Golfer

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https://electrek.co/2022/11/15/ford-ceo-looks-in-house-to-build-ev-components/

Ford is returning to its roots as it looks to keep employees on board during the transition to electric vehicles. Jim Farley, Ford’s CEO, spoke at an event in Detroit, telling reporters Ford is “going back to our model A” in reference to bringing production back in-house during the EV production ramp.

Ford CEO looks in-house to build EV components

On the idea of going back to where Ford started by sourcing its own vehicle components, the CEO says:
We’re going back to where we were at the beginning of the century. Why? Because that’s where the value creation is. It’s a huge transformation.
Up until now, Ford has purchased EV batteries and motors for models like the Mustang Mach-E, but this will no longer be the case, according to Farley.

Rest of article: https://electrek.co/2022/11/15/ford-ceo-looks-in-house-to-build-ev-components/

 

RickMachE

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Given what they're building in Kentucky, which is old news, this is simply a clickbait article.
 

RWG

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Vertical manufacturing integration was the business model in the "old days". Over time many manufacturers switched to Just In Time ( JIT) i.e. outsourced to global suppliers etc. This JIT business model is one of the root causes for the recent Global Supply Chain disaster because with a JIT business model, any disruption in the delicate balance of JIT component supplies can shut you down, ASAP. The challenge is, JIT was/is a more economical business model. vs. Vertical Integration, otherwise no one would have done it.

The "chip" shortage for all cars is a prime example of JIT gone bad and furthermore the entire planet has put itself in strategic jeopardy because all "chips" are made in Asia. That is a recipe for disaster. There are moves afoot to return chip manufacturing to the US but that will not be easy. A typical chip plant costs over a billion dollars and will take a couple of years to complete. Plus, the technology "magic" of a CPU/chip is not the software of the device, it is the proprietary manufacturing process to build it. It is very specialized, unique and in many cases, patent protected.

I would offer that many of the car companies brought the chip fiasco on themselves to some degree. I believe each manufacture has there own "proprietary" device. i.e. a Ford chip is different then a GM chip etc. I think they should all look at the PC industry. The components inside the "box" are universal. You will find identical parts in a Dell, IBM, ASUS PC, etc. As such you can source swap parts easily but that is not the automotive way of doing business. Proprietary parts means higher service parts prices and then their is the internal engineering design arrogance where insiders think their design is the "only" solution. To me, a chip in a car is just a computer component, just like the chip in my phone or PC. So why are they not designing systems to use universal components? I am convinced that the "chip" in my phone or laptop can easily manage the computational requirements of the chips in my MachE. There are some parts in an EV that are universal, i.e. light bulbs, tires, hardware, brakes, LVB, etc. So why the need for proprietary chips? Wouldn't it be nice if a RAM chip for my laptop would work in my EV? Just flash in with the right software and away you go! Think about it . . . . 🤔

When a company like Ford decides to "build in house" that is a tall order with many challenges. The strategy may " harden them against future global supply chain risks" but it will cost a lot of R & D money and create new risks. Keeping up with certain high tech components, like batteries, and chips could become a major challenge. Collectively, the battery and chip guys spend billions on R&D. Will Ford? Maybe, maybe not . For decades now, the Ford culture is an "assembler of components" to make a car. Currently, about 80% of the approximately 30,000 components needed to build a car are outsourced. ( Recent data from an internet search)


Deciding to "vertically integrate" is a complicated conundrum with no clear competitive or financial advantages at the moment.

Time will tell . . . .
 

RickMachE

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You might want to read about BlueOval City. Ford and SK On are investing $5.6B.
 


MellowJohnny

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With the caveat that I don't know what I'm talking about, logically it sounds like what they mean is "the big pieces" will be vertically integrated - batteries (⅓ of the cost of the car), motors, suspension (?), body panels (?) with the rest still outsourced.
 

Bigfeets

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I ordered a 2022 MME the day before the 12/8/21 price increase. Horror stories of ADM abounded. Chip holds and recalls were happening. The predicted delivery time was 28+ weeks. Announcements made then were to double EV production in 2 years, cut allocation to dealers who imposed ADM, negotiate better chip supplies. None of them helped with my order. Without announcements, Ford apparently delayed Premium and CR1 production in favor of GT and Select, which added about ~3 months to the wait for my order to be built. It was built 10 months after ordering but has now been 2 months in "shipped" status, so far, and counting. Current delivery ETA would be one year after ordering. I do expect "my" EV-certified dealer to honor the PP and no-ADM promises, but they have been indifferent to my, throughout the long wait.
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