Rick73 Posted October 9, 2023 Share Posted October 9, 2023 4 hours ago, akirby said: Think of it as you just built and staffed and stocked an entire grocery store but you’re only selling cereal. Last month you sold 100 boxes of cereal but your overhead costs were $1M. Did you lose $10k on each box of cereal? No because you lost $1M regardless of whether you sold 100 boxes or 1 box or 1000 boxes. If ford sold twice as many Mach-Es and Lightnings then instead of losing $32K on each one they only lose $$20k. Sell more and it goes down even more. That’s why it’s a bad statistic. You’re apportioning what is essentially fixed overhead (for now ) to each vehicle sold. Any idea what is variable cost for Mach-E at present? I follow you separating out fixed-costs, but how much does it cost Ford to manufacture each additional Mach- E? Or Lightning if you have that cost? Quote Link to comment Share on other sites More sharing options...
akirby Posted October 9, 2023 Share Posted October 9, 2023 12 minutes ago, Rick73 said: Any idea what is variable cost for Mach-E at present? I follow you separating out fixed-costs, but how much does it cost Ford to manufacture each additional Mach- E? Or Lightning if you have that cost? Just guessing based on recent price changes I’d guess they’re losing about 5K gross right now. Quote Link to comment Share on other sites More sharing options...
Rick73 Posted October 9, 2023 Share Posted October 9, 2023 4 hours ago, akirby said: BEVs are here to stay regardless and they will be profitable at some point but it requires a huge investment now to be ready for the future. To do nothing would be suicide. Agree completely, but realistically we can’t expect that all companies that make “huge investment” will survive because of it. I expect legacy manufacturers may have greater probability of survival compared to start-ups, but some may not make it anyway. Quote Link to comment Share on other sites More sharing options...
bzcat Posted October 10, 2023 Share Posted October 10, 2023 (edited) 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. Edited October 10, 2023 by bzcat Quote Link to comment Share on other sites More sharing options...
akirby Posted October 10, 2023 Share Posted October 10, 2023 1 hour ago, bzcat said: 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. It took Tesla over 10 years to turn a profit selling cars. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 10, 2023 Share Posted October 10, 2023 3 hours ago, akirby said: It took Tesla over 10 years to turn a profit selling cars. That’s right and if Ford is spending $50 billion on BEV development/infrastructure, that investment money must come from Ford Blue well into the foreseeable future… Quote Link to comment Share on other sites More sharing options...
Deanh Posted October 10, 2023 Share Posted October 10, 2023 14 hours ago, akirby said: It took Tesla over 10 years to turn a profit selling cars. I wonder if they COULD have survived without financial assistance, tax assistace and Govt intervention...Ill fess...I didnt think they would survive.... Quote Link to comment Share on other sites More sharing options...
CurtisH Posted October 10, 2023 Share Posted October 10, 2023 I added to Lincoln’s numbers for October. We just got a Corsair for my wife. Akirby and I had discussed the Corsair previously and we both thought she would like it . Only took a short test drive for her to decide. 5 Quote Link to comment Share on other sites More sharing options...
akirby Posted October 10, 2023 Share Posted October 10, 2023 22 minutes ago, CurtisH said: I added to Lincoln’s numbers for October. We just got a Corsair for my wife. Akirby and I had discussed the Corsair previously and we both thought she would like it . Only took a short test drive for her to decide. Nice! You’ll love it. Sync 4 is a game changer. Quote Link to comment Share on other sites More sharing options...
CurtisH Posted October 10, 2023 Share Posted October 10, 2023 25 minutes ago, akirby said: Nice! You’ll love it. Sync 4 is a game changer. I haven’t had a chance to delve into it yet. Probably be later this week before I have any free time. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 11, 2023 Share Posted October 11, 2023 National dealer stock levels for Mach E have slowly increased to over 12,000 the trim break out is as follows California Route 1………..731 GT………………………………..3,850 Premium……………….……6,320 Select………………….……..1,276 Of the four trims, it looks like Premuim is harder to shift but that may be because Ford built a lot of them. Quote Link to comment Share on other sites More sharing options...
Rick73 Posted October 11, 2023 Share Posted October 11, 2023 On 10/9/2023 at 10:05 PM, akirby said: It took Tesla over 10 years to turn a profit selling cars. Haven’t Ford tried selling EVs profitably much longer than Tesla? Different attempts ended up in failures for different reasons. If we were to use history as a guide, shouldn’t more Ford failures be expected? I don’t think that’s the case presently, but don’t believe 10 years to profitability means much either. Even Tesla has evolved significantly IMO, so their first 10 years of business is quite different than today. https://insideevs.com/features/342330/ford-electric-cars-past-present-and-future/ Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 11, 2023 Share Posted October 11, 2023 (edited) 50 minutes ago, Rick73 said: Haven’t Ford tried selling EVs profitably much longer than Tesla? Different attempts ended up in failures for different reasons. If we were to use history as a guide, shouldn’t more Ford failures be expected? I don’t think that’s the case presently, but don’t believe 10 years to profitability means much either. Even Tesla has evolved significantly IMO, so their first 10 years of business is quite different than today. https://insideevs.com/features/342330/ford-electric-cars-past-present-and-future/ Ford had an advantage Tesla didn’t in that they could afford to take a short term loss on EVs (I would argue they still can) because the rest of the business is making money. Even now I don’t think Ford has the same level of startup costs as Tesla did since they already have a dozen assembly plants that can be retooled without the added cost of securing the land and building the structures. Sure, Tesla bought NUMMI for a song and that helped but now they have to expand and that’s not easy or cheap. What we’re seeing now out of Ford is its first real attempt to build and sell EVs at scale. The Electric Focus doesn’t really count, it was never really intended to be built and sold in massive numbers. I remember going through long stretches of months without building any back in the day. Edited October 11, 2023 by fuzzymoomoo Quote Link to comment Share on other sites More sharing options...
akirby Posted October 11, 2023 Share Posted October 11, 2023 1 hour ago, Rick73 said: Haven’t Ford tried selling EVs profitably much longer than Tesla? Different attempts ended up in failures for different reasons. If we were to use history as a guide, shouldn’t more Ford failures be expected? I don’t think that’s the case presently, but don’t believe 10 years to profitability means much either. Even Tesla has evolved significantly IMO, so their first 10 years of business is quite different than today. https://insideevs.com/features/342330/ford-electric-cars-past-present-and-future/ Mach-E is the first real production EV. The rest were experiments or prototypes. The point is it takes time to build up infrastructure and ramp up volumes and you shouldn’t expect a profit for several years. Quote Link to comment Share on other sites More sharing options...
Rick73 Posted October 11, 2023 Share Posted October 11, 2023 2 hours ago, fuzzymoomoo said: Ford had an advantage Tesla didn’t in that they could afford to take a short term loss on EVs (I would argue they still can) because the rest of the business is making money. Even now I don’t think Ford has the same level of startup costs as Tesla did since they already have a dozen assembly plants that can be retooled without the added cost of securing the land and building the structures. Sure, Tesla bought NUMMI for a song and that helped but now they have to expand and that’s not easy or cheap. What we’re seeing now out of Ford is its first real attempt to build and sell EVs at scale. The Electric Focus doesn’t really count, it was never really intended to be built and sold in massive numbers. I remember going through long stretches of months without building any back in the day. IIRC, Tesla started out by converting an existing ICE automobile (Lotus Elise) to EV, not by manufacturing an all-new vehicle which helped reduce required investments. A lot of their early efforts were focused on developing and advancing EV-related technologies, so I don’t see a lot of useful parallels between the two companies. The common denominator seems to be that a manufacturer must be able to create a vehicle people want and at a price buyers can afford, and once market is past stage of mostly early adopters, a reasonable price is necessary. Early Tesla buyers definitely wanted their cars, and most being rich could afford them, but probably overpaid for the privilege of having one of the first practical EVs by normal-buyer standards. That’s not sustainable because there aren’t enough ultra-rich people who can splurge like that, plus the EV coolness factor lost some of its appeal. IMO this explains why Tesla’s newer models, the much more affordable 3 and Y, make up most of Tesla sales. In the past Ford and Tesla went about EVs very differently, with different results, so my point was that extrapolating a profitability timeline based on history doesn’t make sense. By the way, price of early Ford EV attempts were so high that there was little real value. IMO a lot comes down to cost/value, and unfortunately there’s also a lot more EV competition today than when Tesla started out. The EV market has potential to get ugly for Ford and others from a profitability standpoint. Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 11, 2023 Share Posted October 11, 2023 10 minutes ago, Rick73 said: By the way, price of early Ford EV attempts were so high that there was little real value. IMO a lot comes down to cost/value, and unfortunately there’s also a lot more EV competition today than when Tesla started out. The EV market has potential to get ugly for Ford and others from a profitability standpoint. That’s very true. When the electric focus came out I remember a lot of people scoffing at the price. Not many willing to pay $40k for a Focus. That was proven again years later with the Focus RS. As badass of a car as it was, paying over $40k for a Focus was still a tough pill to swallow. Quote Link to comment Share on other sites More sharing options...
akirby Posted October 11, 2023 Share Posted October 11, 2023 1 hour ago, Rick73 said: Ford and Tesla went about EVs very differently, with different results, so my point was that extrapolating a profitability timeline based on history doesn’t make sense. Not saying it will take Ford 10 years and Ford does have a lot of cost advantages with their current business and experience. But the part that is the same is that Ford has to start from scratch with building battery plants and dedicated EV assembly plants as well as the new BEV only platforms and other technology. That’s the huge startup costs that every EV mfr has to endure whether it’s Rivian or Ford or GM. It may take 5 years for model E to turn a profit due to all the big startup costs. Quote Link to comment Share on other sites More sharing options...
akirby Posted October 11, 2023 Share Posted October 11, 2023 1 hour ago, fuzzymoomoo said: That’s very true. When the electric focus came out I remember a lot of people scoffing at the price. Not many willing to pay $40k for a Focus. That was proven again years later with the Focus RS. As badass of a car as it was, paying over $40k for a Focus was still a tough pill to swallow. Electric focus was nothing more than a compliance vehicle and lab test. Same for the Ranger. 2 Quote Link to comment Share on other sites More sharing options...
fuzzymoomoo Posted October 11, 2023 Share Posted October 11, 2023 45 minutes ago, akirby said: Electric focus was nothing more than a compliance vehicle and lab test. Same for the Ranger. Which was my earlier point Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 11, 2023 Share Posted October 11, 2023 (edited) Focus. EV was also sold in Europe where it sold poorly for obvious reasons. The fact that Ford was headed in the same direction in early 2017 shows how much Ford’s thinking had to change in order to create the Mach E, whatever they did before just wasn’t working. The Mach E is a good vehicle, it gives Ford a fighting chance against the likes of Tesla Y and VW ID5 and ID5. Hopefully, first attempt at a real mass produced EV will give Ford the knowledge and experience to do much better with next generation products. Edited October 11, 2023 by jpd80 2 Quote Link to comment Share on other sites More sharing options...
akirby Posted October 11, 2023 Share Posted October 11, 2023 24 minutes ago, jpd80 said: Focus. EV was also sold in Europe where it sold poorly for obvious reasons. The fact that Ford was headed in the same direction in early 2017 shows how much Ford’s thinking had to change in order to create the Mach E, whatever they did before just wasn’t working. The Mach E is a good vehicle, it gives Ford a fighting chance against the likes of Tesla Y and VW ID5 and ID5. Hopefully, first attempt at a real mass produced EV will give Ford the knowledge and experience to do much better with next generation products. You’re missing the point. They were never actually trying with the focus EV and Ranger EV. They were only done for compliance reasons and PR. 2 Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 11, 2023 Share Posted October 11, 2023 14 minutes ago, akirby said: You’re missing the point. They were never actually trying with the focus EV and Ranger EV. They were only done for compliance reasons and PR. The reason that EV sales have increased so much in China and Europe is exactly because of moving government regulation, the need is still there to make vehicles that comply with all the zero emission regulations that are being implemented. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 11, 2023 Share Posted October 11, 2023 Also, Mark Fields lead Bill Ford to believe that Ford was doing more with Electric vehicles that it actually was, the leader ultimately dispatching the CEO for a series of missteps but not moving the needle on EVs was a big one. Quote Link to comment Share on other sites More sharing options...
Deanh Posted October 11, 2023 Share Posted October 11, 2023 39 minutes ago, jpd80 said: The reason that EV sales have increased so much in China and Europe is exactly because of moving government regulation, the need is still there to make vehicles that comply with all the zero emission regulations that are being implemented. begs the question...Chinas building a Coal powered Power plant every 2 weeks.....LMAO.... Quote Link to comment Share on other sites More sharing options...
jpd80 Posted October 12, 2023 Share Posted October 12, 2023 (edited) 10 hours ago, Deanh said: begs the question...Chinas building a Coal powered Power plant every 2 weeks.....LMAO.... LOL, all those masses of BEVs sold look like a tiny fig leaf on a big ugly carbon polluter…… Not an excuse but this is one explaination. Quote https://www.npr.org/2023/03/02/1160441919/china-is-building-six-times-more-new-coal-plants-than-other-countries-report-fin What's driving the new permitting of Chinese coal plants? The report authors found the growth of new coal plant permitting appears to be a response to ongoing drought and last summer's historic heat wave, which scientists say was made more likely because of climate change. The heat wave increased demand for air conditioning and led to problems with the grid. The heat and drought led rivers to dry up, including some parts of the Yangtze, and meant less hydropower. "We're seeing sort of this knee-jerk response of building a lot more coal plants to address that," says Champenois. High prices for liquified natural gas due to the war in Ukraine also led at least one province to turn to coal, says Aiqun Yu, co-author of the report and senior researcher at Global Energy Monitor. Even though China is growing its coal fired grid, the renewals are actually capping what would be an even worse result of that 8.5 petawatt hours total produced, coal accounts for roughly 5 petawatt hours while renewables are around 3.5 petawatt hours. See, this is what happens when rich multinationals export all their noxious industries to another country, they get to claim they’re clean and green while the west keeps chastising China for takin all their Jebs….. https://en.wikipedia.org/wiki/Electricity_sector_in_China Edited October 12, 2023 by jpd80 Quote Link to comment Share on other sites More sharing options...
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