RE:Jim Farley: EV adoption will take longer than expected'You can't have any pudding if you don't eat your meat!'
1979 The Wall
I see it differently.
Ford is clearly making billions with their traditional ICE lineup, with great margins as that is what people want. They are willing to pay more for getting what they want, and Ford sets the price high because they can. This is the pudding.
Keep in mind that the light duty vehicle market has also totally shifted from the way it was just a few decades ago from 30% trucks 70% small vehicles, to 70% trucks and SUVs and 30% small vehicles. (Can't find the chart at the moment)
Here is the meat: In order to be able to sell these profitable large ICE trucks and SUVs that consumers demand, and create the billions in earnings, Ford is forced by government mandates to produce an increasing fleet percentage of emissions free vehicles, and must continue to do so even though they are a money loser that many consumers do not want to buy.
In order to move EVs into a market that does not want them even with thousands offered in consumer government subsidies, they must discount them further and take even more losses.
This loss is offset by the profits made on ICE vehicles that consumers really want and are willing to pay more for. In time, they hope this might turn around, as more people are forced into EVs, and they can get the costs down to turn a profit.
Perhaps there will be a consumer revolt against EVs as the overall availability of cherished ICE modles decrease, and demand skyrockets as traditional ICE models become scarce like those cars after the muscle car era in the late 60's. New ICE prices may rise even further, and the used ICE market will flourish.
In 3 years, the steep depreciation rate of EVs is 52% vs 39.1% for an ICE vehicle.
Data from Feb 2023 shows average EV price was $US 65,202 vs $US 56,962 for ICE. After 5 years, an EV depreciates $US 43,515, while an ICE vehicle only $US 27,833. This is largely due to increased repair costs of EVs over ICE due to battery replacement, tires, brakes, and suspension issues from the increased weight they have to carry. (Kelly Blue Book)
As long as you don't live in Northern Canada, Alberta or Sakatchewan where power prices average double or triple that of those in the east, your EV will help you save money on energy/fuel cost to offset all the other losses.
IMO, the still overpriced Ford Lightning is the most appealing one to the consumer as it is designed more like a traditional truck with back seat space that real world contractors could use to toss in a load of bricks, a fridge, toys, and haul a boat or trailer and a generator, rather than a wierd 2 passenger spaceship wedge with limited storage and small cargo space that may appeal to a Marty McFly.
As Tesla is so technologically advanced and on the cutting edge, perhaps they will come out with a cargo replicator option that reproduces the items upon arrival at the destination to avoid the need to have enough cargo space available in their vehicles.
Unfortunately, the replicator might not be the solution here in Thailand and much of the rest of the world, where many trucks here drive around loaded with workers and extended families hanging on, sitting and standing in the back of the truck box.
Obscure1 wrote: Ford reported another nice BEAT for Q2 which was derived from continuing to fleece its ICE customers. Profits are so strong that Ford increased its earnings guidance for 2023 by $2 billion up to $12 billion
Meanwhile, Ford sustained a $1.1 loss on its EV division for the quarter which means that the company will lose more than $4 billion this year trying to figure out how to build a profitable EV.
Here is a question for all of "gas powered vehicles forever" crowd:
Why would Ford choose to lose $4 billion+ this year on EV's?
I can answer that question for you, but I want you to think about it.
When you have chewed through that one, I want to ask you another question:
How you feel about buying a Ford when you know that they are not even trying to hide the fact that they are massively over-charging for their ICE vehicles in order to fund the development of their EV platform?
Ford has openly admitted that they are transitioning to EV's. They have also admitted that they are transitioning as fast as they can. To that end, they recently slashed the price of the EV trucks by $10,000. Of course Farley said the price cut was due to lower costs despite the fact that the company lost almost $50k per EV that they sold in Q2. I guess the price cut had nothing to do with the fact that Tesla will be introducing its Cyber Trucks by the end of Q3.
Don't worry, we all know that we can TRUST Ford to look after our best interests.
How do you think existing Ford Lightning customers feel about suddenly seeing the value of their Lightning's drop $10k?
Existing Lightning owners are assured of facing further price deterioration when Tesla starts pumping out hundreds of thousands of Cyber Trucks at lower prices. To that end, Elon recently said that the Lightning was a good truck but expensive AFTER Ford announced the $10k price reduction.
For years now, the good ol' boys have financed the construction of Tesla factories through the payment for environmental credits. Tesla has used those credits to put legacy auto makers up against the wall.
Instead of asking why the legacy auto makers have been so stupid, you might consider that they have simply been passing the costs on to every ICE car buyer for years. In fact, if you have bought an ICE vehicle in the past few years, you have actually been paying Tesla to build EV factories.
The next time you think about over paying for an ICE vehicle (which you will because the legacy auto makers are not even trying to hide the fact), remember that you are subsidizing EV makers that are going to make your ICE vehicle obsolete long before the end of this decade. Every day that goes by, that reality increases.
Meanwhile, congratulations to Ford and GM and Stellantis who are making historical profits from the undying loyalty of their customers.