CATL-Ford Battery Plant

[rperez817]

7 hours ago, 7Mary3 said:

I don't know that GM is making a mistake not cutting prices.             

 

I agree with you 7Mary3. In the "Ford increasing production of Mach-E for 2023" thread I shared a quote from Bank of America analysts who said the Ford and Tesla price cuts "made no sense". 

 

Initially, I was pleased with the Mustang Mach-E price cuts, because combined with increased production and the continued high demand, it suggested that Ford wants to maintain Mustang Mach-E's sales ranking in the segment (in the U.S. market it's #2 after Model Y) short term. But the BOA analysts' statement "cutting prices would be a direct hit to the bottom line today and unnecessarily degrades future earnings power" indicates the price cuts may be bad news for Ford long term.

 

Tesla can afford these price cuts because their profitability is so much higher than any other automaker. But I'm now convinced that Ford, with its weaker financials compared to both Tesla and GM, needs to be very careful about considering additional price cuts, especially because even with the increase in production capacity and supply of components such as batteries in the coming years, the demand for BEV will be extremely high as the global automotive industry goes 100% electric over the next decade.

Edited February 2, 2023 by rperez817

[akirby]

Price cuts are not bad long term as long as they’re not losing money.  The financial impact analysts are worried about affects quarterly earnings which in turn can affect short term share price which is all analysts really care about.  Sometimes short term losses are actually better long term and short term stock price frequently does not reflect long term health or viability.

[7Mary3]

 https://www.bloomberg.com/news/articles/2022-06-15/ford-says-mustang-mach-e-profit-wiped-out-by-commodity-costs?leadSource=uverify wall

 

But I agree, the price cuts shouldn't hurt Ford much overall longer term, particularly if truck and SUV sales offset losses on other specific products.  There is however the problem of what to do for all the customers that recently paid more for the same product that is now discounted.  Not to mention resale.  At least Tesla will face the same issues.

[Rick73]

3 hours ago, rperez817 said:

In the "Ford increasing production of Mach-E for 2023" thread I shared a quote from Bank of America analysts who said the Ford and Tesla price cuts "made no sense". 

 

There are different business opinions.  One article I recall in particular predicts BEV volume in 2023 will be lower in China, Europe, and US than previously anticipated, each for different reasons; though longer term they predict strong demand.  They estimate 2023 volume will be higher, just not as high as previously expected.  If correct, it could explain price cuts.

[akirby]

2 hours ago, 7Mary3 said:

There is however the problem of what to do for all the customers that recently paid more for the same product that is now discounted.  Not to mention resale.  At least Tesla will face the same issues.

No different than buying today and tomorrow Ford announces a new $2K rebate.  It’s a gamble you always take.

[bzcat]

Ford's price cut is mainly to make sure Mach E doesn't miss out on the tax credit because IRS for some reason think it is a car. You can't think of it as just moving the equlibrium on the supply and demand curve. It's actually a shift in the supply curve because all future competitor 5 seat EV will be priced below the $50k threashold in order to qualify for the tax credit.

 

GM is not cutting price because the only model this affects is Lyriq and they are playing to a different audience competing with other luxury brands that are way over $50k anyway. You can bet your entire fortune that the upcoming Blazer EV starting MSRP will match Mach E and Model Y.

 

The other important thing to remember is market share aqusition is important during the EV ramp up phase. Ford has strategic reason to maintain its number 2 position in the market. GM is not responding because like I said, it has nothing to sell in the price range right now. And VW is resorting to rebate ($7,500 is available across all VW/Audi/Porsche EV right now) so they are effectively lowering the prices too. Hyundai Ioniq 5 went from selling over MSRP to dealer begging people to take delivery in a matter of 3 weeks. You don't need to cut prices but doesn't mean you won't be selling at the new price point anyway. 

 

 

Edited February 3, 2023 by bzcat

[rperez817]

21 hours ago, bzcat said:

Ford's price cut is mainly to make sure Mach E doesn't miss out on the tax credit because IRS for some reason think it is a car.

 

All variants of Mustang Mach-E are now classified as a SUV for the Section 30D tax credit, so the MSRP limit is $80k. Treasury Updates Vehicle Classification Standard for Clean Vehicle Tax Credits Under Inflation Reduction Act | U.S. Department of the Treasury

[slemke]

6 hours ago, rperez817 said:

 

All variants of Mustang Mach-E are now classified as a SUV for the Section 30D tax credit, so the MSRP limit is $80k. Treasury Updates Vehicle Classification Standard for Clean Vehicle Tax Credits Under Inflation Reduction Act | U.S. Department of the Treasury

Let’s see how fast the prices ratchet back up.  We know Tesla lowered prices to align with the tax credit caps and that they were lobbying for changes to allow the 5 passenger model Y to be an SUV for tax credit purposes.  If you are looking to by either one, I wouldn’t wait too long.

 

Honestly, I think they are both hatchbacks and should be treated as such.

[Gurgeh]

9 hours ago, slemke said:

Let’s see how fast the prices ratchet back up.  We know Tesla lowered prices to align with the tax credit caps and that they were lobbying for changes to allow the 5 passenger model Y to be an SUV for tax credit purposes.  If you are looking to by either one, I wouldn’t wait too long.

 

Honestly, I think they are both hatchbacks and should be treated as such.

 

The question I have is why they should be treated differently at all? Environmentalists argue that EVs are inherently so efficient that even if the electricity comes from coal it is better for the environment than ICE. And as our power grid keeps getting cleaner (with baseload power shifting from coal to natural gas and with more renewable energy coming on line), why do things like 2wd/awd, height, footprint matter? I can see not spending my tax money to subsidize rich people, but differentiating between types of vehicles doesn't really make sense to me. On the other hand, remember when this was supposed to be a temporary government program? Do those things even exist anymore?

Edited February 4, 2023 by Gurgeh

[slemke]

1 hour ago, Gurgeh said:

 

The question I have is why they should be treated differently at all? Environmentalists argue that EVs are inherently so efficient that even if the electricity comes from coal it is better for the environment than ICE. And as our power grid keeps getting cleaner (with baseload power shifting from coal to natural gas and with more renewable energy coming on line), why do things like 2wd/awd, height, footprint matter? I can see not spending my tax money to subsidize rich people, but differentiating between types of vehicles doesn't really make sense to me. On the other hand, remember when this was supposed to be a temporary government program? Do those things even exist anymore?

I think it goes back to CAFE and treating trucks/suvs differently than cars.  I can see having a higher cap on trucks and 3 row suv/vans that need larger batteries for acceptable range to have a higher cap.  I’m not in favor of subsidizing rich peoples toys (Taycan, model S, lucid, Rivian, hummer, etc).  But, if we want Lightnings with extended range, to be subsidized, a separate cap is needed, otherwise the toys would encroach on the higher cap.

 

The lower cap had actually succeeded in making the model Y and Mach e more affordable without costing taxpayers money.

[akirby]

1 hour ago, slemke said:

I think it goes back to CAFE and treating trucks/suvs differently than cars.  I can see having a higher cap on trucks and 3 row suv/vans that need larger batteries for acceptable range to have a higher cap.  I’m not in favor of subsidizing rich peoples toys (Taycan, model S, lucid, Rivian, hummer, etc).  But, if we want Lightnings with extended range, to be subsidized, a separate cap is needed, otherwise the toys would encroach on the higher cap.

 

The lower cap had actually succeeded in making the model Y and Mach e more affordable without costing taxpayers money.

Why do we still need subsidies at all?  

[Gurgeh]

8 hours ago, akirby said:

Why do we still need subsidies at all?  

 

[slemke]

12 hours ago, akirby said:

Why do we still need subsidies at all?  

We don’t.  The current ones were an improvement over the old ones, but never should have been approved. That’s all I’m going to say on it, since it is all politics.

[jpd80]

On 2/3/2023 at 2:25 AM, akirby said:

Price cuts are not bad long term as long as they’re not losing money.  The financial impact analysts are worried about affects quarterly earnings which in turn can affect short term share price which is all analysts really care about.  Sometimes short term losses are actually better long term and short term stock price frequently does not reflect long term health or viability.

In the past year or so, Ford told us that the US Mach E was break even with a +$50k starting price,

so much that European Mach E prices were increased to match rising costs.

 

Now, lowering some models to catch subsidies in China and USA may be good business but i don’t see it

being the massive shift in paradigm that the government and Ford is hoping for, this is purely perception.

Theres no point in resorting  to selling break even or loss leaders simply to move tens of thousands of stock.

[70 Stang]

21 hours ago, akirby said:

Why do we still need subsidies at all?  

There is no right way to do the wrong thing!

[rperez817]

On 2/1/2023 at 2:19 PM, rperez817 said:

Definitely. While reservations can indicate the overall market appeal of a product by gauging the number of "hand raisers", in the end delivering the product to the customer in a timely manner is what really matters just as you said.

 

All automakers of BEV pickup trucks are having trouble with that, but Ford is doing better than GM, Rivian, and Lordstown Motors nowadays in terms of getting the product shipped.

 

Updates regarding Ford, GM, Rivian, and Lordstown Motors in terms of getting their BEV pickup trucks shipped to customers.

• Ford. Major production increase underway for F-150 Lightning; reservations no longer required for retail orders. Customer Wait Times to Shrink as F-150 Lightning XLT Production Scales; No Reservation Needed for Retail Orders | Ford Media Center
• GM. Silverado EV production started at Factory Zero; third party reviews of Silverado EV released on June 26, 2023. Chevrolet Silverado EV - 2024
• Rivian. Held a "factory sales event" for R1T at their Normal, Illinois assembly plant on June 17, 2023. Rivian offers same day delivery to customers visiting Normal facility (electrek.co)
• Lordstown Motors. Filed for Chapter 11 bankruptcy on June 27, 2023. Claims to be "commencing a comprehensive marketing and sale process for the Endurance vehicle and related assets" to other companies. Lordstown Motors Announces Strategic Restructuring Process | Lordstown Motors Corp.

[HotRunrGuy]

29 minutes ago, rperez817 said:

Rivian. Held a "factory sales event" for R1T at their Normal, Illinois assembly plant on June 17, 2023. Rivian offers same day delivery to customers visiting Normal facility (electrek.co)

 

Being only 2 hours from me, I wish I had known this was going on.  Could have been a fun experience.

 

HRG

[Chrisgb]

On 6/27/2023 at 9:27 AM, rperez817 said:

visiting Normal facility (electrek.co)

• Lordstown Motors. Filed for Chapter 11 bankruptcy on June 27, 2023. Claims to be "commencing a comprehensive marketing and sale process for the Endurance vehicle and related assets" to other companies. Lordstown Motors Announces Strategic Restructuring Process | Lordstown Motors Corp.

According to Wards Auto, Lordstown is seeking a buyer for the company and has filed suit against Foxconn for failing to fulfill their contract to invest $170 million. Foxconn has so far invested $52 Million, and refuses to deliver more because Lordstown's share price went below $1.