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Harley Lover

Farley: Ford to double EV production capacity in two years

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EV credit has historically not been refundable so you can only use it if you have high enough taxable income. I don't know the particulars in the current bill but I would assume it stays that way.

 

Also, don't think the US only provision will stand because the free trade agreement with Canada and Mexico specifically prohibits this kind of thing. All vehicles made in North America are considered domestic by law. 

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2 hours ago, slemke said:

It’s a credit, not a deduction….reduces the tax you owe by the amount of the credit.  No idea if the credit is refundable or if it can be split over multiple years.  It shouldn’t apply to vehicles with luxury car prices either, but it does.

Build Back Better wording looks to support  the tax credit as being refundable, so now it gets interesting….

Up until now, tax credits on electric vehicles didn’t operate that way (BBB is still to pass the Senate/ Manchin).

Edited by jpd80

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3 hours ago, slemke said:

Good luck.  Growing up in rural MN with propane heat, filling up the propane tank was a big deal.  Didn’t want to run out during a cold snap in January and have to pay a premium.

 

We burn wood too.  Probably 75% wood, the rest propane.  Only way to get through a long northern Michigan winter.

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12 hours ago, FordBuyer said:

 

The big sticking point now is the human infrastructure bill passed by the house today. It says the $12,000 subsidy to BEVs goes to only American built with union labor. The Senate will probably change that, but for now Oakville is in limbo as builder of BEVs. 

 

Oakville produced products will qualify due to existing trade agreements.

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7 hours ago, twintornados said:

 

Oakville produced products will qualify due to existing trade agreements.

I also believe Trudeau met with Biden and worked out an agreement. Ditto with Mexico. And Manchin will have a say in Senate changes to the Bill. I also think that BEV subsidies will be more egalitarian this time and apply to just about everyone including retirees without mortgages and big working incomes.

 

Right now BEVs seem to be for high income customers only. Used Tesla Model 3 and Y sell for over $50,000 around here and no tax credit. The more affordable Chevy Bolt has a huge recall with battery fires. And at Mullinax Ford all Msch Es are $50,000+ although there are tax credits available to upscale customers who itemize.

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2 hours ago, FordBuyer said:

I also believe Trudeau met with Biden and worked out an agreement. Ditto with Mexico. And Manchin will have a say in Senate changes to the Bill. I also think that BEV subsidies will be more egalitarian this time and apply to just about everyone including retirees without mortgages and big working incomes.

 

Right now BEVs seem to be for high income customers only. Used Tesla Model 3 and Y sell for over $50,000 around here and no tax credit. The more affordable Chevy Bolt has a huge recall with battery fires. And at Mullinax Ford all Msch Es are $50,000+ although there are tax credits available to upscale customers who itemize.

Also don’t forget the CETA for export to Europe from Canada.That’s also has to be factored in as well for any decision regarding Oakville.  Anyways in response to what you’re saying I agree that prices have to come down as these EVs are super expensive for the most part. The way the subsidy system is laid out should be interesting.

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21 hours ago, bzcat said:

EV credit has historically not been refundable so you can only use it if you have high enough taxable income. I don't know the particulars in the current bill but I would assume it stays that way.

 

Also, don't think the US only provision will stand because the free trade agreement with Canada and Mexico specifically prohibits this kind of thing. All vehicles made in North America are considered domestic by law. 

I also wonder if the union-only requirement for the higher tax credit will stand up to a court challenge.

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So I’m wondering if the second Lightning plant will go in the same region or would it be better located in the South or West?

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55 minutes ago, jpd80 said:

So I’m wondering if the second Lightning plant will go in the same region or would it be better located in the South or West?

 

The quote sounds like a shorter term view/reaction to reservation numbers rather than a long term comment (though obviously a short term addition increases long term projections too).  So to me it sounds like they're looking for somewhere to increase assembly at places they already have (so DTP), before the Tennessee plant comes online.

 

If it's short term/trying to get it going as quickly as possible, it wouldn't make sense to have it at a completely different site, or too far from existing company infrastructure/supplier base.

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1 hour ago, rmc523 said:

 

The quote sounds like a shorter term view/reaction to reservation numbers rather than a long term comment (though obviously a short term addition increases long term projections too).  So to me it sounds like they're looking for somewhere to increase assembly at places they already have (so DTP), before the Tennessee plant comes online.

 

If it's short term/trying to get it going as quickly as possible, it wouldn't make sense to have it at a completely different site, or too far from existing company infrastructure/supplier base.

 

Agree, this is about the current Lightning, which uses quite a bit of the current F150. So the obvious location for additional production is one of the 2 truck plants. Since Ford are already knee deep in preparing for E Transit in Kansas City, I wonder if the additional Lightning output might fit there, simply because (presumably) most, if not all, of the 'E' infrastructure is in place? But - since E Transit is also supposed to be part of the increase, maybe that doesn't work. 

Edited by Harley Lover

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Remember they are talking about 600,000 sales worldwide.  I'm sure a lot of this production will be taking place overseas.  

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1 hour ago, Footballfan said:

Remember they are talking about 600,000 sales worldwide.  I'm sure a lot of this production will be taking place overseas.  

 

You make an interesting point. The article claims "in the U.S." but later refers to the figure as 'global' sales. Then to further muddy the waters, the products listed to attain that 600,000 figure are all going to be produced in the U.S. and Mexico (MME). On balance, if you're able to read the entire article, I think the 600,000 figure is for the U.S..  Farley is talking about a 2 year window, which precludes any of the announced capacity in Tennessee, Kentucky, or Oakville. I think it also precludes any MEB production in Europe, which I don't think is included in this claim anyway. The quote:

"Within 24 months Ford Motor Co. plans to become the No. 2 maker of electric vehicles in the U.S. behind only Tesla with the capacity to produce 600,000 EVs per year. Once that occurs, Farley said Ford could challenge for the No. 1 spot.

The automaker’s 600,000-per-year global EV projection is double what it originally intended, CEO Jim Farley told Automotive News. The production would be spread among its first three EVs: the Mustang Mach-E, F-150 Lightning and E-Transit, and would come before its Blue Oval City campus in Tennessee comes online."

 

Edit: I don't think Euro MEB sales would count anyway, since Ford won't be the "maker" of those EVs, which will come off a VW line.

Edited by Harley Lover

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19 minutes ago, Harley Lover said:

Edit: I don't think Euro MEB sales would count anyway, since Ford won't be the "maker" of those EVs, which will come off a VW line.

 

I think you're right about considering only North America numbers, but I had the impression the Cologne facility was getting ready to produce MEB ev's.

Edited by passis

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51 minutes ago, passis said:

 

I think you're right about considering only North America numbers, but I had the impression the Cologne facility was getting ready to produce MEB ev's.

 

Yes, Ford is building an all electric plant in Germany. No way can Ford produce 600,000 BEVs/year in only Mexico, Kansas City, and Dearborn without the big center in KY, TN even in operation. They must be including the German plant being online too. Very optimistic goal for sure. 

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Production of Mach E just began in China last week

 

Also, isn’t Chinese Territory also available as a BEV version?

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4 hours ago, Harley Lover said:

 

You make an interesting point. The article claims "in the U.S." but later refers to the figure as 'global' sales. Then to further muddy the waters, the products listed to attain that 600,000 figure are all going to be produced in the U.S. and Mexico (MME). On balance, if you're able to read the entire article, I think the 600,000 figure is for the U.S..  Farley is talking about a 2 year window, which precludes any of the announced capacity in Tennessee, Kentucky, or Oakville. I think it also precludes any MEB production in Europe, which I don't think is included in this claim anyway. The quote:

"Within 24 months Ford Motor Co. plans to become the No. 2 maker of electric vehicles in the U.S. behind only Tesla with the capacity to produce 600,000 EVs per year. Once that occurs, Farley said Ford could challenge for the No. 1 spot.

The automaker’s 600,000-per-year global EV projection is double what it originally intended, CEO Jim Farley told Automotive News. The production would be spread among its first three EVs: the Mustang Mach-E, F-150 Lightning and E-Transit, and would come before its Blue Oval City campus in Tennessee comes online."

 

Edit: I don't think Euro MEB sales would count anyway, since Ford won't be the "maker" of those EVs, which will come off a VW line.

 

That makes it sound like 600k of US production.

 

Mach E is made here and gets sent over to Europe, so that doesn't mean 600k of US sales, though.

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4 hours ago, rmc523 said:

That makes it sound like 600k of US production.


You mean North American production…..

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Farley's tweet said global but the article wasn't clear on it.

 

Let's revisit the numbers a bit...

 

  • 600k is for the three models launched/launching. Does not include MEB at Cologne or Oakville which won't began volume production EV until 2024 - after the date that Farley said they will hit 600k.
  • F-150 Lightning has single source production at Detroit. Initial reports said Ford planned 55k annual volume but later Farley said they would do 80k. I'm guessing that number is even higher now... since Ford has over 250k reservations - so perhaps they are adding a 2nd shift ASAP? Maybe they can crank out 160k a year?
  • eTransit has two production sites - Turkey and Kansas City. Initial reports said Ford plan to sell 25k in Europe and another 10-20k in the US. But fleet orders have surpassed that by magnitude of 7 or 8 including an undisclosed amount from Amazon. I'm guessing Ford now plans to build at least 100k eTransit a year. 
  • Mach E is produced in Mexico and China. Mexico has capacity for over 150k easily since the plant is otherwise not building anything. China is unclear but let say up to 100k which seems reasonable guess.
  • Other BEV like Territory are too low volume and Ford has no plans to ramp them up.

So I count 510k just rough back of the envelop math. Mach E has sold only ~30k since introduction so to go to 150k in Mexico is a serious expansion... Does Ford have that many unfilled reservations on Mach E?

 

Edited by bzcat

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22 minutes ago, bzcat said:
  • Mach E is produced in Mexico and China. Mexico has capacity for over 150k easily since the plant is otherwise not building anything. China is unclear but let say up to 100k which seems reasonable guess.

So I count 510k just rough back of the envelop math. Mach E has sold only ~30k since introduction so to go to 150k in Mexico is a serious expansion... Does Ford have that many unfilled reservations on Mach E?

 

 

From what I'm seeing, there's a real problem with Mach-E Select AWD units equipped with the standard 68KWH battery pack. The problem is that there's little if any demand and those vehicles in stock with the 68KWH battery packs are just sitting with no takers. A few months ago, Ford was forcing Dealers to take similar vehicles and now those vehicles are built and in transit to join those in stock that Dealers can't move. The higher end Mach-E situation is a different story as you can't many or any available in stock.   

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1 hour ago, bzcat said:

Farley's tweet said global but the article wasn't clear on it.

 

Let's revisit the numbers a bit...

 

  • 600k is for the three models launched/launching. Does not include MEB at Cologne or Oakville which won't began volume production EV until 2024 - after the date that Farley said they will hit 600k.
  • F-150 Lightning has single source production at Detroit. Initial reports said Ford planned 55k annual volume but later Farley said they would do 80k. I'm guessing that number is even higher now... since Ford has over 250k reservations - so perhaps they are adding a 2nd shift ASAP? Maybe they can crank out 160k a year?
  • eTransit has two production sites - Turkey and Kansas City. Initial reports said Ford plan to sell 25k in Europe and another 10-20k in the US. But fleet orders have surpassed that by magnitude of 7 or 8 including an undisclosed amount from Amazon. I'm guessing Ford now plans to build at least 100k eTransit a year. 
  • Mach E is produced in Mexico and China. Mexico has capacity for over 150k easily since the plant is otherwise not building anything. China is unclear but let say up to 100k which seems reasonable guess.
  • Other BEV like Territory are too low volume and Ford has no plans to ramp them up.

So I count 510k just rough back of the envelop math. Mach E has sold only ~30k since introduction so to go to 150k in Mexico is a serious expansion... Does Ford have that many unfilled reservations on Mach E?

 

 

I don't think production capacity is necessarily the problem for Mach E - I think it's rather battery capacity.

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12 minutes ago, rmc523 said:

 

I don't think production capacity is necessarily the problem for Mach E - I think it's rather battery capacity.

 

My point was battery capacity, not production capacity. 

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35 minutes ago, ice-capades said:

 

My point was battery capacity, not production capacity. 

 

Yes, I understand.  I was making a separate point.  That Ford thus far has been limited BEV (and even hybrid)-wise in what they can produce because of battery production constraints, not necessarily the physical space to assemble vehicles.

 

I'd agree that people are still hesitant of low battery capacity/range models.

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45 minutes ago, rmc523 said:

 

Yes, I understand.  I was making a separate point.  That Ford thus far has been limited BEV (and even hybrid)-wise in what they can produce because of battery production constraints, not necessarily the physical space to assemble vehicles.

 

I'd agree that people are still hesitant of low battery capacity/range models.

 

Thanks. I appreciate the clarification on the point you were trying to make. 

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5 hours ago, rmc523 said:

 

I don't think production capacity is necessarily the problem for Mach E - I think it's rather battery capacity.

 

The SK battery plant in Georgia that was the original Ford-SK join venture will open next year so that solves a lot of the battery supply issue for Ford in the near term. This plant is supposed to supply the batteries for the 600k vehicle that Ford wants to sell (mainly F-150 but maybe also for others). I think this is why Farley feels comfortable predicting 600k volume because he's got that plant coming. 

 

Additional the SK battery plants from the new BlueOval City project in Tennessee and Kentucky will come online for the EV in OAC and Explorer/Aviator due in 2024.

Edited by bzcat

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15 hours ago, bzcat said:
  • F-150 Lightning has single source production at Detroit. Initial reports said Ford planned 55k annual volume but later Farley said they would do 80k. I'm guessing that number is even higher now... since Ford has over 250k reservations - so perhaps they are adding a 2nd shift ASAP? Maybe they can crank out 160k a year?

 

BZ, from the linked article:



Farley says Ford has the capability to add another shift of capacity at the Mexico plant that produces the Mach-E, but the situation is different with the F-150 Lightning at its new Rouge Electric Vehicle Center.

“In Lightning’s case we have to find physical space for more final assembly,” he said.

Farley says the number of F-150 Lightning reservations is now “approaching 200,000 units” and that he expects “north of 80 percent” of reservation holders to convert to actual sales. The vehicle is set to go on sale next year.

So that answers your speculation - for whatever reason, adding a shift isn't in the cards for Lightning - they are seeking more space, I wonder if that means an additional building with a layout similar to what is being done now for Lightning?

Also - the quote confirms what you wrote about adding a shift in Mexico, which might also cover initial production of EV Explorer and Aviator, along with added MME output.

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