A great deal of ink, both the internet kind and the real kind, has been spilled over Ford’s big losses this year on the electric vehicle front—and many have speculated those shocking numbers will lead to a retrenching and rethinking of EVs. In reality? Not quite, according to its future plans.
That leads off a Monday edition of the morning news roundup, and one where I hope you aren’t working too hard right before Labor Day. Also on today’s docket: the United Auto Workers union clear the way for a potential strike, Tesla’s Autopilot goes on trial, and more VinFast shenanigans. Let’s take a look.
Ford To Axe Escape, Edge And Transit Connect Amid EV Push
Yes, Ford is set to lose $4.5 billion more this year than expected on EV and battery production. You know who else has said that sort of thing is normal? Elon Musk. Getting ready for a different sort of future costs money, and though EV critics have thrown that huge cost up as an example of this pivot not being worth it, for Ford, it’s that or face a future where it’s less relevant and less competitive against new rivals.
But that does mean losing some gas cars to EVs, too. Automotive News reports that the Escape, Edge and Transit Connect are all headed for cancellation soon enough. The Escape will become an EV crossover (and the Bronco Sport is outselling it anyway), the Edge won’t be super missed and the Transit Connect will just live on in Europe. More on those future plans:
Although the company is finding the electric transition to be harder than previously expected — it delayed some production goals this year — executives are speeding ahead with development of a second-generation platform to underpin EVs assembled at the new Blue Oval City plant in Tennessee and a retooled plant in Oakville, Ontario.
CEO Jim Farley recently said the company plans to quadruple hybrid sales in the next five years, following success with hybrid Maverick and F-150 pickups.
It’s got plenty of other gas cars and trucks to print money in the meantime.
UAW OKs Strike Against Big Three If Negotiations Fail
On Friday, UAW members sent the message they’ve been waiting to send by “overwhelmingly” voting to clear union leadership to potentially strike during negotiations with the Big Three Automakers.
Note that this does not mean they’re on strike. They just OK’d their leadership to make that call for them if a deal cannot be reached, and have signaled they’re serious about all of it. The Detroit Free Press has a good rundown of the situation:
The strike authorization vote is more of a formality and was expected to pass, but given the strong rhetoric around the potential action against the automakers, it was given more weight this time than in the past.
On Friday midmorning, the UAW said final votes were still being tabulated, but the current combined average across the three automakers was 97% in favor of strike authorization. The UAW did not provide raw vote numbers or release how many of the 150,000 members who work across the Detroit Three automakers turned out to vote.
The vote does not guarantee a strike will be called, only that the union has the right to call a strike if it cannot reach an agreeable tentative contract. The current contract expires Sept. 14.
“Our goal is not to strike, our goal is to bargain a good contract for our members. But we prepare for a strike so that we’re ready no matter what happens,” UAW President Shawn Fain told members during a Facebook Live broadcast Friday from UAW Local 862 near Ford Motor’s Louisville Assembly Plant in Kentucky. Union members there were holding practice pickets Thursday and Friday.
Are the automakers prepared for a strike, parts- and inventory-wise? Kinda, but there’s only so much you can do:
Ford’s inventory, which the automaker does report, has dropped by more than 12% in August compared with July, he said. Ford’s inventory drop is normal for this time of the year, he said, noting that production of some key vehicles, like the Explorer and Expedition, were abnormally low in June and July, possibly due to a lack of parts. Additionally, the Mustang and Ranger small pickup are transitioning between generations.
“While dealer inventories haven’t grown significantly, there are a few more vehicles available to cover a short strike, but there’s simply no way the automakers could prepare for a protracted factory shutdown,” [Sam Fiorani, vice president of Global Vehicle Forecasting at AutoForecast Solutions] said of the Detroit Three.
The UAW’s contract with the automakers expires a minute before midnight on Sept. 15.
Autopilot On Trial In California And Florida
People often forget this, but a big reason Tesla’s stock price is valued so highly is that Elon Musk keeps saying it’s got the whole “self-driving car” totally handled. Never mind the fact that he’s been saying so since 2016, or thereabouts—autonomy is key to Tesla’s future value.
But Autopilot is about to face two major court cases that could shape its future, both in terms of liability and the overall legal bills that are piling up. Here’s Reuters:
Tesla faces two trials in quick succession, with more to follow.
The first, scheduled for mid-September in a California state court, is a civil lawsuit containing allegations that the Autopilot system caused owner Micah Lee’s Model 3 to suddenly veer off a highway east of Los Angeles at 65 miles per hour, strike a palm tree and burst into flames, all in the span of seconds.
The 2019 crash, which has not been previously reported, killed Lee and seriously injured his two passengers, including a then-8-year old boy who was disemboweled. The lawsuit, filed against Tesla by the passengers and Lee’s estate, accuses Tesla of knowing that Autopilot and other safety systems were defective when it sold the car.
The second trial, set for early October in a Florida state court, arose out of a 2019 crash north of Miami where owner Stephen Banner’s Model 3 drove under the trailer of an 18-wheeler big rig truck that had pulled into the road, shearing off the Tesla’s roof and killing Banner. Autopilot failed to brake, steer or do anything to avoid the collision, according to the lawsuit filed by Banner’s wife.
Horrific on both counts. And here’s why the two matter so much:
“If Tesla backs up a lot of wins in these cases, I think they’re going to get more favorable settlements in other cases,” said Matthew Wansley, a former General Counsel of nuTonomy, an automated driving startup and Associate Professor of Law at Cardozo School of Law.
On the other hand, “a big loss for Tesla – especially with a big damages award” could “dramatically shape the narrative going forward,” said Bryant Walker Smith, a law professor at the University of South Carolina.
Tesla also faces a probe into Autopilot by NHTSA, which is due to wrap soon, and a Justice Department criminal investigation over its self-driving claims as well. It’s all looking… not great, to put it simply. [Ed note: Patrick covers all of this in the latest episode of Vox’s Land of the Giants podcast, which I can recommend – MH.)
VinFast’s Stock Price Continues To Prove That Wall Street Is Mostly Make-Believe For Grown-Ups
As I write this, Vietnam’s VinFast is now the world’s third-most valuable automaker by stock price, despite, well, reviews where the headline is just “Yikes.” Keep in mind it’s because it went public in the U.S. with a SPAC deal and then nearly all of the shares were bought by one man, VinFast’s billionaire owner. But since then the small amount of shares that are for sale have spiked prices upward in crazy ways, reports Reuters:
Shares of Vietnamese electric-vehicle maker Vinfast surged 30% in premarket trading on Monday, extending a rally from last week that more than quadrupled its market value to $160 billion.
The company made a blowout debut on Wall Street this month and has quickly grown in valuation to become the third-most valuable automaker – only behind Tesla (TSLA.O) and Toyota (7203.T).
But Vinfast’s small amount of publicly available shares has made the stock prone to volatility, with shares jumping or slumping more than 14% in 11 of the past 12 sessions.
The stock was on track to add nearly $50 billion to its market capitalization, based on the premarket share price of $90.55.
That potential one-day gain will be more than the individual valuations of major U.S. automakers Ford Motor (F.N) and General Motors (GM.N).
I hope everyone involved with this is just having such a fun little time.
Your Turn
Is Ford doing the right thing with its future strategy?
Ford is largely responsible for their union woes. In 1932, broke and starving auto workers staged the Ford Hunger March from Detroit to Dearborn where they were confronted by Dearborn Police and Ford contract security guards. Five workers died and 60 were wounded in what became known as the Ford Massacre. The incident was a key catalyzing moment in the formation of auto worker unions.
As long as the Fairmont, Fairlane, LTD, and Granada are still available for us normies I am ok.
Ford and GM’s massive profits on trucks is no joke, and driven directly by us, the consumer, paying more for our vehicles already and into their pockets.
I don’t think the EV-shift changes that Ford/GM/Ram fleece the public for profits on their trucks that people seem to willing to chase – and seem a little too happy to pay for.
For, yes. The rest of world w.r.t. Vinfast, no.
For some reason, I’ve always thought the Edge/Venza sized and shaped vehicles were where Size/Cost/Livability lines converged on the graphs for the average population in the world. Not my fancy, but a logical conclusion after having spent time in one.
In the US, maybe, but not in the world. Two sizes smaller, for sure. Every time I see a Venza I am mildly surprised that they exist, because it is such a reasonable (and fairly good looking) car.
The Escape has no reason to exist – the Bronco Sport is on the same platform, is starting to outsell it, and is a vastly better car – so replacing it with an EV makes as much sense as anything.
I did find it interesting that my non-enthusiast boyfriend went “wow the Escape sure is ugly, isn’t it?” kind of out of nowhere when we followed one in traffic the other day. A lot of the time on these websites we get a lot of “they’re for people who don’t care about driving…” followed by the idea that they actually are appealing for a segment of the population who just want an “appliance.” In that way, said boyfriend would be the target market, right? So if an Escape doesn’t appeal to us, and doesn’t appeal to people who regard driving as little more than a necessary evil, who is it for? The dustbin of history, apparently.
The writing on the wall for the Escape appeared after the Bronco Sport came out.
A few months back I saw an Escape with one of those flat tray style roof racks like you see on overlanding rigs (or people who coplay at overlanding). On an Escape….the only thing that would have made it better was if the donut spare was riding around up there.
I’ve said it before, but the Bronco Sport is what the third-gen Escape should have been. I’m amazed the Escape in its current form has lasted this long because every time I’ve been in one (even the Titanium trim) I’ve been underwhelmed.
That’s funny, I just noticed a new Escape the other day and thought, wow, they finally managed to make the Escape look decent. That poor thing has been an exercise in sadness since it launched.
Yeah … it doesn’t look exciting, but I don’t think it looks bad.
I don’t know; the Escape has a decent hybrid. It’s a reliable, cost-effective family car with great fuel economy. Go to a Toyota dealership right now and try to buy a RAV4 hybrid. You can’t. The salesman will tell you there’s a 12 – 24 month waitlist, but “if you’re lucky someone else will decide to pass when their order comes in, and those are offered first to people who are on our waitlist”. The Escape hybrid could capture a fair number of those sales.
As they retire the Escape, I really hope they add a hybrid option for the Bronco Sport. That’s a darned good drivetrain and it deserves to live on.
Ford can move full speed with EVs, only if they can make dealers sell them at normal prices. Who the hell would pay 10k over sticker when a rival car is sold online without markup?
Just change the name from Ford Motor Company to Ford Truck Company. Problem solved, Wall Street is sated, beatings will continue as usual until morale improves.
Perhaps I’m the only person who is sad about the complete decimation of the small commercial van in the US market. When Ford stops offering the TC, your cheapest van option will be the antiquated Chevy/GMC vans, starting north of $38k.
Elon should have known better than to make a Banner angry.
Shutting down the Escape gives more room for the BS and Maverick from the same platform, so that makes sense. I didn’t know the Edge was still a thing, so there’s that, and the Transit probably not a big seller here.
They could definitely use some cheaper models, like a Trax/Venue competitor. BS starts about $10k higher. Unless it’s all Maverick all the time.
Curiously with killing the Escape they kill their only cheap-ish PHEV.
The CUV market is sorting itself and I think in time, a lot of in-between sized cars are going to go away. The Edge fits that case.
I forgot the Ford Edge existed, NGL.
I had thought it was already discontinued, so hearing that it was on the chopping block was a surprise.
It’s been talked about for a while, the news was first out early last year but seemed to flip flop, as there are 2024 Edges on dealer lots now.
I had been tempted to look at one when I thought the 23s were the last of them. I might take a look at a 24, since I see my local dealer got a pile of them.
Probably don’t want one, but I don’t think I have ever actually driven one.
I’m reminded of them when I get rental cars.
I was certain it had been cancelled two years ago but I guess they pulled a Malibu and kept on building fleet models for a while.
My Mom just started leasing one. It’s a realistic-sized car with a big hatch for her to throw Costco stuff in, all-wheel-drive for those January drives to the northern Michigan school where she teaches, and a decent sized back seat for her dog. It’s perfectly cromulent, but the center stack is the dumbest touchscreen conversion I have ever seen.
TIL there is such a thing as a Ford Edge
You know Ford HATES when you remind them they make shit other than the F150.
Farley has Toyota on his resume, but he seems to have learned absolutely NOTHING from his time there.
Why can’t he get laid-off Toyota employees on his team? Or perhaps he could poach Toyota’s contractors and have them work for Ford instead. He could even advertise “why be a temp or contractor when you can be a full-time employee?” He could also poach from Honda.
Here’s another way Ford can increase their quality:
https://opposite-lock.com/topic/82268/how-ford-can-fix-their-quality-issues/1
If Ford chooses to ditch market segments for competition to fill up, I fail to see how that’s anybody’s problem but Ford’s.
I never thought he knew much when he was there, after I saw this quote in the NYT soon after the Scion xA and xB were released: “‘We thought xA would outsell xB 2 to 1,” said Jim Farley, Scion vice president.
Why, exactly? A close friend of mine had the chance to drive a 2nd generation JDM Nissan Cube around southern California previous to the debut of Scion. (He worked for Nissan, who must have been able to get some special manufacturer’s dispensation from the 25-year rule.)
He and his cohort were mobbed wherever they took it (his words, not mine: “…a chick magnet”). That is all the market research anyone needed to know that the xB would be a hit.
Don’t forget also that Scion was the yoof marque and the xB sold mainly to the elderly who liked the low floor and upright seating that doesn’t require a study in ergonomics to see why.
I suppose it’s what is in the cards for every manufacturer, but dropping the Escape seems soon considering even say VW, who does have EVs, has another Tiguan in the works.
Badged as the Kuga in Europe, it was a top 10 seller in Germany last year, although the smaller Puma does better in other countries (#1 in the UK so far this year). And of course they they are lower volume markets compared to here. Could mean for freer parts availability for both Mavericks and Bronco Sports for buyers that don’t leap to the EV yet.
Don’t get me wrong, I freaking hate Tesla’s “autopilot” and think they should be forced to change the name at minimum, but
“Autopilot failed to brake, steer or do anything to avoid the collision”
this statement fails to take into account a massive detail… So did the freaking driver! Like sure, autopilot should have been able to see it, but come on. I am not one to speak ill of the dead, but the dude had to have been paying absolutely no attention to the road whatsoever for this to have happened, and that’s not on Tesla. The other one absolutely sounds like it is, but this is ridiculous. Wasn’t this the one where the guy had hacked the system and was watching a movie or something on the screen?
As enthusiasts, we tend to think more on the side of nuance in the automotive area. We all know “Autopilot” is a stupid name for the suite of things it does. However, not all people think that way, and there are many, many people who hear “Autopilot” and assume, even with being given a walkthrough, that it really is an autopilot that will take them where they need to go practically from start to finish. Think of them more like Homer Simpson.
It will be fascinating to see what happens if Tesla is held accountable for these crashes. Will it only affect Tesla, or will there be far reaching consequences for the rest of the industry? It will be business as usual if Tesla wiggles its way out of the charges, either through trial, or settlement.
Disagree. If that were true, then there would be TONS of accidents with new Autopilot users, but the high profile ones have primarily been with experienced users: The guy who drove under a semi while watching Harry Potter. The guy who knew his Model X had an issue at the same spot in his commute every day, but was playing on his phone anyway, etc.
The bigger issue is complacency after using it for a while and it SEEMS like it’s really good, not new owners assuming they don’t have to pay attention just because of the name.
Don’t forget the chowderheads going for viral fame, fortune, and likes by filming themselves riding in the back seat with nobody behind the wheel, because Autopilot.
I agree the driver is ALSO at fault. But the driver already paid the price. Tesla should also pay (for its ridiculously false advertising).
I’m torn on that one. I feel like they make it very clear that the driver is supposed to maintain awareness of what’s going on. I agree they are false advertising, but I feel like this one may not be on them. But that is a good point.
Everyone knows that Auto Pilot does not see palm trees.
Or semi trucks.
This is common knowledge.
“If you know this shit, then you must acquit.”
The term ‘autopilot’ is accurate. It does almost exactly what an aeronautical (and nautical) autopilot does: keep a steady course, and relieve the pilot and copilot of continual adjustments to throttle and heading.
Another plane on the radar? That’s not autopilot’s job. Coming in to land? Taxiing to airway? Not autopilot.
The big problems are that automotive autopilot is in an entirely different domain of risk, and that the common perception of aeronautical autopilot is grossly overestimated.
There are 3 things that matter to modern corporations – stock price, stock price, stock price.
Musk transformed the landscape by creating the worlds largest meme stock. EV believers bought the cars and propped up the stock even when things were not going well. A small percentage of strong supporters pushing the stock changed a huge 100 year old industry in only 10 years. Profit and loss, sales volume, customer satisfaction are no longer the prime considerations of automaker management because those fundamentals have become disconnected from the stock price.
As long as they are getting a share price boost, automakers will move toward EVs.
Fake it till you make it.
That’s what Tesla did but everyone knew they were doing it and no one was sure if they would make it. The true believers kept propping up the stock even when by traditional metrics it was a no-brainer short. (which it still is)
At this point I wouldn’t go anywhere near Tesla stock. It’s crazy over-valued and will almost certainly crash at some point (much like Autopilot-controlled cars), but it’s been that way for so long that I wouldn’t even consider shorting it either. You’re straight up gambling on when investors are going to figure out they were sold something that only exists in Musk’s imagination.
Or, just as common these days, fake it until you prop the price up enough that you can dump your stake for a tidy profit.
Well, I mean, it isn’t like Ford has a choice, do they? ICE car sales will be completely prohibited within the next 7-12 years, so it’s either go all-in on EVs or go out of business in about a decade. I know institutional investors only look at 3 months at a time, but they kind of have to suck it up on losses for the time being
As far as VinFast, only a very, very tiny fraction of their shares even trade on the open market, so it doesn’t take a lot of activity to generate crazy swings one way or the other
“ICE car sales will be completely prohibited within the next 7-12 years…”
If that’s how things play out, it’s a good time to buy stock in shoe companies, because a lot of us are going to be walking to work. Or biking. Or ride sharing. Or public transit. Or donkey and carting.
Buy stock in parts companies and repair facilities as well, because lots of people are going to be keeping older vehicles on the road as long as they possibly can.
True point. We’re going to end up looking like a bizarre dystopian landscape, Cuba crossed with Blade Runner.
/looks up Dorman, Beck Arnley, and Federal-Mogul stocks to buy…
Honestly, the Prius is over 20 years old, and the drivetrain has proven extremely reliable. There’s little excuse for all cars to not be at least Hybrid-ICE today, much less in 7-12 years. The only issue in my mind is that OEMs really should settle on a small number of standardized battery sizes/form-factors (like they did for 12v batteries), to make it easier to replace/upgrade in the future.
Yeah, I would love to short the crap out of VinFast, but as you say the float is extremely tiny and controlled entirely by the CEO, so not touching that with a 10 foot pole.
Oh, I very, very much doubt ICE will be banned in most parts of the world in that timeframe. A couple examples does not a universality make.
The earliest “ban” in the US is California in 2035, and even then the “ban” allows for some Plug-in Hybrids.
I think Ford is making a huge mistake. Mavericks are selling like hot cakes from my understanding. Americans want smaller, affordable cars. With Ford axing everything from the bottom up, they’ve set themselves up to have no entry level vehicles.
I’d love to see the Puma make it’s way over here to the states. It’s still a cross-over, but it’s small, and affordable. Plus if they’d give us the hybrid with a stick I’d be so happy.. I know that won’t happen.
Isn’t the Puma basically the same as the EcoSport?
No, same size but a vastly better vehicle. The Puma is on par with the Escape in terms of quality, the EcoSport was a Brazilian bargain basement job.
Fair enough. I think I was getting confused with the Kuga/Escape being the same thing. It’s crazy to me that Ford has 2 totally different crossovers both based on the Fiesta platform. The Puma looks 100x better too!
Puma uses the Fiesta platform (B-car platform), but Kuga/Escape uses the Focus platform (C2 platform). Also tangentially related, although now discontinued, was the Ford C-Max (also Focus platform). It wasn’t classified as a “crossover”, but mine has some aftermarket spacers and bigger tires, increasing ground-clearance to equal it’s platform sibling Escape.
–Edit: Nevermind, I now understand you meant that Puma & EcoSport are both Fiesta platform, not the Kuga/Escape.
Mavericks are selling like hotcakes but are they making profit margin on them even after raising the price? It takes almost as much work to create and sell a Maverick to make $3000 than it does to make an F-150 that generates $6000. (my made up but probably reasonable numbers)
Your point is correct, but if anything, you’re underselling it.
Given economies of scale on the F-150, it’s probably a much more drastic difference in profit per unit (I’d be very surprised if they were making anything close to $3000 per Maverick).
I know this is the right answer, but it still doesn’t make sense to me.
Someone looking for a $20k car, that might buy a Ford won’t see that there isn’t an option and jump immediately to the $30k Bronco Sport or the $35-$40k for the F-150. They’ll look to other brands, or the used market, of which Ford sees a $0 margin.
Well it makes sense to concentrate on high margin products :
if Ford is limited in manufacturing resources, parts, or capitalif they have not reached the limit on high margin product salesif the product is not strategic in some other way (like EVs for example) Of course, entry level products that lead to a lifetime of Ford purchases could be strategic.It also makes sense from a return on capital metric. Investors really care about the profit margin on product. That is why Tesla’s stock took a hit when their profit margin fell below 20% and moved closer to other car companies. Why even bother making a vehicle where you can only get a 5% return on capital? You could use that money for something else and get a better return.
Ford should offer a non-hybrid non-turbo FWD Maverick. Maybe it would have the basic 2.5 but without the hybrid, or they could use the NA 2.0 from the Focus we don’t get anymore.
+1
My predicted future Ford lineup:
Ēscape
Ēxplorer
Ēxpedition Lightning
Mustang Mach E
Mustang
Bronco Sport E
Bronco Lightning
Maverick Lightning
F-TeenThousand Lightning ProMax Tremor
Ranger Lightning
You missed a couple:
Ranger Lightning Limited Lariat Ranch PLATINUM
Maverick Hybrid Raptor Limited PLATINUM
Don’t forget the Ranger and Maverick Lightning Limited Lariat King Ranch Platinum Harley Davidson models.
And the dually variants.
I don’t really know what to think of manufacturers that are all in on EVs right now. I think our current situation has shown pretty unequivocally that regulations have put the cart before the horse when it comes to BEVs. They’re too expensive, there isn’t enough infrastructure, and outside of early adapters who (often naively) think that they’re doing the noble thing by going BEV or are intrigued by the technological showcases that the vehicles are, there isn’t really a market for them anymore…and more $60,000+ electric crossovers isn’t going to change that.
I’ve long made it clear that my stance is that our finite battery resources would be better served by hybridizing all the things right now while BEVs are still developing and remain a niche product. We need time to adjust, develop the technology further, and build up the infrastructure. Traditional and plug in hybrids reduce emissions drastically right now and don’t really require any compromises.
That being said, if I was in charge I’d still be pretty EV focused when it comes to the long game. Unless regulations change dramatically over the next few years governments are forcing everyone into EVs in the next decade. As I’ve said a few times, to me it’s a dog and pony show/culture war red meat and little else. Personal vehicles are drops in the bucket when it comes to carbon emissions, and if governments actually cared they’d be going after corporations and the 1%, who are essentially one and the same and pollute more than the rest of us combined.
But why do that when you can blame normal people and guilt trip/regulate everyone into EVs? Unless anything changes Ford, GM, Hyundai/Kia, etc are smart to have eggs in this basket. I just wish they’d focus more on electrifying what we already have rather than making BEVs. They just aren’t ready yet, and that’s fine. Give us stuff that can make a sizable difference today instead.
If Ford came up with a long-range EV with a small battery, that used its platform efficiency to get its range instead of a monster battery pack, they could keep the cost of the vehicle down and be prepared in the event that tastes change toward less expensive vehicles. Instead, they aren’t even producing cars anymore for the US market, aside from the Mustang.
The modern auto industry has become so conservative that it could become what ends them.
Regarding your comment on being in on EVs for the long game:
I really would like to see a cost comparison on how much R&D for new platforms etc could cost if they really did it right vs how much all of the recalls are costing.
Could they conceivably build out a fleet of PHEVs with maybe a few higher end experimental EVs while continuing the R&D for the future at a lower cost than all the problem fixing and recalls?
It just feels like they’re asking everyone to be part of their experiments on the road while also saying, “you need to not only help us test these brand new things but also pay a price premium for the privilege of it.”
I think that’s the point, though. PHEVs should be where the focus is until BEVs mature more. Currently, the government and pop-culture are on board to push BEVs as the solution to the whole climate problem, which is a huge mistake. We should be heading that way as quickly as we can, but only heading that way with blinders on is going to be a huge mistake.
The federal tax credit of $7500 is available for Plug-in Hybrids, just like BEVs.
The most famous upcoming “ban”, California’s, doesn’t take effect until 2035, and even then it allows for some Plug-in Hybrids.
The EPA’s new rules are going to fast track much of what CA has started, but for the whole country. It’s obviously not set in stone, especially if a GOP candidate wins the next presidential election, but if Biden gets the nod again next year, it’s going to be a tough slog for anyone to change those targets.
And when was the last time you saw an automaker push PHEVs over BEVs? Mazda, who is infamously behind the 8-ball when it comes to modernization? Everyone loves Mazda, and loves to pick on them for efforts like the MX-30. Ford, GM, VW, and most other major manufacturers are pushing full speed into BEVs, as evidenced by this Morning Dump’s headline.
There’s a lot of “blame” to go around on this subject; perhaps the better way to say it would be the government and the automotive industry are on board to push BEVs as the solution to the climate problem. The government gets a pat on the back for being active on the climate, and the automakers can both play along as well as profit. Win-Win-Win from a PR standpoint.
My point is that the government is still very much supporting PHEVs. Tax credits are the same, and they’re allowed even in California’s not-actually-a-gas-ban.
Clearly, BEVs are the headliners, but probably moreso because it’s easier to just talk about “EVs”, than to talk through the nuance of PHEVs in soundbite news that dominates, now.
It’s a common belief and commonly claimed that BEVs have far more subsidies and support and that the government should be supporting PHEVs and we shouldn’t ban them, and the reality is that the government is giving PHEVs the same tax credits and the “bans” don’t ban PHEVs.
PHEVs are great. They should be a BIGGER portion of the discussion, IMO, but the prevailing narrative is incorrect. The problem isn’t that they don’t get the same tax credits or that they’re being banned.
I don’t know exactly what the reasons are that they’re not as popular of a solution, but the prevailing narrative is misleading.
At least for the US, refining and burning fuel for personal (light duty) road transport adds up to 21% of our nation’s GHG emissions. If you had a five-gallon bucket, that “drop” would be about the size of a football.
In the game of “responsibility hot potato,” I think we can agree that these emissions are ultimately the fault of the oil and automotive corporations, who lobbied for climate denial, influenced city design, and smothered alternative transport methods. But then, wouldn’t it make sense to make regulations that force the automotive industry to develop alternative fuel vehicles, even at great cost to themselves?
I am quite certain the automotive industrial complex will try its best to pass the cost on to consumers and spread propaganda claiming the regulations are designed to punish consumers. They always do, and people always fall for it.
Love the comparison of emissions to the 5 gallon bucket. I had to pause reading Nsane’s comment because I, too, wanted to know where we stood on the personal vehicle emissions front. I stopped a little earlier than you, but have only emissions from light duty vehicles in the US at just shy of 17% of the US’s total GHG emissions.
I also agree that there has been too much emphasis put on the research that has been done pre-aughts, that “proves” global warming/climate change is a hoax. Follow the money, and it’s easy to understand those conclusions.
The base Lightning ($50,000 – $7500 tax credit) is cheaper than the cheapest, slowest, zero-option gas F-150 Supercrew 4×4 ($45,000). I was surprised by the pricing for gas F-150s, but $50k for a base Lightning is very competitive with similar gas trucks.
For everybody to have an EV? No. For every possible use case? No. But does it work for many use cases already? Yeah. I’ve done three 1,000+ mile trips already in my Lightning. One of those trips was starting in the rural midwest in December and driving halfway across the country (1,400 miles). No notable issues.
Lifetime emissions are lower for EVs, according to several studies. Higher manufacturing emissions, but far lower operational emissions result in lower lifetime emissions.
Some EVs are still selling VERY well. Model Y is selling better than ANY car, SUV, or crossover in the US this year. The Mach E market is softening because it’s just plain uncompetitive with the Model Y right now. It used to be cheaper than the Model Y, which offset the worse charging network and slower charging, but now it’s substantially MORE expensive, but still has major charging issues, in comparison. No surprise it’s languishing.
That being said, EVs aren’t for everyone. There are some use cases that EVs are obviously superior. Some where gas/diesel is obviously superior, and then a bunch of use cases where either one works and people have to weigh the pros and cons.
I agree with you that it makes sense to be working toward EVs at this point. The questions are: How fast will EVs take over a huge chunk of the market, so how fast should we transition? It’s not a question of whether EVs are going to be a big part of the future anymore, so it would be crazy not to be working on them at this point.
Is anybody else bothered by the fact that Shawn Fain’s name sounds awfully close to Sinn Fein? They weren’t easy to bargain with either.
Yes, I keep making that connection, too. When I was a kid, the neighbor upstairs from us had a bunch of IRA tattoos and posters in his apartment.
There’s an IRA reference in the new guy somewhere, too 😉
“Yes, Ford is set to lose $4.5 billion more this year than expected on EV and battery production.”
I would like to hear some context about the losses related to EV and battery production. Are these losses part of a detailed plan to turn a profit on EVs in the future (i.e. an investment in future products)? Or is this a situation where they suck at building EVs and are throwing good money at bad ideas trying to get something to work?
Obviously, $4.5 billion is a lot of money to lose, but Ford is still profitable overall. As long as Ford has a reasonable plan to make EVs profitable in the future, I think this is absolutely the right thing to do. Ford should make the investment in EVs (and take the losses) while they still can make large profits selling ICE trucks.
I think that Ford dropping the “small commercial van” market is disappointing, but from a non-car-person business analyst perspective, I can see why they would do that, vis-a-vis the chicken tax. It just seems like a useful market segment that is woefully underserved, but could really benefit from electrification. I also think that sedans and wagons make more sense as EVs than SUVs and CUVs, and I think the manufacturers should be trying to move the market that way. But that’s just what doesn’t happen when car companies are run on quarterly profits and controlled by the marketing and accounting departments.
Ford could’ve always done the CKD thing, too. Mercedes does this with the Sprinter and Metris*. Passenger versions are imported straight from Germany.
*also going the way of the Transit Connect after this year
They were planning to make a new TC in Mexico, but they abandoned that plan at the last minute.
Fords future strategy is basically all trucks/SUVs/CUVs. I predict this will backfire spectacularly. Fads come and go, and we’re just one energy crisis or financial crisis away from the current zeitgeist being upended, and Ford is all-in on it.
To be fair, there is not much separating CUVs from traditional sedans. The new Escape is a slightly taller Focus wagon. Even the Explorer isn’t very truck-like at this point. Ford might have technically stopped selling sedans, but their new SUVs and CUVs are basically tall sedans with a bit of marketing spin.
And noticeably worse gas mileage. You can get 40mpg in a civic without even going hybrid, you can’t get that out of an escape. They have come a long way, but it’s still a noticeable difference.
A Civic is going to get better MPG, but I’m not sure it matters that much to most buyers. Going from 40 to 30 mpg burns an extra 125 gallons per year (assuming 15,000 miles). While that is non-trivial, I doubt buyers who prefer a CUV over a small car would consider the extra $500 in gas to be a deal breaker.
30 v 40 mpg does, however, matter to Mother Earth (on which we live). Gas is objectively too cheap if gas mileage is #26 on people’s list of concerns when buying a new car.
Compared to a traditional sedan or hatchback, it’s extra drag and extra frontal area, with more mass, more material usage, for no increase in utility(at least compared to a hatchback), and often a decrease in usable passenger space, and more cost to go with it. It’s all about the profit margins with these companies…
Yet they sell. CUVs must be doing SOMETHING right.
Yes, they emphasize things that enthusiasts don’t value, but most normal people do (ease of entry/exit, ease of loading kids and cargo, ride height, AWD availability), while deemphasizing at-the-limit handling, which no one values besides people who comment on auto sites.
Now that hybrids are mainstream, fuel economy considerations for larger vehicles are much less drastic, meaning the trend away from lower, smaller cars will only accelerate IMO.
I don’t care about on-the-limit handling; my dream is a Daihatsu Pyzar/Gran Move – a tallish, station wagon-y creation without the weight of four-wheel drive and without any “rugged” offroad fakery.
I’m afraid you’ll have to explain to me how that vehicle is appreciably different from a Chevy Trax or similar subcompact CUV sold by every mainstream automaker, all of which come in FWD.
In any case, no matter your answer, I’m pretty confident in stating that it’s not going to be a widely shared preference.
Definitely not a shared preference, Daihatsu had a hard time selling these even in Japan and Europe. 18 inches shorter than the current Trax, 7 inches narrower, and much much larger on the inside. I am aware that a chunk of that is the result of more crash protection and stuff, but still. It has large glazed areas so that you can see out of it. And it’s fully beddable!
https://www.cars-directory.net/pics/daihatsu/pyzar/1998/daihatsu_pyzar_a1212671137b1772725_orig.jpg
Minivans do all that even better yet minivans are shunned so it’s clearly something else.
Never have said or will say that consumers are perfectly rational.
There are certainly other reasons (of varying degrees of rationality) why someone might prefer a CUV to a van, but since the original post was about sedans and hatchbacks, advantages vs those vehicles were my focus.
Well if logic and rational thought had its way the world would be a very different and IMO much better place.
I think all Trucks/SUVs/CUVs can work in an EV world.
Why?
Because EVs substantially shrink one of the reasons for going with cars or smaller vehicles in general: The cost of fuel.
An example:
Electricity: $0.17/kWh (national avg)
Gas: $3.82/gal (national avg)
14,500 miles/year (national avg)
Gas truck: 22mpg
Gas sedan: 33mpg
EV truck: 2.0 mi/kWh
EV sedan: 3.5 mi/kWh
Gas truck: 14,500 / 22 * 3.82 /12 = $210/mo
Gas sedan: 14,500 / 33 * 3.82 /12 = $140/mo
EV truck: 14,500 / 2.1 * 0.17 /12 = $98/mo
EV sedan: 14,500 / 3.3 * 0.17 /12 = $59/mo
So, now, the cost to fuel a Lightning is substantially less than to fuel an Accord. And the difference between fuel cost on an EV truck vs an EV sedan is substantially smaller.
When EVs are competitively priced (some now, more in the future), there’s one less barrier to people buying them.
I think EVs will mean vehicles are bigger, not smaller, and brands that have experience building big vehicles and have brand cache with big vehicles will do well, IMO.
You must consider the per-mile cost of that battery pack, and also a replacement. For a number of EVs on the market, it will not work out favorably. For many, it will. This will vary from vehicle to vehicle. It will also vary depending upon how the vehicle was used. Lots of deep discharges coupled with use of fast charge stations will result in greatly shortened battery life for some battery types, but not for others. Some batteries degrade more quickly when used in the cold weather, than do others.
For many of these EV trucks coming onto the market, I would not be in the least bit surprised if the cost-per-mile of the battery pack exceeded $0.10/mile. Which in turn could quickly negate the savings, or worse, cost the operator more than using an ICE.
A simple, small, aerodynamically streamlined car built to use a small LiFePO4 pack will fare the best from a cost per mile operating standpoint, but no one is making that car for the U.S. market. The Tesla Model 3 is about as close as it gets. The operating cost of a Tesla’s battery is all over the place, with some horror stories, but also lots of success stories where operators have gotten 500k miles out of their pack as well.
That’s not really a new thing for EVs. You have to consider reliability when considering gas cars, too. The likelihood of a GT350 having engine issues and the costs associated with that likely make that a risky proposition.
But when you’re saving $100/mo and the initial cost is similar (F-150 Pro vs F-150 gas XL), and the warranty lasts 8 years, that’s a $10k difference, even if it dies right out of the warranty period, which is very unlikely. Weighing the likelihood of a battery *replacement* vs engine/trans issues is likely a couple thousand difference (as far as likelihood times cost differential), if that, so most people are going to come out ahead.
It would be nice when considering a used EV to purchase to get a complete history of the battery charges and discharges.
I don’t think Ford has any choice but to pursue EVs, that’s where the regs are heading. Unless we see a change in regs that will benefit hybrids, everyone is going to head that way. Gas-only is going away for everybody soon either way.
Ford doesn’t need an EV Edge because they already have the Mach-e, which is exactly that.
I find the Bronco Sport/ Escape thing funny, because it wasn’t that long ago that the Escape was very close in styling to the BS.
I don’t think it’s any coincidence that GM and Ford are diving into EVs more than most; as long as they have truck profits to backstop their huge losses in electrics, the stakes aren’t existential like they are for some others.
I personally don’t think they are doing the right thing, but in a very real sense, the path is being chosen for them by regulations and laws. A model line under development now is still going to be on sale in 2035 when bans start taking effect. And while I think and hope that some of the most aggressive ones will be scaled back, the automakers have to play for the worst case scenario.
So as a Ford customer, I don’t think this is the best path, but if I were a Ford stockholder, I’d grudgingly admit that it’s probably the best they can do barring some huge reversals in political fortunes.
I’ve felt the same way about Ford for awhile now – I love its sedans/coupes and am resolutely NOT a truck guy, but I get that it’s listening to the market. I guess I’m just sad my tastes are not in line with it.
It’s funny how we still expect automakers to make a little bit of everything like it’s the 1960s, rather than specialize/pursue their particular advantages like most other firms do these days.
This is very much an MBA-driven mindset (core competencies).
It’s fantastic for making profits, not always best for getting interesting or varied products.
Even though I’m a satisfied Ford truck customer, I also wish they felt able to sell a wider variety of offerings as well. Not to mention more gas vehicles. But again, I can’t fault them much for what they do given the regulatory climate they need to navigate.
And despite what Silicon Valley might tell investors, it takes about 8 years or 3 generations of product to build up the tooling, techniques, stable suppliers, and most importantly the talent and tribal knowledge necessary to produce EVs/PHEVs/HFCVs at scale without sacrificing cost-competitiveness or quality.
In order to make EVs, you must first learn how not to make EVs.