You kind of had to feel for Ford after 2022’s dismal results. The folks from Dearborn are putting out some very strong products these days, but they got hammered by sky-high quality issues and recall costs and also took a bath on the demise of autonomy company Argo AI. The good news, however, is that Q1 of 2023 represented a very nice upswing—but to absolutely no one’s great surprise, it’s still gasoline cars making all the money. Making electric cars is hard and expensive; who knew?
We have that for today’s morning news roundup, plus some tough news for Porsche-philes, some hydrogen news out of Toyota that doesn’t involve the Mirai and even more surprise overnight Tesla pricing news that you should probably know about. Onward and upward, Autopians.
Ford Rises In Q1
All year, we’ve been briefing you on Ford’s quality problems and how they helped contribute to a disappointing $2 billion loss in 2022. (For comparison’s sake, General Motors closed the year with a record net income of $14.6 billion and everybody got nice bonuses as a result.) Clearly, Ford had some work to do to get back on track for 2023.
If Q1’s results are any indication, that work is paying off. Ford’s net income came in at $1.8 billion, a nice reversal from both full-year ’22 and the same quarter last year. Also not bad considering the weakening demand for “foreign” brands in China.
Here’s the breakdown from Automotive News, with some emphasis in bold from me:
I highlighted that first bit because it’s worth noting that higher car prices are breaking the bank for consumers, but they’re paying off nicely for car companies and their investors. Don’t expect that trend to cool off anytime soon, unfortunately (for us.)
I highlighted the second one because now I want “Boringly Predictable, But Extremely Ambitious” on a t-shirt.
Now, the really interesting news here is that this is the first time Ford has broken out results for Ford Blue, which makes the gas-powered vehicles; Ford Model e, which does the EVs; and Ford Pro, responsible for commercial vehicles. Those are on the books as separate business units now. And Ford lost $722 million on the EV business in Q1.
Again, this isn’t a surprise, and I don’t mean it as a criticism here. Even Ford has warned that it expects losses for the EV business for a while and they could total up to $3 billion this year. The electric future will for now be financed by the sale of gas cars and trucks and commercial vehicles. It takes a long, long time before an electric car business is scalable and profitable; Tesla only pulled this off with consistency in the last few years.
Either way, Ford has some nice momentum for the rest of the year now. And speaking of EVs, make sure you take note of the Mustang Mach-E price cut news from yesterday. I would never want you to miss out on a good deal!
The Tesla Model 3 Long Range Is Back, And With A Price Cut Too
On my off-hours, I like to unwind by working out, or reading, or just watching some good prestige streaming TV drama with my wife. (Not very ambitious, I know, but still boringly predictable.) Elon Musk, on the other hand, likes to cool off after a hard day’s work at his three companies by tweeting out late-night changes to Tesla pricing and inventories. To each their own!
Perhaps even spurred by that Mustang Mach-E news, Musk announced that the Model 3 Long Range model—now listed with “325+” miles of range—is back and at a new price point. That model had been phased out for a bit but now it’s back. Here’s Reuters on that:
Tesla Inc (TSLA.O) has resumed taking orders for its Model 3 long-range version in the United States, the company’s website showed late on Tuesday, after a temporary halt last year due to delivery backlogs.
The long-range version of the entry-level Model 3 is priced at $47,240 currently, about 18.5% less than the $57,990 it was priced at last August when Tesla halted taking orders in the U.S. and Canada.
“Waitlist is too long. Will enable again as we ramp production,” Chief Executive Officer Elon Musk tweeted at that time in response to a user’s inquiry about the discontinuation of orders.
That’s a tempting price. If I bought a Tesla, this is the one I’d want. (I like the size of the Model 3 better than the Model Y.)
Now, the folks at Electrek dug up some interesting details too, namely that this revamped Model 3 Long Range may pack cheaper LFP batteries—but that they also could be made in China. This is why this Model 3 is only eligible for $3,750 in EV tax credits, not the full $7,500:
First, the car is now listed as having “325+” miles of range, as compared to the previous 358 miles. LFP is a cheaper, less energy-dense technology, so it would make sense that a pack might have less energy in it, and less range as a result.
Second, the car is now listed as receiving only $3,750 of the US EV tax credit, like the Standard Range.
This is due to the way the Inflation Reduction Act tax credits are structured. To qualify, a car must be assembled in North America, but also must source 40% of its critical minerals from the US or free trade countries, and 50% of its battery components must be built in North America. These percentages will go up year by year, but they’re set at those levels for now.
Since the Model 3 Standard Range only qualifies for one of these two categories, it only gets half the credit. This is because it gets its LFP batteries from CATL, a Chinese battery supplier. The same goes for the new Long Range, and so we suspect it’s using the same battery supplier.
And Ford also cut the prices on the Mach-E via these cheaper LFP batteries, but in Ford’s case range went up, not down. I’m very curious what the “final” EPA estimated range will be on the revamped Model 3 Long Range. Never a dull moment in the EV pricing world.
Here’s Porsche’s Plan: Price Increases
Skyrocketing car prices, weird economic conditions, pandemic woes and supply chain issues haven’t put a dent in luxury car sales. Very much the opposite, in fact. All of those brands have been posting record profits for years.
The good news for Porsche and its shareholders: the German automaker’s profits were up a full 25% in Q1 to about $2 billion. And it’s one of the few brands that seems to be doing well in China (remind me to look more into that one.)
The bad news for prospective Porsche owners? Prices are going up. Here’s Reuters on that:
Porsche will raise prices by 4 per cent to 8 percent in Europe and the U.S. in the second half to combat higher costs that weighed on returns in the first quarter.
The company is still seeing issues with the supply of semiconductors and parts for the electric Taycan’s high voltage heating system, but expects them to ease in the coming months, Chief Financial Officer Lutz Meschke said on Wednesday.
Operating profit rose to 1.84 billion euros ($2.03 billion) while revenue increased to 10.1 billion euros in the first quarter, the company said. That’s roughly 25 percent higher than last year when supply-chain disruptions were dragging on the industry.
Deliveries increased 18 percent to 80,767 vehicles, boosted by a large increase in China.
A real bummer for me, personally. I was going to buy myself a 911 Turbo S Cabriolet this year to thank myself for being as awesome as I am, but thanks to these price increases I’ll probably just get a used Honda minivan instead. Darn!
Anyway, Porsche will be fine, clearly. And it’s better in this current moment to be a high-demand, high-margin luxury brand than a more mainstream one.
Toyota Finds A Path For Hydrogen
First, some setup for this final gear. In the last week, the good folks at Automotive News put out a whole package on how the different global automakers are attacking carbon emissions. More than robotaxis or anything else, cutting down on their carbon footprints and individual cars’ CO2 emissions is the number-one strategy driver right now (besides making money, obviously, and those two goals can be quite often at odds with one another—especially in the short term.)
The publication’s Japanese auto industry correspondent has a good explainer on why Japan’s car companies have been so hesitant to go full-tilt on battery EVs, such that they’re now having to play catch-up to competitors in the U.S., Europe and especially China. They especially want to make money in that last market and that means ramping up battery power.
But if you’ve ever wondered why this happened, it has a lot to do with where Japan’s electricity comes from after the past decade’s nuclear disaster:
Thermal power — as exemplified by the mammoth coal-fired Hekinan plant, one of the world’s biggest carbon dioxide emitters — accounts for about 75 percent of the country’s energy, according to the Japan Automobile Manufacturers Association. That compares with just 39 percent in Europe, where nuclear power is more prevalent.
Japan once relied more heavily on nuclear power, but most of its plants were mothballed after the 2011 Fukushima nuclear disaster. Thus, a wholesale switch to EVs would have a limited impact on overall carbon emissions because those cars would get a lot of their charge from burning coal.
That’s part of the equation, surely. I also think there’s a general reluctance for any automaker to burn cash on EVs if they aren’t sure it’s 100% the way forward; see Ford’s Q1 results for any indicator. But Japan’s automakers face a conundrum. The country exports half of the 10 million vehicles it makes in a year, and those markets are trending electric, but on the homefront, buyers are super lukewarm. EVs have only a 1.4 percent market share in Japan, Automotive News reports. (Also, Toyota’s been very right that it’s a global automaker and EVs are awfully hard to roll out in some of its bigger developing markets, like Africa.)
Hence the multi-pronged approach to reducing emissions through hybrids, which we at this site support, especially when they’re fast, and hydrogen fuel-cell vehicles. Finally, now, I come around to my actual point (I just want to make sure you’re getting your money’s worth reading this site) which deals with H2. This week is the Advanced Clean Transportation (ACT) Expo, which deals with zero-emission fleet solutions. So if you’re Toyota and you spent a ton of money on H2 technology that just doesn’t seem like the future for cars, what are you to do instead?
A very smart solution on Toyota’s part is to commercialize H2 technology for trucking and heavy industry use, where many experts posit it has a better use than battery-electric vehicles do. Here’s what Toyota announced at the ACT Expo:
PACCAR and Toyota Motor North America, Inc. (Toyota) today announced an expansion of their joint efforts to develop and produce zero emissions, hydrogen fuel cell (FCEV) Kenworth and Peterbilt trucks powered by Toyota’s next-generation hydrogen fuel cell modules. The expanded agreement supports ongoing development and commercialized zero-emission versions of the Kenworth T680 and Peterbilt 579 models featuring Toyota’s hydrogen fuel cell powertrain kit, with initial customer deliveries planned for 2024.
PACCAR and Toyota have collaborated on FCEV truck development for the past several years, including a successful pilot program which deployed ten Kenworth T680 FCEV trucks at the Port of Los Angeles. The pilot provided both Kenworth and Toyota with real-world feedback that further enhanced the performance and range of the vehicle. Designed for use in heavy-duty commercial vehicles, Toyota’s heavy-duty fuel cell electric powertrain kit was recently awarded the Zero Emission Powertrain certification by the California Air Resources Board (CARB). Toyota will begin assembly of the modules in the United States in late 2023.
John Rich, PACCAR chief technology officer, commented, “Having worked extensively with the Toyota team, we are confident that our combined efforts can deliver industry leading FCEV trucks with all of the quality, reliability and aftermarket support that Kenworth and Peterbilt customers depend upon. This partnership further expands PACCAR’s industry-leading lineup of zero emissions vehicles that enhance customers’ operational efficiency and reduce their environmental impact.”
More H2 heavy trucks powered by Toyota technology, in other words. Also, Hyundai’s doing basically the same thing, since it’s probably fair to say the Nexo isn’t the future of personal transportation. But H2 makes a ton of sense for long-distance hauling and commercial vehicles; I’ve heard it could functionally take the place of diesel as battery EVs eventually take the place of gasoline in mainstream cars.
Your Turn
If we’re talking about “green” energy strategies and lower-emission cars, who’s getting it right at the moment in your book? Who needs to do better? I often laugh at the irony of financing an EV revolution with giant truck and SUV sales, but this is very much the situation the auto industry finds itself in.
I assume the difference between Tesla seeing a range drop and Ford seeing a range bump from LFP has to do with the battery form factor. The less.. energetic failure mode of LFP means the battery needs less protection. The Mach-E uses pouch cells that are externally protected, so it’s relatively easy to redesign to pack more in. Tesla’s cylindrical cells are less flexible since a lot of the structure is already built into the cells.
Considering they are looking at long haul trucking for usage with hydrogen, why not the cruise ship industry as well? I’m no scientist, but a hydrogen leak seems like a better alternative to dropping nuclear material or fossil fuels into the ocean in the unfortunate and inevitable event of a crash.
Since Hydrogen is one of the biproducts of nuclear reactors a hybrid approach would probably be the most efficient for cruise ships. Or they could just offload the H2 each day at port as an additional revenue stream.
The Italian Line came pretty close to building a nuclear ocean liner in the 1960s, with the ludicrously gigantic size of modern shops, it would arguably work a lot better today (their problem was that the giant reactor compartment cut the ship’s interior up into separate spaces with poor traffic flow that made it impossible to convert into a single class for cruises after ocean liners went obsolete), but, modern ships have so many decks, the reactor would just be buried all the way down at the bottom and most of the deck layouts above it would be no different than on a diesel
In the event of a reactor breach, could the Captain and first officer or chief engineer dump the reactor core into the ocean?
Computer, initiate reactor core ejection sequence. Authorization Data Epilson 7301 Alpha Alpha.
I’m guessing that would create a bit of steam parboiling the crew and guests.
“Boringly Predictable, But Extremely Ambitious”
This should be the next Autopian T-Shirt. You could have a David Tracy edition with a Rusty Jeep or a BMW i3. A Torch edition with a yellow beetle or a taillight. A Mercedes shirt with a Smart.
I suspect the future has a place for both H2 and BEVs because the two have some potential synergies. Theoretically in some pie sky future you could have a refill station out in the middle of nowhere with solar cells/wind turbines, storage/buffer batteries, fuel cells, and a water supply that could provide both electricity and H2 as needed.
The sick fun part will be the very rare, but femtosecond fast H2 oxidations that occur on video. Viral baby.
The Porsche stuff is a real bummer but not a surprise. I feel like a lot of enthusiasts who came up around when I did (I’m in my early 30s) are seeing our salaries and dreams be outpaced by the prices of lot of the cars we’ve been lusting after since we were kids. Things like a Boxster, used 911, BMW M car, Supra, Corvette, etc. seemed a lot more attainable only a couple of years ago. But the cost of entry continues to creep higher, and higher, and higher…which in turn keeps prices on secondhand examples sky high. The Porsche Tax is very, very real.
Obviously this is a first world problem and I understand that I’m speaking from a place of privilege here, but it’s kind of sad to find sustained success in your career, continue to climb the ladder, continue to get raises, and see the goal posts keep getting moved. Maybe I’m overly optimistic, but in my mind saving to be able to afford to buy in the 50-60 grand range should be able to nab you a solid enough example of some of these semi attainable dream cars, but it just doesn’t anymore.
I think it’s kind of a shame…and to put things into perspective my wife and my household income is probably in the top 5-10% of the country. I’m not saying that to flex at all (money is fake) but to point out the fact that pretty much all sports cars are now being coated unobtanium. Shiiit…Honda, Toyota, and VW are charging $45,000 for fire breathing versions of their economy cars right now and people are lining up around the block to pay way over MSRP for them.
It’s sad. I guess there will always be plenty of Miatas and pony cars out there for us rubes but I don’t think anything special is going to be within reach of probably 99% of the country in the next couple of years.
You’re getting raises? 🙁
That sucks about Porsche pricing, but hopefully we’ll see increased resale value to help offset it.
If I was going to buy a Tesla, the Model 3 Long Range was the one I was looking at. But, now due to the price difference and the lack of full $7,500, the Model 3 Performance ends up only being around $2,500 different. That $ buys you things that most enthusiasts like. If you wanted to increase range, buyers of the Performance have picked up lighter weight wheels/tires and gain back the lost efficiency due to the factory 20″ rolling stock.
“Ford Mounts A Comeback In ‘Very Smooth’ Q1 But Gas TRUCKS Still Pay The Bills”
There… fixed the headline for accuracy
“The Tesla Model 3 Long Range Is Back,”
Still not back yet in Canada though…
“Toyota Finds A Path For Hydrogen”
No they didn’t. Hydrogen will fail just as badly in Trucking/Commercial vehicle segment. Why? If hydrogen vehicles couldn’t make it in a less TCO-sensitive segment like consumer vehicles, they don’t have a snowballs-chance-in-hell of making it in a more TCO-sensitive segment like trucking and commercial vehicles.
The TCO of hydrogen vehicles is barely competitive with regular diesel vehicles, let alone hybrid diesels or BEVS. And that’s because hydrogen lacks the efficiency BEVs have AND have higher upfront costs AND have higher fuel costs AND have much higher infrastructure costs.
All Toyota is doing here is trying to find a way to minimize the losses from a bad investment they made.
“Thus, a wholesale switch to EVs would have a limited impact on overall carbon emissions because those cars would get a lot of their charge from burning coal.”
That line of reasoning has been debunked so many times by actual knowledgeable scientists it isn’t funny anymore.
Any time I see this bullshit claim, it’s clear it’s either coming from the oil industry or a company/organization that feels threatened by BEVs (because BEVs make their investments in other areas like hydrogen obsolete).
In this case, the pusher of this BS is clearly Toyota.
“If we’re talking about “green” energy strategies and lower-emission cars, who’s getting it right at the moment in your book? ”
Tesla. And it’s Tesla by a wide margin. It’s not even close.
“Thus, a wholesale switch to EVs would have a limited impact on overall carbon emissions because those cars would get a lot of their charge from burning coal.”
That line of reasoning has been debunked so many times by actual knowledgeable scientists it isn’t funny anymore.”
So it doesn’t matter where our cars get power from? You might be on to something there! I think I’ll continue using gasoline to power my car.
It matters, but it’s likely going to be easier to replace the polluting plants than change out all of the vehicles (although we’ll end up doing both, really.) The big gain from this is less to do with climate (it’s going to change anyway) but a lot to do with petro conflict. We’ll still need oil and gas for other things, but not nearly as much. Waiting for the “Middle East becomes peaceful because nobody cares about it anymore” headline, but I guess they’ll always find something to fight about because they always have.
That’s not what he said at all. In fact, quite the opposite. The only people still claiming that EVs are not cleaner than ICEs because of coal power plants are gas companies and politically motivated assholes trying to score points against their more progressive counterparts at the expense of the entire planet.
It’s becoming more and more clear that Tesla is really just the supercharger network.
What is making that clear?
Nobody’s getting it right because we are trying to maintain peak consumption while going green. If you really want to reduce emissions you need good public transit, affordable housing in mixed-use areas, and (perhaps most importantly) mechanisms in place to ensure the ultra-rich reduce emissions. Even a coal-rolling bro-dozer doesn’t do nearly as much as private jets for a couple passengers.
We also need to enforce strict environmental standards for corporations. Not slap them with a fine that is less than the savings from doing the wrong thing. Real penalties for the companies and the decisionmakers.
You don’t solve this by encouraging everyone to buy their way out. Sure, we can all do our best to reduce our footprint, but they keep shifting the problem away from those who do the most damage and who could do the most good.
This is the correct take.
^^^
ding ding ding
what Drew said
I few months ago I saw a presentation that had a quick slide on CO2 emissions in the US, that the bottom 50% of the population averaged ~8 tons/CO2/year/person, the 50-90% averaged ~15 tons (also about the overall average for the whole country), and the top 10% were at ~75 tons. It makes sense, and I’m sure would be even more ridiculous if the top 1%, 0.1%, etc were broken out. Basically, the top 10% of the US is over 40% of the country’s CO2 emissions, and is roughly on par with all of Africa and S America combined, or all global shipping and aviation combined. Putting a $5/gallon CO2 tax on jet fuel for private jets and similar things seems like some really low hanging fruit. As far as I’m concerned, everyone should be doing everything they can to reduce the mess we will leave for future generations to clean up, but aggressively going after the people with excessively huge carbon footprints seems very logical.
How does analysis like that account for corporate emissions?
If stockholders are being credited with emissions from companies that they “own” but can’t generally in practice direct the activities of, that seems misleading.
Private jets are like the 0.00001%, even a 0.01%-er isn’t likely to ever sniff that rarified air. It’s low hanging fruit, but probably inconsequential in the scheme of emissions.
Ouch, I’ll take “how well did our ‘critical infrastructure’ fare during COVID-19” Alex. Whoops, NYC folks bought cars in droves. Drew, it’s a nice theory but it failed the reliability test.
It appears the data does not really support that. People didn’t register cars early in the pandemic, then they registered a large number at once after lockdowns lifted. It’s a bounce, not a rise. https://archive.curbed.com/2020/9/18/21444250/car-buying-new-york-coronavirus-vroom-boom
Even if it did, screwing up once doesn’t mean it can’t be done. We aren’t seeing Japan abandon rail now. If you move people away from a reliance on cars, you must also continue to support the infrastructure and keep it running, even if that means you have to find ways to address risks without cutting people off from services. Is America pretty bad at maintaining and supporting infrastructure? Absolutely. But a wealthy country like this can choose where to allocate resources and do so much better.
If hydrogen is going to be the standard in commercial trucking, that means it will be viable for personal transport as the infrastructure will need to be built out. I’m not completely sold on hydrogen fuel cells but they do have one killer feature for personal transportation use – quick refilling. And who doesn’t like the weird water-peeing thing that the Mirai does at stop lights?
Frankly I think it would be much easier for the general public to transition to a slightly different looking pump at something that looks like a gas station than the paradigm shift that charging represents. Also, we could transition to creating more and more hydrogen from renewable sources as time goes on. There are of course downsides that are well-documented. But in a world where trucking uses hydrogen, I think there’s room for FCEVs in addition to BEVs.
Couple of thoughts. The hydrogen infastructure for trucking will likely be built primarily on major shipping routes and/or at distribution centers for local deliveres and may not be accessible to the general public. Secondly, hydrogen (at least green hydrogen) is going to cost about double in $/mile vs batter ev that can be charged at home. The trucking industry may be willing to pay this for the refill time and energy density, but it seems doubtful anyone (at least that can charge at home) is going to willing to pay the extra cost.
Well I think we’ve all seen how costs can go down when industry gets behind something, so I don’t think it’s totally fair to assume costs for green hydrogen will stay the same or go up while battery costs go down. Not to mention that EVs followed the exact model you’re talking about for infrastructure: major cities/routes first. You might even argue that EV infrastructure still isn’t particularly good outside of major urban areas. I guess what I’m getting at is all the arguments for why BEVs can improve essentially apply to FCEVs too.
I do agree that BEVs will be the solution for most people, but the group of people that can’t (easily) charge at home is bigger than many EV-only advocates think. I’m advocating for an “all of the above” approach to personal transportation: hybrids, efuels, BEV, PHEV, FCEV. None of those are going to work for everyone in every case and that’s ok.
Japan had a 23% reduction in emissions from vehicles over 8 years from pushing hybrids, that’s not insignificant, and, given the maturity of the technology, could have been done pretty well everywhere at the same time, but wasn’t.
I think part of the problem is hybrids got caught up in a culture war, the Prius was painted as a weenie car for sandal wearing/granola munching California hippies, and that reputation pushed people who didn’t want that association away from the technology, and automakers were slow to push it in normal looking cars and never expanded it totally across their full lineups. Also, GM and Chrysler really half-assed their early versions, which made it seem pointless
Wow, never knew Japan was that reliant on coal. That really makes sense for them not to go full EV in their home market. Maybe they should go H2 in their market and EV in exported markets?
Except that hydrogen is likely generated by coal plants for the time being. Hopefully H2 generation and transportation scales up with a continued push towards clean power globally. For Japan, its large amount of coastline holds a lot of promise for wind farms.
https://www.nature.com/articles/d42473-022-00217-8#:~:text=Japan's%20coastline%20stretches%20for%20almost,country's%20current%20annual%20electricity%20demand.
Even worse, hydrogen production is much less efficient than straight electricity production for EVs. Not only is your power still dirty, you’re using multiple times as much too.
If we want to be green, we should incentivize companies to allow work from home. A tax break for every position that is allowed to work from home, and they’d be all over it.
“the situation the auto industry finds itself in.” – because it’s being bludgeoned into it by governments that are pushing the tech as a complete replacement before it’s ready. Yesterday’s article about PHEVs shows how they’d make a lot more sense in the short term, but governments don’t want to use facts to make judgements. EVs are great fro some people right now and not so great for others, but PHEVs would work for a lot more people (still could be an issue for apartment-dwellers with no place to plug in regularly).
Human nature is likely to blame. Everyone wants a silver bullet for their woes, from health to finances. It’s a lot easier message for lobbyist to tell politicians, who then parrot to their constituents, “go all in on EVs” then “hey, so we’re going to need to do a multi-tiered approach…some EV, some PHEV, a dash of hydrogen, and a hell of a lot of public transportation.”
Anyone else thinking there will be a bigger EV push back down the road as “rare earth elements” become even more rare, more people get frustrated by the infrastructure, and apartments/multi-family dwellings are left out to dry with charging?
Good shouldn’t be the enemy of the perfect and PHEVs are a fantastic (and cheaper solution) for the 65% of Americans who have a home.
I knew Toyota would have contingency plans for the hydrogen tech, though I’m curious to see how this plays out. As it stands, H2 transport is not technically legal in NYC as it’s illegal to bring a H2 vehicle over any bridge and tunnel
Not a contingency plan, they’ve been in heavy vehicle hydrogen for 20+ years now, much longer than they’ve had the Mirai. They put some FCEV busses on the streets under the Hino brand back in the early 2000s and have had various other projects and collaborations throughout.
I keep trying to drive a Mirai into Brooklyn to test this, but I always run out of juice somewhere in Arizona.