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Sandy Munro’s dire warning


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2 hours ago, akirby said:


A lot of people are ignoring the low income and rural market and just assume if they can buy a $40k+ BEV and charge it at home or nearby that everyone can do it.

 

No one is ignoring that but there is plenty of time to address it. Most people live in urban and suburban areas and the vast majority of new vehicle are sold in places where people live. Rural area and low income households don't buy a lot of new cars or trucks. ICE vehicles will still be on the road for 30+ years so there is plenty of time for low density areas to be outfitted with chargers. But even that is kind of a red herring. Every remote rural patch of the US has electricity. A level 2 charger is about $1,000 investment if you have to upgrade your electric panel. If anyone can afford a new truck, they can afford to add a charger. 

 

All the major car companies have already made their investment decisions and on the record about ending ICE sales, most of them have said between 2030 and 2035. A few said 2040 but no one is still pretending there will still be huge demand for ICE in 15~20 years. EV will probably be 75 or 80% of sales by 2035 if not sooner and the rest will be PHEV for your rural residents that may regularly travel distances beyond practical battery range. 

Edited by bzcat
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22 hours ago, FordBuyer said:

 

We keep hearing battery costs will come down, but are they really? I know lithium prices are going up, not down. Scaling up should moderate prices, but as of now there doesn't seem to be any evidence of costs coming down. Even plugins are at least $5,000 more than conventional. Meanwhile, Tesla prices are going up almost every week. 

 

The manufacturing cost of BEV is roughly 10~15% higher than ICE right now and should reach parity in the next 12~24 months. Car companies are charging roughly 20~25% premium in price on BEV vs. ICE now. Whether car companies decide to pass that manufacturing savings to consumer remains to be seen but BEV has much lower operating costs than ICE so the total ownership cost of BEV is lower than ICE even factoring in the 25% price premium now. 

 

Edit: just to clarify - I'm referring to the marginal cost. The cost related to R&D and investments required in manufacturing plants are not included. In another word, most EVs generate pretty healthy gross profits for their manufacturer but they may not be net cash flow positive because there are external costs involved in switching to making EV: you need new engineering expertise and new/retool production facilities, and new supply chains etc.

Edited by bzcat
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1 hour ago, bzcat said:

 

No one is ignoring that but there is plenty of time to address it. Most people live in urban and suburban areas and the vast majority of new vehicle are sold in places where people live. Rural area and low income households don't buy a lot of new cars or trucks. ICE vehicles will still be on the road for 30+ years so there is plenty of time for low density areas to be outfitted with chargers. But even that is kind of a red herring. Every remote rural patch of the US has electricity. A level 2 charger is about $1,000 investment if you have to upgrade your electric panel. If anyone can afford a new truck, they can afford to add a charger. 


I grew up in rural Georgia which is just like the rest of the South and Midwest and Plains outside of the big cities and that’s simply not accurate. They buy a lot of new vehicles including entry level models and a majority of residents can’t add a level 2 chargers without a complete rewire.  This is why fast and widely available public charging is a requirement to go from 75% BEVs to 100%,

 

 

 

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1 hour ago, bzcat said:

All the major car companies have already made their investment decisions and on the record about ending ICE sales, most of them have said between 2030 and 2035. A few said 2040 but no one is still pretending there will still be huge demand for ICE in 15~20 years. EV will probably be 75 or 80% of sales by 2035 if not sooner and the rest will be PHEV for your rural residents that may regularly travel distances beyond practical battery range. 


A statement today about what will happen in 15 years is nothing more than a PR move.  It means they’re investing in the technology to be able to do that but getting there will depend on government regulations, battery technology and supply, charging technology and infrastructure, pricing and a host of other variables.

 

I agree we can probably get to 75% BEV/25% HEV-PHEV by 2035.  But that’s a far cry from 100%

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1 hour ago, rperez817 said:

 

If anyone on this forum is afflicted by "confirmation bias", it's you. Did you watch the entire video in the original post?


I watched enough to know he isn’t credible.  When he talks about the crippling debt of the legacy automakers with Ford at $160B and either doesn’t realize or purposely ignores that almost all of that debt is with the credit divisions which is offset by auto loans and leases.  
 

Ford’s actual debt is $25B not $160B and that has a huge impact on the Altman Z score.  
 

Stop parroting what you read and try doing your own research.

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2 hours ago, akirby said:


I watched enough to know he isn’t credible.  When he talks about the crippling debt of the legacy automakers with Ford at $160B and either doesn’t realize or purposely ignores that almost all of that debt is with the credit divisions which is offset by auto loans and leases.  
 

Ford’s actual debt is $25B not $160B and that has a huge impact on the Altman Z score.  

That’s the the thing, the contrived debt alarm for both GM and Ford makes them look much worse than they are

whike Tesla’s massively inflated market capitalisation makes it look much better than it is.

 

A total distortion of the Altman Z Score to suit a certain narrative……..BEV fans are eating it up.

Edited by jpd80
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11 hours ago, Chrisgb said:

Ahh, La Belles, we hardly knew ye.

A couple funny stories about that. When I was a young kid a lot of toys from “Santa” still had a La Belle’s price tag on them… My parents would say “La Belle’s is Santa’s favorite store so if the elves can’t make it he gets it at La Belle’s” We bought that excuse. Lol

 

Later Best bought them out and we thought a store named Best sounded stupid and they should have at least named it La Best. Lol Not that any of you cared about childhood stories of a catalog showroom, but it’s ok to lighten the mood around here once in awhile.

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2 hours ago, rperez817 said:

 

It is a desperation video in that Sandy Munro shares the truth about the desperate situation legacy automakers face to avoid being eaten alive amid the ongoing automotive industry revolution.

OK let’s try this,

Knowing what you do about buyer preferences in North America, how do you think Chinese EVs would be received?

Also, going on your perception of European buyers,

do you really think that the EU will bend over and let China walk all over its local brands by having no protection in place?

 

While all should be concerned by the massive rise of EVs in China, that should be tempered with the knowledge that selling vehicles is a lot more complex than mobile phones and without the emotional connection/gotta have, it’s just another car company with all the the issues of winning trust and still being there a year later.

Edited by jpd80
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Sandy and i are about the same age, and both started at one of The Big Three in the 60's, he at Ford, me at GM.  Both watched the domestic industry slide downhill due to poor management, and both of us were trained by Dr. W. Edwards Deming, the man who taught quality to post-war Japan.

Decades ago, Dr. Deming predicted that the Japanese would dominate the auto industry, and only one of the Big Three would remain standing.  We are now down to two, and things don't look good for GM.  I'm rooting for Ford, baggage and all...

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26 minutes ago, Cobra 427FE said:

We are now down to two, and things don't look good for GM.  I'm rooting for Ford, baggage and all...

 

Same here Cobra 427FE sir. Both GM and Ford, like all legacy automakers, face existential threats in the decade ahead. Ford now appears to be in the stronger position, though. GM's first mover advantage with BEV and with autonomous vehicles has already been eroded, especially by Tesla. Also, the video that LookingToBuyAFord shared in this thread topic demonstrates overconfidence on the part of Mary Barra that GM will be a leader in the "new world" of the automotive industry. By contrast, Ford CEO Jim Farley properly acknowledges Tesla's leadership in this area and the competitive threat it represents.

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GM has always been individual projects and PR whereas Ford does more comprehensive portfolio planning at a corporate level.  They like to make bold PR moves but rarely follow through with anything of substance.

 

They did EV1, had mild hybrid trucks, Volt, Bolt and Hummer.

 

Meanwhile Ford did hybrid escape and plug in cmax, fusion and MKZ.  Now they have Escape and Corsair and Explorer and Aviator which also support plug in versions with the ability to do a lot more.  On the EV side they have Mach-E which trumps bolt in every way.  And they have BEV transit and F150 and super duty on the way while GM has a $100k Hummer.  Where are GMs hybrids?

 

Ford has issues with quality and moving too slowly but they have a much better plan for this transition than GM does.

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1 hour ago, akirby said:

They did EV1, had mild hybrid trucks, Volt, Bolt and Hummer.

 

GM had or has first mover advantage with all of those.

  • EV1, first mass produced, purpose built BEV from a major automaker in the modern era
  • 2004 Silverado/Sierra PHT, first mild-hybrid pickup truck
  • 2009 Silverado/Sierra 2-Mode Hybrid, first full-hybrid pickup truck
  • Volt, first mass produced PHEV in the U.S. market
  • Bolt, first long-range BEV (230+ mile EPA estimated range) under $40k 
  • Hummer EV, first BEV supertruck

EV1's spectacular failure is well known, made even more infamous by the movie Who Killed the Electric Car. Tesla may not even exist today had it not been for the way GM mishandled EV1. Both generations of hybrid pickup trucks were sales flops. Volt was made obsolete by Bolt. Bolt got slaughtered by Tesla Model 3. Success of Hummer EV remains to be seen but I'm not as optimistic now as when that vehicle was first announced.

 

The rapid erosion of GM's first mover advantage for EV1, hybrid pickup trucks, and Bolt, combined with too much confidence among GM executives about leading the "new world" of the automotive industry, does not bode well for the company's future. The SolvingMoneyProblem video that LookingToBuyAFord shared as well as Sandy Munro's insights make a compelling case for a 2nd GM bankruptcy.

 

 

Edited by rperez817
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The concern I have is that predictively, both GM and Ford are playing to their strengths with large BEV trucks and SUVs to ensure dominance and profitability - that’s fine but what’s not OK is that Ford won’t have affordable compact BEVs in production and on sale before about 2026. That’s another four years of marking time with gasoline and hybrids in segments where Tesla, VW and the Chinese are already active……..can Ford really afford to give its competitors such a big head start?

I think it’s a huge blind spot and something Ford management will live to regret, Oakville should be switching to BEVs now.

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1 hour ago, jpd80 said:

The concern I have is that predictively, both GM and Ford are playing to their strengths with large BEV trucks and SUVs to ensure dominance and profitability - that’s fine but what’s not OK is that Ford won’t have affordable compact BEVs in production and on sale before about 2026. That’s another four years of marking time with gasoline and hybrids in segments where Tesla, VW and the Chinese are already active……..can Ford really afford to give its competitors such a big head start?

I think it’s a huge blind spot and something Ford management will live to regret, Oakville should be switching to BEVs now.

 

If really deemed necessary, could they just ship over Euro MEB-based models in the smaller segments?

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1 hour ago, jpd80 said:

The concern I have is that predictively, both GM and Ford are playing to their strengths with large BEV trucks and SUVs to ensure dominance and profitability - that’s fine but what’s not OK is that Ford won’t have affordable compact BEVs in production and on sale before about 2026. That’s another four years of marking time with gasoline and hybrids in segments where Tesla, VW and the Chinese are already active……..can Ford really afford to give its competitors such a big head start?

I think it’s a huge blind spot and something Ford management will live to regret, Oakville should be switching to BEVs now.


Since when does Tesla have affordable compact BEVs?    Given the battery constraints and prices I think focusing on mid to higher priced BEVs make perfect sense.  The technology is the same so they’re not losing the ability to bring those out later.   It would be good to get the midsized Bev utilities out sooner but I think those are 2024 not 2026 in Oakville.

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1 hour ago, jpd80 said:

.....that’s fine but what’s not OK is that Ford won’t have affordable compact BEVs in production and on sale before about 2026.........

 

Jim Farley says:

 

"Average people cannot afford these vehicles and we have a lot of work to do to make them more affordable. ... That's the one that keeps me up at night."

 

https://www.arcamax.com/homeandleisure/automotive/automotivenews/s-2572884

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3 hours ago, jpd80 said:

The concern I have is that predictively, both GM and Ford are playing to their strengths with large BEV trucks and SUVs to ensure dominance and profitability - that’s fine but what’s not OK is that Ford won’t have affordable compact BEVs in production and on sale before about 2026. That’s another four years of marking time with gasoline and hybrids in segments where Tesla, VW and the Chinese are already active……..can Ford really afford to give its competitors such a big head start?

I think it’s a huge blind spot and something Ford management will live to regret, Oakville should be switching to BEVs now.

 

Meanwhile, the redesigned Kia Niro will have hybrid, plugin, and full electric versions out soon. For 2023, too bad the redesigned Escape won't be the same. My hope is that at least the 2023 Escape comes in hybrid/plugin form only. Supposedly, BS will get hybrid option in 2024. Bronco needs hybrid option also as fuel mileage is horrible in full ICE form. 

 

I personally don't care how many BEVs Ford does as long as Ford offers full hybrid/plugin as standard on all its vehicles. Maverick to me is the blueprint. Great fuel mileage and much lower emissions on all its vehicles. And a few BEVs for municipalities that ban ICE. 

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2 hours ago, akirby said:


Since when does Tesla have affordable compact BEVs?    Given the battery constraints and prices I think focusing on mid to higher priced BEVs make perfect sense.  The technology is the same so they’re not losing the ability to bring those out later.   It would be good to get the midsized Bev utilities out sooner but I think those are 2024 not 2026 in Oakville.

 

Model 3 starts at $40,690.

 

Hardly the 25k people are mentioning as affordable here.

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51 minutes ago, FordBuyer said:


Meanwhile, the redesigned Kia Niro will have hybrid, plugin, and full electric versions out soon.


Good for Kia.  Meanwhile Ford will be selling $40k-$80k Mach-Es, F150 Lightnings, E Transits and BEV utilities and making a lot more profit.

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4 hours ago, akirby said:

Who are you and what did you do with rperez the GM cheerleader?

 

First movers are almost never as successful as fast followers.  Look at Blackberry/LG Prada vs iPhone.

 

I'm rperez817, and am not and never was "the GM cheerleader". ?

 

First mover advantage is real. But people and organizations who possess that advantage have to be very careful to cultivate it properly. Any missteps by first movers can result in the "fast followers" taking the lead. 

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59 minutes ago, rmc523 said:

 

Model 3 starts at $40,690.

 

Hardly the 25k people are mentioning as affordable here.

Hers the funny thing,

a while back, Ford was saying that the cost of building a BEV was now close to that of an ICE/Hybrid but I haven seen them repeat them hat claim recently 

 

Lets also keep in mind that the Mustang Mach E started out as the E C-Max and clearly intended as an affordable utility 

 

Im not blaming Ford for playing to its strengths, what I am concerned about is its  continual misreading/ underestimating of BEV interest and what those people are willing to pay. How many times will it take for Farley to be shocked before Ford senior management gets that they are behind in an important game

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