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Update, June 16, 12:40pm EST: This article was initially published on June 15 with the headline “Ford’s Cost to Build the Mach-E Increased $25,000 Per Car Due to Battery Prices Skyrocketing.” Our report was based on an article from CNBC which included that $25,000 figure. Today, CNBC has issued a correction on that piece, stating that the article “has been updated to remove an incorrect figure for cost increases associated with building Ford’s Mustang Mach-E. Ford CFO John Lawler did not provide a number for that increase.” We have updated this article and headline to reflect this change.”
______________________


Via jalopnik article:

Ford's Cost to Build the Mach-E Increased $25,000 Per Car Due to Battery Prices Skyrocketing
While inflation has wiped out the profits Ford made off the EV, consumer demand remains strong.

June 15, 2022​
Ford is preparing for an economic downturn, at least according to the automaker’s CFO. The company has recently seen record profits with strong demand from vehicles like the Maverick, Mustang Mach-E, Bronco, and F-150 Lightning. But as CNBC News reports, like most Americans the company isn’t immune from the effects of inflation.​
Ford made money in 2021, raking in nearly $18 billion in profit. Granted a lot of that was on the back of its stake in Rivian, but still, people want what the brand is selling. In January of this year alone, Ford sold nearly 155,000 vehicles. They’re selling them faster than they can make them, despite having to raise prices to offset inflation.​
While this has helped the company’s profit margins, not everything is immune. Speaking at a conference hosted by Deutsche Bank, Ford’s CFO John Lawler stated how inflation has affected the company, namely the Mustang Mach-E. He added that even though the company raised the price of the Mach-E with the rest of its lineup to offset inflation, the double squeeze of rising battery materials costs and inflation gobbled up the Mach-E’s profits. While Lawler didn’t state how much the company could be potentially losing at this time on every Mach-E it sells, he stated that costs for the EV gone up to the tune of $25,000.​
In a sign that the gravy train could stop running at any time, Lawler stated that the Ford is taking steps to prepare for an economic downturn. The main sign of things to come? Late car payments. Lawler said Ford Credit, Ford’s vehicle financing arm, has started to see more and more late payments. I guess those 84-month loans Ford defaulted to on some models weren’t a good idea after all. And while Lawler reassured that the company is in a better position for an economic downturn than before, if the economy does tank a bit, automakers and consumers are going to get hit hard.​
Automakers have been pouring billions into an EV transition. Many could be in the same position as Ford with inflation eating up profits as manufacturing costs rise. And with vehicle prices higher than ever, and consumers taking out longer and longer loan terms to finance them (and the markups that dealers have been placing on them), this all has the potential to get really bad before it gets better.​

 


Mathington

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Via jalopnik article:

Ford's Cost to Build the Mach-E Increased $25,000 Per Car Due to Battery Prices Skyrocketing
While inflation has wiped out the profits Ford made off the EV, consumer demand remains strong.

June 15, 2022​
Ford is preparing for an economic downturn, at least according to the automaker’s CFO. The company has recently seen record profits with strong demand from vehicles like the Maverick, Mustang Mach-E, Bronco, and F-150 Lightning. But as CNBC News reports, like most Americans the company isn’t immune from the effects of inflation.​
Ford made money in 2021, raking in nearly $18 billion in profit. Granted a lot of that was on the back of its stake in Rivian, but still, people want what the brand is selling. In January of this year alone, Ford sold nearly 155,000 vehicles. They’re selling them faster than they can make them, despite having to raise prices to offset inflation.​
While this has helped the company’s profit margins, not everything is immune. Speaking at a conference hosted by Deutsche Bank, Ford’s CFO John Lawler stated how inflation has affected the company, namely the Mustang Mach-E. He added that even though the company raised the price of the Mach-E with the rest of its lineup to offset inflation, the double squeeze of rising battery materials costs and inflation gobbled up the Mach-E’s profits. While Lawler didn’t state how much the company could be potentially losing at this time on every Mach-E it sells, he stated that costs for the EV gone up to the tune of $25,000.​
In a sign that the gravy train could stop running at any time, Lawler stated that the Ford is taking steps to prepare for an economic downturn. The main sign of things to come? Late car payments. Lawler said Ford Credit, Ford’s vehicle financing arm, has started to see more and more late payments. I guess those 84-month loans Ford defaulted to on some models weren’t a good idea after all. And while Lawler reassured that the company is in a better position for an economic downturn than before, if the economy does tank a bit, automakers and consumers are going to get hit hard.​
Automakers have been pouring billions into an EV transition. Many could be in the same position as Ford with inflation eating up profits as manufacturing costs rise. And with vehicle prices higher than ever, and consumers taking out longer and longer loan terms to finance them (and the markups that dealers have been placing on them), this all has the potential to get really bad before it gets better.​
I am curious what the margins are for the Mach-E and Lightning, I wouldn't think they would be large enough to absorb this. At a $25,000 increase I would think that Ford would stop production all together as they would lose billions.
 

RickMachE

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First thing I said to myself when I read the article earlier today was "no way in hell is the battery cost up $25,000."
 

DrAchoo

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I'll echo the sentiment that common sense dictates that the headline is wrong. There is no way general inflation of 10% has caused what would be a minimum 50% increase in cost to Ford (assuming a worst case scenario where Ford was selling the cars at cost).
 

Mach-Lee

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This is probably another reporter screw up, they probably heard something wrong on the call.

It’s not clear if their costs went up $25k (unlikely), the Mach-E costs $25k more than an Edge to produce, or none of the above.
 

 
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