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bzcat

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bzcat last won the day on January 15 2023

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  1. You know it is politicized when 50% increase year over year is brushed off, and 25% market share in leading indicator markets like California is dismissed as a "granola coast" mandate. You see it in this thread. Politicized is a nice way of saying ignoring empirical evidence. Just go down the list of all the hot button politicized issues in the US... one side is ignoring science or empirical evidence and trying to gaslight the other side. Calling something a "mandate" is an easy way to tell someone is not interested in a public policy discussion based on facts. I too bemoan the fact that our government has mandated school shootings. See how that works? I got an EV because it makes a lot of sense for how we use that car. It's probably true the car won't exist if not for Govt incentives for manufacturers to make it. But it is the same thing for ICE vehicles. Do you think SUV will rule the roads today if not for Sec 179 tax deduction favoring heavy vehicles and CAFE rule that favors longer/wider vehicles? Sure, one of them is a "mandate" but the other is just sensible Govt policy?
  2. GM only kept the car in production because UAW contract requires them to keep a full shift at Fairfax assembly plant (Cadillac XT4 by itself couldn't get enough utilization). Where they had other CUV ready to replace the car production in North America (Sonic, Impala) or is able to close the plant because they found a buyer (Cruze), they did what Ford did: Orion (Sonic) converted to building EV Lordstown (Cruze) sold Ramos Arizpe (Cruze) converted to building Equinox and Blazer and EV next year Oshawa (Impala) converted to building Silverado Fairfax (Malibu) maintained to keep plant utilization which builds another low volume product XT4 The new Malibu will probably be imported from Korea where all the low margin GM products are sourced. There is no indication that GM will continue to build it here since Fairfax plant is supposedly on the chopping block as part of the current UAW negotiation. If Ford had an overseas production site with low cost bases that can produce sedans and not subject to any tariffs, they probably would have imported some cars. They had plan to import Focus from China (and maybe Fusion too who knows) until we slapped 25% tariff on Chinese built cars. We covered this already a few pages back.
  3. Battery cell prices is definitely in the $100 kwh range now and falling. I work for a company that is in the energy sector and I deal with battery pricing weekly. Lithium prices dropped about 50~60% since the start of 2023 and we are now seeing some forward contracts below $90 per kwh. 2021-2022 was an anomaly when the price went up. But everything was going nuts during the height of COVID pandemic.
  4. I mentioned is a couple of pages back. It is almost certain that Ford is making decent if not great profit margin on Mach E. Most OEM are rapidly achieving cost parity between ICE and EV so if they can make gross profit on a similar price ICE, they are almost certainly doing so on the EV. This doesn't even consider the impact of Govt subsidy which has the effect of allowing OEM to mark up the price on EV. The Model E division is still losing money but it is due to the overhead cost (mainly R&D and engineering). I don't think that is a guarantee that C2 Mondeo is profitable. The thing you have to consider is opportunity costs... Ford North America and Europe had fully occupied plants so bring in Mondeo would mean displacing another potentially more profitable product. Ford China had the opposite problem... it has too much capacity so it has to find some product to fill. Ford has contractual requirements to keep these plants open due to JV with Chang'an so Ford is willing to accept lower profit margin on some product just to keep the plant churning. Ford expanded its production footprint in China when Focus was the #1 selling vehicle in China and it couldn't keep up with demand. The wheels have fallen off the wagon since that time and it has probably twice as much production capacity as it can sell. Ford has 7 plants in China and 5 of them is Chang'an Ford and 2 is Jiangling Ford: Chang'an Chongqing 1: C2 Mondeo/Evos/Zephyr Chang'an Chongqing 2: C2 Escape, Focus Chang'an Chongqing 3: C1 Escort, MACH E Chang'an Hangzhou: C2 Edge L/Nautilus Chang'an Harbin: C2 Focus, Explorer/Aviator Jiangling Nanchang: Baodian, Yuhu, Dadao, Ranger, Everest, Bronco (planned), Territory, Yusheng S350, Equator Sport, Equator Jiangling Xiaolan: Transit, Transit Pro, Tourneo, Teshun, Fushun, medium duty cab forward As you can see, Jiangling Ford has a much more efficient utilization of its plant resources, mostly because Ford has more control over this business. Chang'an is a much bigger company and their goal with Chang'an Ford is the extract maximum rent from Ford so they won't agree to shutting down plants that are clearly not needed. Farley has already mentioned that Ford China could become an export focus production hub (like Ford Thailand) if things don't turn around in China soon.
  5. I think there is a Transit assembly operation in Uruguay for South America. But yea... Farley's view is being full line manufacturer in these markets are not worth the trouble. He seems to think these markets are destined to be dominated by Chinese companies so he doesn't want to even engage. Just pull the plug.
  6. True... aerodynamics has relatively small impact in low speed city driving. CD measures how efficiently air move across the surface. At low speed, the volume of air moving past the car is not dramatically different between CD of 0.29 and 0.28. The size of wheels and rolling resistance of tires have far greater impact. At higher speed, air resistance become much more significant factor in efficiency like you mentioned. However, everything adds up eventually. So a good design that returns 10% improvement in CD can compensate for a less efficient heat pump, or 1" larger wheel etc. So it's not for nothing but also not a big difference maker in isolation. We have to evaluate it in aggregate.
  7. No doubt that is a key design consideration for all the car companies. They all try to compensate for the larger frontal area with more streamline fastback or tapered kammback shape in the rear. There is a reason why Mach E looked the way it looks. But I think with with more power dense batteries and/or more efficient power management software, we will see more conventional shapes return. The under car air flow is also a big reason why CUV is less efficient... but EV on skate platforms can perform better here since the bottom is almost entirely sealed.
  8. Ford is very likely making decent margin on F-150 Lightning and Mach E right now. @akirby is right that the business unit is losing money and if you do simpleton math taking the net operating loss divided by number of units sold it results in a loss of something like a $60k per unit. But that ignores all the investments that has to be expensed that otherwise would have long term benefit - mainly R&D and engineering which US accounting rules says you have to expense. So all the R&D costs involved in developing the T1 and GE2 platforms and all the battery tech innovations, all the industrial design work for assembly plant setup to build EV... all of it are hitting the bottom line now but they will result in future revenue and gross profit. It's basically a startup operation. Ford's EV unit is in year 2 or 3 of existence. It will be a few more years before it starts making net profit. But the $80k that Ford charges for Lightning is almost certainly resulting in a gross profit right now. Most car company are reaching production cost parity on ICE and EV or very near it. $60k Mach E GT probably makes more gross profit than $80k Aviator PHEV if you just visualize all the component costs and labor involved in building it.
  9. Agreed... this thread has pretty good content and contribution from a lot of knowledgable people.
  10. Most buyers don't care whether a car brand is tier 1 or whatevers. Certain brands have captured audience - e.g. Acura buyers are overwhelmingly Honda owners while others live and die by conquest because they don't have a deep pool of existing owners to rely on loyalty - e.g. Infiniti or Jaguar. Tesla is unique in that it is often buyer's first EV (which requires mindspace shift) so the buyer is predisposed to switch brands. We saw the same phenomenon when SUV became the main seller for luxury brands and that benefited marginal brands like Lincoln that pivoted to selling mainly (or only) SUVs. If a buyer was going to switch bodystyle, they are also more likely to switch brands. Now imagine you are coming from a ICE luxury sedan and thinking about switching to an EV SUV... there is significant chance you will switch brands and Tesla is there waiting for you. So what you are seeing in the markets for luxury brand now is basically that the brands that formerly leased a lot of luxury sedans/coupe/convertibles (e.g. Audi, BMW, Mercedes) are having trouble holding on their customers when they switch to EV SUV. And there is no doubt that luxury segments are going rapidly to EVs. And not just in the US but all over the world.
  11. Diverse portfolio just for the sake or what customer wants to buy? Take out daily rental sales from Altima or Malibu and you probably lop 30% of the volume. Retail customers want utility vehicles and that's what Ford is giving it to them in the form of Maverick and Bronco Sport. Maverick was a brilliant replacement for Fusion and the market reception for it tells the whole story. A diverse portfolio of products under $30k for Ford will mean more SUVs and trucks in different price points. The obsession with the sedan form factor is ignoring the fundamental market shift away from cars. I love wagons - I've owned a few and currently has one, but it's not coming back anytime soon in the mass market for the same reason sedan is basically done. Sedan is on its way to that niche place where 2 door coupe, hatchback, wagon and minivans have gone. The thing is that car companies are not stupid... they can make a sedan or a wagon with 1.5" suspension lift and call it SUV. One will need $5000 rebate to sell and the other one not only has higher MSRP and will require little to no incentive to sell. So why insist on Ford (or any other company) making a product that is shun by the market and has lower margin. Cars with 1" suspension lift is the new normal. Get used to it.
  12. Why are we discussing this again? The choice for Ford was really simple: Sell 100k Fusion at low or almost no profit, or sell 100k Maverick or Bronco Sport at decent profit. They are literally made in the same place by the same people so the implication is really obvious on the opportunity costs. If Ford had another plant sitting idle, then maybe they would have considered making another Fusion. And if there was no 25% tariff on Chinese cars, maybe Ford would have imported it. Who knows. But those things wouldn't have changed the fact that gross margin on Fusion was likely lower than any truck or SUV alternatives that Ford could be building at the same plant. Nissan sold loads of Altima and it's giving up. There is also no planned replacement for Hyundai Sonata or Kia K5 twin. This segment is headed where the Minivan is right now... niche segment dominated by the last 2 or 3 survivors. GM being opportunistic and keeping the existing Malibu around because it has a UAW contract that locks it into making it doesn't mean there is a good business case for a new generation. The new one supposedly under development is probably going to be imported from Korea... Ford doesn't have the luxury of such overseas manufacturing base.
  13. Maybe Ford is saving the sales for future since they plan to build the Explorer unchanged until 2035 ? I have no idea the real reason but wasn't there some parts shortage so they can't ship? And a stop sale back in July or August?
  14. PHEV with all electric range is required in Europe so the vehicle can access congestion zones in places like London. The ProPower is also important because Ranger is Ford's largest truck in most markets so they are used by trades people like F-150 is used here. Diesel replacement is all about running costs, not necessarily towing power in most of the markets. Gasoline-only trucks probably cost twice as much to run as diesel in most countries in Europe, and perhaps Australia. If Ford can match or exceed the per-mile running costs of diesel, PLUS the bonus of able to enter congestion zones for free, PLUS ProPower benefits, it will be a very appealing product over Hilux, which may or may not get the hybrid power from Tacoma.
  15. Saw online over the weekend that Ford is developing an add on third axle for F-150. Seems like that would be quite appropriate for the F-200 name if it comes to fruition.
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