Ford hits the brakes on $12 billion in EV spending in KY

[dbsb3233]

This is the critical inflection point where Chinese manufacturers flood the world market with compelling EVs at low pricepoints, making it impossible for legacy US manufacturers to compete when they finally decide to scramble to regain lost market share. This is how Japan nearly destroyed the US big 3 in the '70s-'80s. History repeats itself. So fiddling back on EVs by Ford and GM is good for short term returns, but disastrous for long term prospects. Unfortunately our system is geared to tactical gains over strategic ones.

And the Big 3 don't have nearly as much US market share to lose as they did back then. They've been been bleeding it away for 50 years.

China branding is gonna have a problem gaining a lot of market share in the US though, especially since COVID.

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[woody]

The (solid state) battery technology has existed for a long time.
Unfortunately, automobile manufacturers, other than Toyota, have not invested in it and therefor the solid state battery has not been produced/manufactured. The solid state technology in this country has been bought up by entities whose interest is in preventing solid state availability.
Toyota (still laughing at us) is not as subject to outside influence/control. They invested in the in solid state technology and will be selling solid state BEVs soon (somewhere in 2024 - 2027).
Toyota is notoriously deliberate and slow, but this philosophy has served them well (ex.: Prius).
This could give the US automobile companies a window, but they would most likely have to work together in order to fight COGU and invest some of those $billions logically. And this is probably not going to happen.
That leaves the Japanese and Chinese (they steal everything, so solid state tech. would be no problem for them) with the winning hands.
The batteries currently in BEVs on the road was old tech. before they were manufactured. As early adopters, some of us saw an opportunity to to get the ball rolling with our purchases and hopefully the industry would catch up with the technology.

Station wagons worked just fine for decades. Then along came mini vans. Then the MSV (ska. an SUV) as a "truck". Now you can no longer buy a pick-up truck (sorry, but those open air trunk SUV things are not trucks). If you are a working stiff, you are forced to purchase a panel van (Ford has sold thousands of them for decades in Europe).

Point being: it is possible.

 

[Mirak]

Li-ion isn’t “obsolete,” but we’ve pretty much maxed out its capabilities for EVs, and the power / weight / charging it provides just isn’t good enough for most consumers.

Ford is wise not to pour billions into producing these batteries. Maintain a presence in the EV space with the MME and Lightning, roll out a hybrid or two, and wait for a better battery to arrive. I know I’m oversimplifying, but that’s the long and short of it.

Silver lining: my 2021 MME still hasn’t been dethroned in terms of value, and likely won’t be for a loooong time.

 

[RKinWA]

Here's another take on the same story:
https://www.wdrb.com/news/business/...cle_40ff1e9e-7449-11ee-b0e2-f7ec41a405ef.html

LOUISVILLE, Ky. (WDRB) — Ford Motor Co. is delaying start of production at one of its two side-by-side electric vehicle battery plants in Hardin County, Kentucky, Ford executives told Wall Street analysts on Thursday.

The company is stretching out $12 billion of planned EV investments, including the delayed Kentucky plant, amid uncertainty about demand for EVs.

The dual plants in Glendale, Ky. are each projected to employ 2,500 workers. BlueOval SK, Ford's joint venture with Korean partner SK On, has begun hiring for the first plant, which is still on track to start production in 2025.

The second plant, known as Kentucky 2, was originally scheduled to come online in 2026, but now Ford and SK On have no projected start of work at the second plant.

"Demand for electric vehicles continues to increase in the U.S. but not at levels anticipated. To meet demand and ensure our success, BlueOval SK Battery Park in Kentucky will postpone production at its second plant, known as Kentucky 2," said Ursula Madden, BlueOval SK external affairs director, in an emailed statement.

Madden said BlueOval SK will continue building Kentucky 2 "to ensure the construction site is safe."

"Our ultimate goals have not changed, but the time to reach those goals has been revised," Madden said.

The announcement does not affect the BlueOval SK plant underway in Stanton, Tenn. Like its Kentucky counterpart, the Tennessee plant remains on track to start production in 2025.

Ford CEO Jim Farley said on the company’s earnings call that Ford is still committed to electric vehicles and will make significant progress with its second- and third-generation EVs that will come to the market in the next several years.

The company currently sells three all-electric models, which it calls the "first generation" of its EV business. Those are the Mustang Mach-E, F-150 Lightning pickup and E-Transit work van.

With the future generations of EVs, "We have a totally different approach," that will improve sales and profits, Farley said.

Ford recently backed off its previously communicated targets for EVs, saying it is unsure when it will reach a goal of producing 2 million EVs annually.

I just saw this video today.

Had I not bought my MME when I did, and was watching the market right now, I would probably have waited to get into EV ownership, which is sad, as I really love my MME and have no regrets buying it. A lot of it stems from the constant price drops (who wants to buy a vehicle that drops $20k in 3 months (not value, actual sale price)), and more importantly, the state of the non-Tesla charging network. Many of my friends that were considering making the jump are now waiting for both those reasons; i.e. let's see how low they go, and in 2025 when most can directly use the Tesla charging network, it will be worth it. I don't agree with the second sentiment but hard to argue with the first. I'm sure it's just a momentary pause, and in 2025 things will pick up dramatically.

 

[Mach1E]

Tesla has open the door and shown what an advantage direct sales and vertical integration is to BEVs. I don’t think traditional oems can catch up due to all the legacy constraints.

legacy oems will have to completely separate their ev division. Essentially starting a new company to compete.

the competition in the ev space will come from nio, rivian, and other startups.

Ford already did separate the EV division.

But that’s probably more so that they can shut down whichever division fails in the future and it doesn’t take the whole company with it.

 

[dbsb3233]

Tesla has open the door and shown what an advantage direct sales and vertical integration is to BEVs. I don’t think traditional oems can catch up due to all the legacy constraints.

That's part of it, but so is time and volume. The economics of EVs were crap for Tesla for over a decade too. But they managed to hang on long enough to make it to profitability.

Legacy is quite profitable on the vehicles they've perfected at scale for decades (ICE), but are still early in that curve for EVs.

 

[0CO2]

And the Big 3 don't have nearly as much US market share to lose as they did back then. They've been been bleeding it away for 50 years.

China branding is gonna have a problem gaining a lot of market share in the US though, especially since COVID.

True about negative optics of China branding. How many customers understand that Volvo id no longer really Swedish, but part of Geely? And so it goes...

 

[dbsb3233]

True about negative optics of China branding. How many customers understand that Volvo id no longer really Swedish, but part of Geely? And so it goes...

Yep, that's probably how they'll have to do it -- rebrand with a different name here. Partnering with a Western manufacturer (like Western automakers are often required to do to sell inside China), or at least using a brand name that sounds Western in hopes they fool people.

Buyers don't care much about a $7 child's toy being made in China, but a $50,000 car is far more visible and personal. And a point of pride for many. Sometimes even patriotism.

 

[Mach1E]

I almost felt bad that Ford is losing all this money when I bought my Mach E this week.

"Ford lost an estimated $36,000 on each of the 36,000 electric vehicles it delivered to dealers in the quarter - even more than its estimated $32,350 loss per EV in the second quarter."

https://www.reuters.com/business/autos-transportation/ford-withdraws-2023-forecast-warns-ev-results-2023-10-26/#:~:text=Ford lost an estimated $36,000,EV in the second quarter.

Then I remembered that they jacked the dealer jacked my 2022 F350 $5,000 above the MSRP.

Ford doesn’t own your dealership.

In your situation, Ford loses money.

Dealer makes money.

 

[Mach1E]

I do fault Ford for the wink-wink relationship over the MSRP jacking. It was $10k over MSRP, but I negotiated it down $5k. They should have actually been punishing the dealers instead of the "we frown on this" party line. I did give the dealer a 1 out of 5 rating on their survey for it. They tried to bribe me with a free tank of fuel to give them a 5 on the follow-up survey. I gave them another 1, and reported the bribe attempt.

There is no wink wink. Ford is trying hard to shut that nonsense down and is punishing dealers who do it.

Ford ain’t perfect, but in this case it’s clearly your local dealer who is 100% at fault.

Ford makes zero extra dollars when dealers add ADM and it just results in unhappy customers. Ford is on your side against dealer ADM. They have been quite vocal about it too.

 

[dbsb3233]

There is no wink wink. Ford is trying hard to shut that nonsense down and is punishing dealers who do it.

Ford ain’t perfect, but in this case it’s clearly your local dealer who is 100% at fault.

Ford makes zero extra dollars when dealers add ADM and it just results in unhappy customers. Ford is on your side against dealer ADM. They have been quite vocal about it too.

And it's not really even "fault". The dealership is the retailer. Like any retailer, it's their job to get as much as they can out of a sale, just like it's the job of buyers to pay as little as they can in a sale. Market price is where those two meet.

If dealers are consistently making sales above MSRP, it means the manufacturer didn't set the MSRP high enough. Ford doesn't like ADM because it means they screwed up and set the MSRP too low, and they're leaving money on the table that the market is willing to pay.

 

[Billyk24]

The (solid state) battery technology has existed for a long time.
Unfortunately, automobile manufacturers, other than Toyota, have not invested in it and therefor the solid state battery has not been produced/manufactured. The solid state technology in this country has been bought up by entities whose interest is in preventing solid state availability.
Toyota (still laughing at us) is not as subject to outside influence/control. They invested in the in solid state technology and will be selling solid state BEVs soon (somewhere in 2024 - 2027).
Toyota is notoriously deliberate and slow, but this philosophy has served them well (ex.: Prius).
This could give the US automobile companies a window, but they would most likely have to work together in order to fight COGU and invest some of those $billions logically. And this is probably not going to happen.
That leaves the Japanese and Chinese (they steal everything, so solid state tech. would be no problem for them) with the winning hands.
The batteries currently in BEVs on the road was old tech. before they were manufactured. As early adopters, some of us saw an opportunity to to get the ball rolling with our purchases and hopefully the industry would catch up with the technology.

Station wagons worked just fine for decades. Then along came mini vans. Then the MSV (ska. an SUV) as a "truck". Now you can no longer buy a pick-up truck (sorry, but those open air trunk SUV things are not trucks). If you are a working stiff, you are forced to purchase a panel van (Ford has sold thousands of them for decades in Europe).

Point being: it is possible.

Ford has invested into solid state batteries via multi million dollar infusion into an usa company. VW is currently testing QS solid state batteries. These solid state batteries are suppose to be less weight, smaller size, more energy dense, faster charging and tolerate greater number of charge discharge cycles. A brighter future could be possible for all of us. Many components for this pucture that also need improvement.

 

[Mach1E]

Ford has invested into solid state batteries via multi million dollar infusion into an usa company. VW is currently testing QS solid state batteries. These solid state batteries are suppose to be less weight, smaller size, more energy dense, faster charging and tolerate greater number of charge discharge cycles. A brighter future could be possible for all of us. Many components for this pucture that also need improvement.

Well, for solid state those things are mostly “hopes and wishes” still at this point.

As far as we know, zero people on the planet have built a solid state battery large enough and cheap enough and reliable enough to power a car. Not even at the working prototype level, yet billions of dollars are chasing this dream.

In my opinion, the target for all these numbers is about 50%.

Half the weight
Half the price
Half the charging time

I just don’t know that any of those are possible, let alone all 3 at once.

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