 

Fenixgoon

Lifer
Jun 30, 2003
31,743
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Great point although I think if that was the case the Nissan Leaf would have been a greater success than it was.

I also have to wonder if the pending worker contract between Ford and the UAW might play a role? This is pure speculation of course but those increased wages, healthcare, and retirement benefits have to come from somewhere.
  • Ford Motor annual gross profit for 2022 was $23.66B, a 9.08% increase from 2021.
  • Ford Motor annual gross profit for 2021 was $21.69B, a 50.71% increase from 2020.
  • Ford Motor annual gross profit for 2020 was $14.392B, a 32.14% decline from 2019.

i think there is plenty of meat on the bone to throw a few dollars at employees.
 

bbhaag

Diamond Member
Jul 2, 2011
6,722
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  • Ford Motor annual gross profit for 2022 was $23.66B, a 9.08% increase from 2021.
  • Ford Motor annual gross profit for 2021 was $21.69B, a 50.71% increase from 2020.
  • Ford Motor annual gross profit for 2020 was $14.392B, a 32.14% decline from 2019.

i think there is plenty of meat on the bone to throw a few dollars at employees.
Sure I completely understand that and agree with you. I'm just throwing out speculations and sharing automotive news that I find interesting.
 

sdifox

No Lifer
Sep 30, 2005
95,846
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If the EV adoption rate is lower then their original forecast, it makes sense to slow down the investment pace.
 

Ken g6

Programming Moderator, Elite Member
Moderator
Dec 11, 1999
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There are good reasons for people to wait to buy an EV until next year. For one thing, the federal tax credit becomes a point-of-sale credit that you don't have to return if your income is too low to owe tax. Colorado is also adding a $2500 tax credit for EVs or PHEVs under $35,000 MSRP. So maybe things will pick up in January.
 

K1052

Elite Member
Aug 21, 2003
46,519
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If the EV adoption rate is lower then their original forecast, it makes sense to slow down the investment pace.

Basically. They really need to still address the charging networks. Even Tesla still has a fair amount of dead zones in fairly developed areas of the country where locating chargers can be a problem.
 
Feb 25, 2011
16,811
1,485
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Great point although I think if that was the case the Nissan Leaf would have been a greater success than it was.

I also have to wonder if the pending worker contract between Ford and the UAW might play a role? This is pure speculation of course but those increased wages, healthcare, and retirement benefits have to come from somewhere.
Meh. The Leaf sucked, though.

It was cheaper, but you were still paying a hefty premium for a cheaply built car w/ 100 miles of range (if you were lucky) and no fast charging, from a company mostly known for making rental cars that grenade their transmissions at 40k miles.
 
Reactions: Zorba and Ken g6

manly

Lifer
Jan 25, 2000
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Meh. The Leaf sucked, though.

It was cheaper, but you were still paying a hefty premium for a cheaply built car w/ 100 miles of range (if you were lucky) and no fast charging, from a company mostly known for making rental cars that grenade their transmissions at 40k miles.
This is a rather harsh assessment.

IIRC prior to the Chevy Bolt, the Leaf was the best/only affordable BEV sold in the U.S. Although it was an econobox by all measures, they did boost the low range in the final version. Even the initial range was fine for its intended purpose, as a city car.

Not to suggest I'd buy a Nissan Leaf, but it wasn't a bad car. Due to the poor battery cooling (or lack thereof), they were insanely cheap off lease around 2018 or so.
 
Reactions: bbhaag

AdamK47

Lifer
Oct 9, 1999
15,290
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The love affair you guys have had with EVs has been waning recently. I just looked at the price trends on CarGurus for the Mach-E. Just about all EV vehicle values are tanking.



Meanwhile...
 
Reactions: Zorba and bbhaag
Feb 25, 2011
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Bro did you just really try and compare a Mach-E to an Audi R8? Get the fuck outta here with that.
Depending on the car, the decline in value is supply catching up and dealers not being able to pull that dealer markup BS.

It also wouldn't bother me much if used car prices in general returned to a pre-2020 level of sanity.
 
Reactions: Brainonska511

MrSquished

Lifer
Jan 14, 2013
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Basically. They really need to still address the charging networks. Even Tesla still has a fair amount of dead zones in fairly developed areas of the country where locating chargers can be a problem.

Yep. My sister and brother-in-law are very crunchy and take the environment in mind with many purchases. They will need a new car soon and they really want to get an EV but after research they just don't have confidence in the charging networks. They have two kids they want to take long road trips etc
 

bbhaag

Diamond Member
Jul 2, 2011
6,722
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Depending on the car, the decline in value is supply catching up and dealers not being able to pull that dealer markup BS.

It also wouldn't bother me much if used car prices in general returned to a pre-2020 level of sanity.
Well yes depending on the car is a great way to shift the goal posts.

For example lets compare a $50K Ford to a $125K Audi....like @AdamK47 did....
 
Reactions: manly

turtile

Senior member
Aug 19, 2014
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EVs don't make sense for most people, and I think it's hurting the efficiency of most cars because it eats up the battery supply. Most people rarely need gas for their regular commute if they purchase a PHEV. It's cheaper to buy and it's cheaper to replace the battery when it's old. Given the extra cost of EVs with the high-interest rate environment, it makes sense that sales are falling.
 
Reactions: highland145
Dec 10, 2005
24,288
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maybe build more affordable EVs? i mean, that's always an option. also, corral the dealers so they're not putting horrendous markups on your vehicles.
That would require them to not make land barges that eat up 2x the battery packs of an equivalent range sedan or hatchback.
 

bigi

Platinum Member
Aug 8, 2001
2,484
154
106
Let's forget Tesla, they will lead and ain't gong anywhere.
There are always around 10 EV manufacturers from China + Solid Korean offerings that will wipe US auto off the map if they don't wake up and keep spread lies to the mob. There are better EV offerings from Vietnam than from any US ICE builders.

No gasoline auto manufacturer can compete in the new world. They make stuff that is 5 years behind even when new, they don't have batteries and rely on 3rd party vendors, their software sucks or does not exist.

Even Rivian with their very good engineering and nice looking cars makes them too expensive to make a profit. They lose ~35K a pop.

The cool thing is that hardly anybody cares. Marry Barra will be retired by the time all is in shit with millions in her pocket. Toyoat is gonna smoke people with their hydrogen and Audi will keep introducing concept cars only.

Ioniq 6 from Hyundai will start at 39K starting 2024. Refreshed Tesla 3 is below 40K and will sell like hot cakes with cherry on top. This is touching corolla pricing with rebates.

EVs too expensive?, yea, only when GM and Ford and Rivian make them.
 

manly

Lifer
Jan 25, 2000
11,283
2,321
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EVs don't make sense for most people, and I think it's hurting the efficiency of most cars because it eats up the battery supply. Most people rarely need gas for their regular commute if they purchase a PHEV. It's cheaper to buy and it's cheaper to replace the battery when it's old. Given the extra cost of EVs with the high-interest rate environment, it makes sense that sales are falling.
Except sales are not falling, and some of your statements are just opinions. PHEVs are also EVs. What you are getting wrong is that BEVs shouldn't be replaced by PHEVs, but rather every single ICE auto on the market should at least have a hybrid option. (Note this could have been achieved years ago.) In general, I'm for the free market's invisible hand, although that often leads to undesirable outcomes. We're not trying to electrify the personal auto market just because it's a cool, new thing. After decades of our foot-dragging on cutting carbon emissions, outlier weather events have really accelerated in just the past few years. If economic incentives don't work quickly enough, I'm fine with the looming EU/California ban on ICE sales from 2035+.

Although I said in the CyberTruck thread that I'm optimistic the U.S. BEV adoption curve will track that of California's (and beyond), it's not a foregone conclusion. Culture war nonsense has already infiltrated the room, as MAGA Republicans hear the former President make claims that BEVs are not good for the domestic auto industry or its workers. Given the American consumers strong preferences for light trucks and slow uptake of EVs in this product segment, it'll likely take a while yet. Manufacturers certainly didn't help when they all fumbled the Covid supply chain football, and then parroted Tesla by furiously raising prices to capture higher profits in 2022. More recently, Tesla has sparked a price war and federal subsidies have made the value proposition a lot more interesting.

Gotta love it that the resident assclown thinks a VinFast BEV is better than Detroit's EVs.
 
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Ken g6

Programming Moderator, Elite Member
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Dec 11, 1999
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PHEVs don't always have a pure EV mode. I expect that, if the latest EPA CO2 rules stand, most cars will have some way (not necessarily an easy or quick way) to plug in a hybrid battery. But it may be only a 48V starter-generator mild hybrid that helps turn the engine. It may still have the desired effect of lowering CO2 emissions, depending on how often it's plugged in, but not by as much as a pure EV.

I'd like to see all the PHEVs I expect are coming add solar panels, so they charge whether they're plugged in or not.
 

Ajay

Lifer
Jan 8, 2001
15,908
8,052
136
Basically. They really need to still address the charging networks. Even Tesla still has a fair amount of dead zones in fairly developed areas of the country where locating chargers can be a problem.
That is a big one. Range would be far less of an issue if there were as many charging stations as gas stations. Secondly, cutting charging times down. Lastly, getting prices down (excluding the land barge problem @Brainonska511 mentioned). I hope to by a BEV in a couple years when it's time to send off my Camry to it's likely last owner.

Unfortunately, growing the EV market 'organically' just won't work and China was the first to recognize this. Straight out subsidies at POS (!tax rebates) would help, as would raising the price limit. If we want to switch over to selling almost exclusively BEV in 20 years, we will have to spend more than the $83B allocated by the Biden Admin and Congress. Changing out and entirely ICE/Fossil Fuel based transport economy is a pretty heavy lift. The very large auto Industry as a whole and consumer momentum argue against any organic growth (particularly on the consumer side based on savings in the first 7-8 years the first owner keeps the car).
 
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