Ford pushes back EV target, warns of wider losses due to slower-than-expected adoption

[GearheadGrrrl]

Perhaps Ford is deliberately hobbling small car sales to get their market share down so the EU will let them sell the EU car biz to or merge with VW Group?

[jpd80]

9 hours ago, GearheadGrrrl said:

Perhaps Ford is deliberately hobbling small car sales to get their market share down so the EU will let them sell the EU car biz to or merge with VW Group?

No it’s much simpler than that. Most of Ford’s cars sales in Europe made no money, they were basically vehicles for dealers to sell and service. The main profit earner in Europe is the Ford Transit, everything centres around that doing well, other vehicle sales basically cover their manufacturing and development costs.

 

What Ford Europe needs to do is reset itself as a brand that sells desirable affordable  electric vehicles, that is the future in Europe.

It basically had to throw away all its diesel vehicle plans and then all its PHEV plans as legislation made them untenable.

[jniffen]

On 7/30/2023 at 2:02 PM, GearheadGrrrl said:

Same here in Minnesota- My lone 4WD vehicle, a '98 Ranger, is sitting all apart and I'm not too motivated to put it back together. Seems a lot of people buy 4WD/AWD to make up for lack of driving skills...

I've been driving for 49 years, driven FWD RWD and AWD in the mid-west to upper states. 
I will take an AWD over the other two for winter driving, especially in deep snow and icy roads any time. 
Have had two accidents (knock wood or rub plastic) and neither was my fault.

I do take insult to the blanket comment . "Seems a lot of people buy 4WD/AWD to make up for lack of driving skills.."

Generalizations such as these doesn't help any discussion, only intensifies heated arguments.

 

I will say I do see a lot of stupid drivers going too fast in bad weather conditions, the 4WD/AWD will reduce the chance of getting stuck, but they won't stop you any quicker.

[DeluxeStang]

22 hours ago, jpd80 said:

What Ford Europe needs to do is reset itself as a brand that sells desirable affordable  electric vehicles, that is the future in Europe.

It basically had to throw away all its diesel vehicle plans and then all its PHEV plans as legislation made them untenable.

It seems like they're on the right track. Ford's European head of design said a few months ago that his main goal is to do away with boring designs and to make future Ford products more opinionated and enthusiast driven. Here's hoping they bring some of that energy to future EVs destined for the N. American market as well.

 

Where Ford truly shines is in affordable aspirational products, something many current EVs don't offer. They're either affordable, or aspirational. If Ford can blend the two when it comes to their EV strategy, they'll be golden. 

[AM222]

On 8/6/2023 at 7:51 AM, jpd80 said:

What Ford Europe needs to do is reset itself as a brand that sells desirable affordable  electric vehicles, that is the future in Europe.

It basically had to throw away all its diesel vehicle plans and then all its PHEV plans as legislation made them untenable.

That's what Stellantis did. They didn't kill the Opel Corsa and Peugeot 208. The new gen models were developed to have BEV versions alongside lower priced ICE models.
The Opel Corsa and Peugeot are in the top 5 in European sales. 


Ford does not have a single model in the European top 15, its best-selling model is the Puma in 17th. A decade ago there were always several Fords in the top 10 and the Fiesta and Focus were always in the top 3.

[GearheadGrrrl]

History teaches us that an automaker like Ford with the fixed expenses of factories and workers capable of cranking out millions of vehicles a year need to have competitive vehicles in every market sector to profit from those factories and workers. Ford used to have that ability and lost it... You can get away with that when your a smaller manufacturer in the most profitable market sectors like Porsche, and even they get help from massive VW Group.

[akirby]

45 minutes ago, GearheadGrrrl said:

History teaches us that an automaker like Ford with the fixed expenses of factories and workers capable of cranking out millions of vehicles a year need to have competitive vehicles in every market sector to profit from those factories and workers. Ford used to have that ability and lost it... You can get away with that when your a smaller manufacturer in the most profitable market sectors like Porsche, and even they get help from massive VW Group.

Ford is getting 10% margins with 2 shifts at some plants.  If they’re only running one shift that’s a problem but this is a transition time with BEVs and there are still parts shortages.

 

They absolutely do not need to build and give away vehicles just to keep a 3rd shift going if there isn’t much profit to be had.  

[Bob Rosadini]

20 hours ago, jniffen said:

I've been driving for 49 years, driven FWD RWD and AWD in the mid-west to upper states. 
I will take an AWD over the other two for winter driving, especially in deep snow and icy roads any time. 
Have had two accidents (knock wood or rub plastic) and neither was my fault.

I do take insult to the blanket comment . "Seems a lot of people buy 4WD/AWD to make up for lack of driving skills.."

Generalizations such as these doesn't help any discussion, only intensifies heated arguments.

 

I will say I do see a lot of stupid drivers going too fast in bad weather conditions, the 4WD/AWD will reduce the chance of getting stuck, but they won't stop you any quicker.

 

Don't be insulted..note poster said.."a lot of people"..I agree...How many times have you been on an interstate, its snowing and some a-hole blows by  you in a new  4 WD or Tahoe, Explorer etc  and before long you catch up to him..and he is in the median.   I in my 64 years of driving in Northeast, have seen many?

[bzcat]

16 hours ago, AM222 said:

That's what Stellantis did. They didn't kill the Opel Corsa and Peugeot 208. The new gen models were developed to have BEV versions alongside lower priced ICE models.
The Opel Corsa and Peugeot are in the top 5 in European sales. 


Ford does not have a single model in the European top 15, its best-selling model is the Puma in 17th. A decade ago there were always several Fords in the top 10 and the Fiesta and Focus were always in the top 3.

 

That's because the sales chart you are looking at ignore commercial vehicles. Ford Europe still has several top 15 vehicles. It's just they are called Transit and Transit Custom instead of Escort and Sierra. Ford is making better margin focusing on the right product than try to keep selling Fiesta. It was a strategic choice. It doesn't matter to Ford if the factory is building a Fiesta or a Transit... but one is profitable and the other one is not. 

[GearheadGrrrl]

Unlike the US market where the Transit faces only token competition in the gas engine van market, the EU is littered with van offerings and profit margins are thin. 

[akirby]

1 hour ago, GearheadGrrrl said:

Unlike the US market where the Transit faces only token competition in the gas engine van market, the EU is littered with van offerings and profit margins are thin

 

 

I think bzcat knows that market better than you.

[rperez817]

32 minutes ago, akirby said:

I think bzcat knows that market better than you.

 

bzcat is this site's resident expert on automotive markets in Europe, Middle East, South America, and Asia/Pacific. Also, jpd80 of course knows the Australia market very well.

[GearheadGrrrl]

3 hours ago, rperez817 said:

 

bzcat is this site's resident expert on automotive markets in Europe, Middle East, South America, and Asia/Pacific. Also, jpd80 of course knows the Australia market very well.

And I respect their wisdom. But much of the van market is cargo vans bought by giant companies and governments and they usually buy the low bidder's van.

[jpd80]

17 hours ago, GearheadGrrrl said:

History teaches us that an automaker like Ford with the fixed expenses of factories and workers capable of cranking out millions of vehicles a year need to have competitive vehicles in every market sector to profit from those factories and workers. Ford used to have that ability and lost it... You can get away with that when your a smaller manufacturer in the most profitable market sectors like Porsche, and even they get help from massive VW Group.

As Mulally taught Ford, a lot of those so called fixed costs are actually variable. Many of the plants you’re referring to actually made little or no money while churning out hundreds of thousands of vehicles a year and that mass production strategy no longer holds up to the test. Raise the price slightly and make fewer vehicles, the savings on resources not used is astonishing.

 

Seriously except for F Series, Transit and Ranger/Bronco/Everest, most of the other vehicles made by Ford barely cover development and production costs. All of that so called market percentage just erodes the profit percentage made on the first three vehicle groups.

Edited August 8, 2023 by jpd80

[rperez817]

11 hours ago, GearheadGrrrl said:

And I respect their wisdom. But much of the van market is cargo vans bought by giant companies and governments and they usually buy the low bidder's van.

 

Thank you GearheadGrrrl. Maybe fleet dumping of vans and other commercial vehicles was less prevalent in Europe than in the U.S. market, pre-pandemic? Nowadays, the Ford Pro business unit globally has moved away from dumping vehicles to the low bidder in any case. Rather than focusing mostly on sales quantity, Ford Pro is taking a firmer stance on vehicle pricing, particularly for BEV vans (E-Transit and Transit Custom Electric). Also, Ford Pro is selling high profit services and software along with vehicles to the giant companies and governments that comprise many of Ford's fleet customers in Europe and U.S.

Edited August 8, 2023 by rperez817

[Sherminator98]

12 hours ago, GearheadGrrrl said:

And I respect their wisdom. But much of the van market is cargo vans bought by giant companies and governments and they usually buy the low bidder's van.

 

In the grand scheme of things how much are they actually being discounted? I'm guessing they aren't getting $5K off a vehicle (unless its something that is well north of 50K)

 

Lets put this way-the difference in price for a Transit Connect retail vs fleet is about $1000 bucks. 

 

Then don't forget that MSRP pricing isn't indicative of actual profit, a base Explorer costs about 36K and a King Ranch starts at almost 20K more, but there is in no way shape or form an additional 20K worth of items in that King Ranch. 

 

Then don't discount the fact that building a large batch of vehicles with the same options is cheaper then building smaller batches.

 

I'm guessing Ford has less issues selling to fleet buyers with making a profit then it does selling to the retail market with incentives etc being factored in. 

[Rick73]

On 8/6/2023 at 10:47 PM, AM222 said:

That's what Stellantis did. They didn't kill the Opel Corsa and Peugeot 208. The new gen models were developed to have BEV versions alongside lower priced ICE models.
The Opel Corsa and Peugeot are in the top 5 in European sales. 


Ford does not have a single model in the European top 15, its best-selling model is the Puma in 17th. A decade ago there were always several Fords in the top 10 and the Fiesta and Focus were always in the top 3.

The Peugeot 208 is a nice size car, and about the smallest I’d want to drive unless everyone else starts driving smaller vehicles first, or else autonomous driving essentially prevents all collisions.

 

It appears Peugeot 208 is available with petrol, diesel, and electric so it covers multiple buyer preferences.  In European testing the gasoline and diesel powertrains are much lower than the US average 405 grams GHGs per mile.  Converting from km to miles places them in roughly 140~170 gm/mile range.  The 208 is probably too small and slow to sell well in US, but who knows considering how many Civics and Corollas are sold every year.

 

[bzcat]

11 hours ago, rperez817 said:

 

Thank you GearheadGrrrl. Maybe fleet dumping of vans and other commercial vehicles was less prevalent in Europe than in the U.S. market, pre-pandemic? Nowadays, the Ford Pro business unit globally has moved away from dumping vehicles to the low bidder in any case. Rather than focusing mostly on sales quantity, Ford Pro is taking a firmer stance on vehicle pricing, particularly for BEV vans (E-Transit and Transit Custom Electric). Also, Ford Pro is selling high profit services and software along with vehicles to the giant companies and governments that comprise many of Ford's fleet customers in Europe and U.S.

 

Huh? When did Ford ever fleet dump vans? By definition, only fleets buy vans in any meaningful volumes so Ford's entire van business is geared towards maximizing margin on fleet sales. Selling van into retail private buyers is the margin killing part of the business, which is why Ford doesn't even try (they haven't offered Club Wagon version of Transit for a reason).

 

I guess retail dumping is a thing if Ford ever tries to sell unwanted vans to retail customers for cheap. But that never happens. Have you actually paid any attention to the transaction price on a van? You may want to do some research on that. This is a business that Ford has figured out and dominates on both sides of Atlantic and contributes significantly to the gross margin. It's such a cornerstone of Ford's profitability that Farley separated into its own profit center (Ford Pro) to highlight its contribution for the investor community. If the van business was all low margin like you imagined, Farley would have killed it like he did with Fiesta.  

[AM222]

On 8/8/2023 at 4:00 AM, bzcat said:

 

That's because the sales chart you are looking at ignore commercial vehicles. Ford Europe still has several top 15 vehicles. It's just they are called Transit and Transit Custom instead of Escort and Sierra. Ford is making better margin focusing on the right product than try to keep selling Fiesta. It was a strategic choice. It doesn't matter to Ford if the factory is building a Fiesta or a Transit... but one is profitable and the other one is not. 

Do you have 2023 European sales chart of Fords in the top 15? Before the pandemic I know the Tourneo vans (passenger versions of the Transit commercial vans in Europe) sold in much lower numbers than the Fiesta, Focus, Puma, and Kuga. Small cars and SUVs/CUVs are still very popular in Europe.

Other carmakers can maintain a full range that include ICE vehicles and BEVs, both cars, SUVs/CUVs, Vans and commercial vehicles and still make a profit in Europe. While Ford has huge losses and has to kill 2 to 3 of its popular models, the Fiesta and soon, the Focus, which might be followed by the Kuga (Escape).

The way I see it, Ford made some bad decisions, particularly the era when they launched the reskinned 2017 Fiesta, 2018 Focus Mk4 and 2020 Escape. This is when Ford really started to drop down the European sales charts.

I really hope the upcoming Puma EV boosts the sales of Ford in Europe. Not sure about the compact Explorer EV though with its estimated starting price of under €45,000 (US$50,000). 

Edited August 9, 2023 by AM222

[Sherminator98]

5 hours ago, AM222 said:

Other carmakers can maintain a full range that include ICE vehicles and BEVs, both cars, SUVs/CUVs, Vans and commercial vehicles and still make a profit in Europe. While Ford has huge losses and has to kill 2 to 3 of its popular models, the Fiesta and soon, the Focus, which might be followed by the Kuga (Escape).

 

But your equating numbers of units sold with being profitable-just take a look at pre 2009 GM as why that didn't work out so well for them. 

 

Using Stellanis as a baseline-most of their profit comes from the US, not the EU. 

 

 

[ice-capades]

11 hours ago, bzcat said:

 

Huh? When did Ford ever fleet dump vans? By definition, only fleets buy vans in any meaningful volumes so Ford's entire van business is geared towards maximizing margin on fleet sales. Selling van into retail private buyers is the margin killing part of the business, which is why Ford doesn't even try (they haven't offered Club Wagon version of Transit for a reason).

 

I guess retail dumping is a thing if Ford ever tries to sell unwanted vans to retail customers for cheap. But that never happens. Have you actually paid any attention to the transaction price on a van? You may want to do some research on that. This is a business that Ford has figured out and dominates on both sides of Atlantic and contributes significantly to the gross margin. It's such a cornerstone of Ford's profitability that Farley separated into its own profit center (Ford Pro) to highlight its contribution for the investor community. If the van business was all low margin like you imagined, Farley would have killed it like he did with Fiesta.  

 

Ford has offered a Transit Wagon ever since the Transit series was introduced in the North American market for the 2015 Model Year.  

[Rick73]

Two million BEV rate in 2026 is also in doubt.  Farley seems to confirm a greater emphasis on hybrids during transition.

 

https://fordauthority.com/2023/08/two-million-ford-ev-production-run-rate-target-now-flexible/

 

“In the meantime, The Blue Oval expects that its Ford Blue ICE division and Ford Pro commercial business will continue to compensate for losses in the Model e EV side of things, particularly given its new focus on hybrids. Farley expects hybrid sales to continue to grow moving forward, and the automaker will keep rolling out new models – such as another Ford F-150 hybrid – though plug-ins don’t seem likely to factor into this expansion.”

[Rick73]

Excluding plug-in hybrids is a bit of a surprise.

 

https://fordauthority.com/2023/08/ford-hybrid-push-apparently-excludes-plug-in-variants/

 

“Yes. I want to make it really clear,” Farley said. “The term hybrid is going to…in our industry going to get a lot more complex. Hybrid could be a serial hybrid with just motor powered batteries. It could be a hybrid in the traditional sense that like the F-150 hybrid, and the hybrids I am referring to are not plug-in hybrids. They are vehicles without a plug.”

[akirby]

1 hour ago, ice-capades said:

 

Ford has offered a Transit Wagon ever since the Transit series was introduced in the North American market for the 2015 Model Year.  

Was he talking about Europe?

[rperez817]

26 minutes ago, Rick73 said:

Excluding plug-in hybrids is a bit of a surprise.

 

If Ford's plan to expand hybrid offerings is for short-term regulatory compliance (which is the only good reason for it), then excluding plug-in hybrids makes sense. As I mentioned in one of the Mustang Mach-E discussion threads, the current crop of PHEV including all of Ford's offerings suffer from the fundamental design flaw of being ICE-dominant, thereby resulting in much lower utilization of electric propulsion in the real world compared to what regulators originally assumed. Regulatory agencies around the world are already clamping down on this, for example, within a couple years, motor vehicle emissions regulations in the EU for PHEV will incorporate real-world measured fuel consumption data, and finance regulations in that region will ban automakers from labelling PHEV as "sustainable investments".

 

The big problem with the current crop of PHEV, including those from Ford, is they are ICE dominant. Research in both U.S. and Europe show that in real world usage, PHEV owners plug in those vehicles much less often than regulators assume. This is not the fault of the PHEV owner, but rather the design inherent to the current crop of PHEV, all of which have less than 50 miles AER. The Real Reason Why No One Ever Plugs In Their Plug-In Hybrid Vehicles (hotcars.com)

 

If automakers had true "extended range electric vehicles" (EREV) that are electric motor dominant with at least 75 miles AER, that could have addressed the transition say 5 years ago as AutoThink recommended (see diagram below). But in the U.S. market, only BMW i3 REx met that criteria, and it was discontinued in 2021. Ford is better off focusing on BEV rather than EREV at this point.