Farley Says Boring Vehicles Are Going Away

[akirby]

30 minutes ago, Tico said:

The problem for Ford is once they buy Chevy or Honda or Toyota they are much more likely to go back there if they are ever in a position to buy up to something more expensive.

Thats an urban myth nowadays.  Very little brand loyalty and an exciting vehicle will bring lots of conquest buyers.  
 

Why didn’t they order a base Maverick?  $28k out the door.

[ScottLeonard]

To the idea that it's time for the company to stop producing too expensive cars. A long time ago I concluded that if you calculate the cost of a car based only on its components, the price will sometimes be reduced by one and a half times, and sometimes by half. The other part of the amount is the brand. This applies not only to cars.
Of course, there are things in which it is worth paying for a brand, but today, it is quite possible to find a product of an unknown brand that will not be much inferior in convenience, quality, etc. to popular brands.
Some people may not like this idea, but just think: yes, big brands offer quality products with many features, but how many features do you always use and would you feel the difference if these features were simplified?

[silvrsvt]

12 minutes ago, ScottLeonard said:

Some people may not like this idea, but just think: yes, big brands offer quality products with many features, but how many features do you always use and would you feel the difference if these features were simplified?

 

Lets see-I owned a 2013 SHO that was basically a "luxury" car and now own what is basically an entry level Bronco. 

 

The biggest difference between the two feature/option wise is the lack of leather/alcantara seating surfaces, lack of powered/cooled seats and a heated steering wheel. The Bronco actually has more driver protection (aka Auto braking) that wasn't even an option the model SHO I got. 

 

In the grand scheme of things, I really don't miss the above-I once I set the seat I don't touch it again and if my wife actually drives it, it's far easier to move the seat back since she's shorter than me with a manual seat. 

EVs are going to offer even less in options because there is an expectation to have all the safety and amenities built in already, so there is no real option to upcharge people for them going forward, outside of maybe something like blue cruise.

[Captainp4]

34 minutes ago, akirby said:

Oh please Tesla has never been about affordability until the last year or so.  Model S and X were super expensive.

3/y made BEV affordable for a lot of people, they started with the high end cars to make enough money to develop the less expensive ones and have done an incredible job of increasing manufacturing efficiency and lowering part count to be able to have the margins they have, even while reducing prices. "The best part is no part, the best process is no process". I think Farley mentioned in a presentation trying to emulate that not that long ago, eliminating or consolidating parts - if they don't perform at least 3 tasks in one needs a redesign or something like that. Maybe Ford could make money on the boring lower end products while maintaining margins if more effort was put into efficiency on the design/manufacturing side? and maybe even higher margins on the higher end products or even room to adjust pricing to meet demand?

[akirby]

19 minutes ago, Captainp4 said:

3/y made BEV affordable for a lot of people, they started with the high end cars to make enough money to develop the less expensive ones and have done an incredible job of increasing manufacturing efficiency and lowering part count to be able to have the margins they have, even while reducing prices. "The best part is no part, the best process is no process". I think Farley mentioned in a presentation trying to emulate that not that long ago, eliminating or consolidating parts - if they don't perform at least 3 tasks in one needs a redesign or something like that. Maybe Ford could make money on the boring lower end products while maintaining margins if more effort was put into efficiency on the design/manufacturing side? and maybe even higher margins on the higher end products or even room to adjust pricing to meet demand?

I’m not knocking their business model just don’t make it sound like they’re being good guys making affordable vehicles.  3/Y are still pushing $40K+  and don’t forget they raised prices during Covid just like everyone else - up to $8K on some models.  Theyre going after the lower end now with the 2 because it’s the only way to expand their market share not because they’re helping buyers.

[Rick73]

25 minutes ago, akirby said:

Oh please Tesla has never been about affordability until the last year or so.  Model S and X were super expensive.

I stand by what I said, because I purposely added “at given time” for proper context.  When a cousin of mine paid about $100k for one of the first Model S with largest available battery about 10 years ago, he got around 270 miles of range (IIRC) which was considered outstanding for any electric car. A couple of years ago he traded for a newer Model S with just over 400 miles of range and it costs the same +/- $100k, which adjusted for inflation is much cheaper.

 

Battery costs have come down considerably during that period, which combined with lighter weight and greater drivetrain efficiency, allowed Tesla to design the “budget” RWD Model 3 which relies on a much smaller battery and goes for about $40k.  Once Tesla established brand image with luxury and expensive Model S, they were able to move down market with Model 3.

 

Natural progression should lead Tesla’s next step to anticipated Model 2, the “people’s electric car” as some have referred to a $25k BEV (I’d be surprised if much under $30k).  I know anyone can buy a cheap Chevy Bolt for about same price,  but it’s not the same.

 

[Tico]

54 minutes ago, akirby said:

Thats an urban myth nowadays.  Very little brand loyalty and an exciting vehicle will bring lots of conquest buyers.  
 

Why didn’t they order a base Maverick?  $28k out the door.

Becuase the tranny finally blew up on their Focus and they needed a car ASAP.

[jpd80]

1 hour ago, akirby said:

Oh please Tesla has never been about affordability until the last year or so.  Model S and X were super expensive.

This.

People often forget that Tesla couldn’t make a profit from its vehicles until it raised the price of the 3

or more correctly, refused to make the base version, forcing buyers to take a +$40k version instead.

The Y built on that, right vehicle at the right time, basically took over as the main sales driver….

 

I also noticed that Tesla has significantly lowered the prices of the S & X….did I see correctly, $79k?
If so, that’s like $30k less, maybe orders dried up that much it had to reposition the price down.

 

Sorry, home with bad flu symptoms and now covid positive so acting out in delium,

I don’t even remember my recent posts last night, babbling lunatic?

Edited January 23 by jpd80

[rmc523]

11 minutes ago, jpd80 said:

This.

People often forget that Tesla couldn’t make a profit from its vehicles until it raised the price of the 3

or more correctly, refused to make the base version, forcing buyers to take a +$40k version instead.

 

I also noticed that Tesla has significantly lowered the prices of the S & X….did I see correctly, $79k?
If so, that’s like $30k less, maybe orders dried up that much it had to reposition the price down.

 

Sorry, home with bad flu symptoms and now covid positive so acting out in delium,

I don’t even remember my recent posts last night, babbling lunatic?

 

Orders probably dried up because they haven't been redesigned in 10-15 years lol.

 

 

---

 

I think others have had good debates on products - the key is inciting passion within people about the product - someone said it well above - "I want that vs. sure if you discount it"

 

the key will be recreating that over the whole lineup - it's a shame they couldn't replicate Maverick's process on a new model (or say, a redesign for Escape).

[akirby]

1 hour ago, Rick73 said:

I stand by what I said, because I purposely added “at given time” for proper context.  When a cousin of mine paid about $100k for one of the first Model S with largest available battery about 10 years ago, he got around 270 miles of range (IIRC) which was considered outstanding for any electric car. A couple of years ago he traded for a newer Model S with just over 400 miles of range and it costs the same +/- $100k, which adjusted for inflation is much cheaper.

 

Battery costs have come down considerably during that period, which combined with lighter weight and greater drivetrain efficiency, allowed Tesla to design the “budget” RWD Model 3 which relies on a much smaller battery and goes for about $40k.  Once Tesla established brand image with luxury and expensive Model S, they were able to move down market with Model 3.

 

Natural progression should lead Tesla’s next step to anticipated Model 2, the “people’s electric car” as some have referred to a $25k BEV (I’d be surprised if much under $30k).  I know anyone can buy a cheap Chevy Bolt for about same price,  but it’s not the same.

 

 

You’re confusing “less expensive” and “efficient” with affordable.  Affordable to me is < $30k.  They’ve only lowered prices when forced due to competition.  Yes they’re very efficient and the model 2 may be affordable but it will be the first.

[jpd80]

1 hour ago, Rick73 said:

I stand by what I said, because I purposely added “at given time” for proper context.  When a cousin of mine paid about $100k for one of the first Model S with largest available battery about 10 years ago, he got around 270 miles of range (IIRC) which was considered outstanding for any electric car. A couple of years ago he traded for a newer Model S with just over 400 miles of range and it costs the same +/- $100k, which adjusted for inflation is much cheaper.

 

Battery costs have come down considerably during that period, which combined with lighter weight and greater drivetrain efficiency, allowed Tesla to design the “budget” RWD Model 3 which relies on a much smaller battery and goes for about $40k.  Once Tesla established brand image with luxury and expensive Model S, they were able to move down market with Model 3.

 

Natural progression should lead Tesla’s next step to anticipated Model 2, the “people’s electric car” as some have referred to a $25k BEV (I’d be surprised if much under $30k).  I know anyone can buy a cheap Chevy Bolt for about same price,  but it’s not the same.

 

I’d take the $25k price for Tesla 2 as a grain of salt, that’s the low ball estimate to get reservations rolling

and then the switch comes because they have so many orders, they just want to build the +$30k versions…

We've seen this dance before…..

 

Tesla talks a good game on increased efficiency bringing down prices but the 2 also represents competing interests of increasing build numbers vs reduced actual  profit per vehicle versus the 3 & Y.

 

. It also assumes that many 3 an Y customers won’t switch to the smaller 2. If that happens the economic dynamics change massively, internal competition is the last thing that Tesla needs.

 

So, this will either be unbelievably good for Tesla or it will be the product sees Teslas profits begin  level out at VW / Toyota amounts. Mind you, replacing a ton of your competitors’ sales could be more life changing to their companies….

 

Sorry, not well today, I hope you can sift through my post and see the thought process..

Edited January 23 by jpd80

[Captainp4]

1 hour ago, akirby said:

I’m not knocking their business model just don’t make it sound like they’re being good guys making affordable vehicles.  3/Y are still pushing $40K+  and don’t forget they raised prices during Covid just like everyone else - up to $8K on some models.  Theyre going after the lower end now with the 2 because it’s the only way to expand their market share not because they’re helping buyers.

Their stated goals indicate they are the good guys, whether you like Musk or not or even agree with how he thinks he's helping, the "master plan" lays out the goal to convert the world to sustainable auto and they've met or exceeded every goal they stated. Whether you believe it's for the good of humanity or a money grab is on the person watching or reading, I've watched enough of Musk to believe him but I understand if you don't.. and even if you don't Tesla has laid out the blueprint on how to do it and make money for "legacy auto". Either way, I personally believe they are the good guys, but even if they aren't they're still doing it better than Ford on the BEV design and manufacturing end.

Model 2 I'm skeptical about after waiting 4 years for the cybertruck to cost twice as much and have half the range promised with 3k lbs less towing. Holding a reservation for cybertruck, but been looking at the lightning lately and it seems like a better truck right now.

[akirby]

27 minutes ago, Captainp4 said:

Their stated goals indicate they are the good guys, whether you like Musk or not or even agree with how he thinks he's helping, the "master plan" lays out the goal to convert the world to sustainable auto and they've met or exceeded every goal they stated. Whether you believe it's for the good of humanity or a money grab is on the person watching or reading, I've watched enough of Musk to believe him but I understand if you don't.. and even if you don't Tesla has laid out the blueprint on how to do it and make money for "legacy auto". Either way, I personally believe they are the good guys, but even if they aren't they're still doing it better than Ford on the BEV design and manufacturing end.

Model 2 I'm skeptical about after waiting 4 years for the cybertruck to cost twice as much and have half the range promised with 3k lbs less towing. Holding a reservation for cybertruck, but been looking at the lightning lately and it seems like a better truck right now.

I didn’t say anything about the company’s goals or motivation.  I only objected to classifying their vehicles up to now as affordable.

 

 

[Captainp4]

27 minutes ago, akirby said:

I didn’t say anything about the company’s goals or motivation.  I only objected to classifying their vehicles up to now as affordable.

 

 

I guess I misunderstood, and things have been volatile in the last few years, but I'd consider 3/y affordable currently and in the last few years. Not entry level cheap, but on par with what mostly sells.

[Rick73]

39 minutes ago, jpd80 said:

I’d take the $25k price for Tesla 2 as a grain of salt, that’s the low ball estimate to get reservations rolling

and then the switch comes because they have so many orders, they just want to build the +$30k versions…

We've seen this dance before…..

 

Tesla talks a good game on increased efficiency bringing down prices but the 2 also represents competing interests of increasing build numbers vs reduced actual  profit per vehicle versus the 3 & Y.

 

. It also assumes that many 3 an Y customers won’t switch to the smaller 2. If that happens the economic dynamics change massively, internal competition is the last thing that Tesla needs.

 

So, this will either be unbelievably good for Tesla or it will be the product sees Teslas profits begin  level out at VW / Toyota amounts. Mind you, replacing a ton of your competitors’ sales could be more life changing to their companies….

 

Sorry, not well today, I hope you can sift through my post and see the thought process..

Hope you feel better soon, Covid can be a real pain.

 

A while back I mentioned same issue that a lower-cost Tesla Model 2 “could” compete with Models 3 and Y and cannibalize some of their volume, but depending on Model 2 and how it’s priced, it may not be all that bad.  If new Model 2 ends up being significantly smaller and lower-price than 3/Y, then it may not compete as directly.  I don’t see it much different than Corolla versus Camry, or Civic versus Accord.

 

I think that when Model 3 first came out it competed much more directly with Model S because they are fairly close in size (by my definition), it had plenty of range to meet most needs anyway, even with smaller battery, and was priced almost 50% lower.  No wonder Models S and X have very little volume left (one report I saw had them at 3% though I don’t know accuracy).

 

If entry-level Model 2 is small enough and (energy) efficient enough to allow price below $30k with about same margin as a $40K RWD Model 3, then losing a few 3/Y buyers to Model 2 would not hurt Tesla bottom line that much.  The question is whether they can reduce costs (to build it) by that much and still deliver a car with enough function and range that buyers will pay up to $30k?  I think they can if they keep it small, aero, and utilitarian as Musk implied or has stated.  I think it needs to be no larger than a Civic or Corolla.

[jpd80]

5 hours ago, Rick73 said:

Hope you feel better soon, Covid can be a real pain.

False positive, just a bad flu but still going through all the tests,

got a couple of days off and then Friday is a public holiday for us so all good…

 

 

5 hours ago, Rick73 said:

 

A while back I mentioned same issue that a lower-cost Tesla Model 2 “could” compete with Models 3 and Y and cannibalize some of their volume, but depending on Model 2 and how it’s priced, it may not be all that bad.  If new Model 2 ends up being significantly smaller and lower-price than 3/Y, then it may not compete as directly.  I don’t see it much different than Corolla versus Camry, or Civic versus Accord.

There is a difference in that Tesla buyers are prepared to pay a premium price to get what they want.

So if a fair portion of those sales are people lent to buying a subcompact 2 then that might create

a bit of a dilemma.

 

Put it this way, if the 3 had been a smaller utility that fits below the Y, then there would have been

no need for the 2 because it would already be in place…..the compact sedan 3 is acting as a

Tesla 2 substitute but one priced high enough to stop more subcompact buyers switching.

 

Quote

 

I think that when Model 3 first came out it competed much more directly with Model S because they are fairly close in size (by my definition), it had plenty of range to meet most needs anyway, even with smaller battery, and was priced almost 50% lower.  No wonder Models S and X have very little volume left (one report I saw had them at 3% though I don’t know accuracy).

I kind of disagree with the 3 vs S competition in a way…

The 3 is small enough to not disturb the S market buyers…however, the price difference when released was nearly double which would have swayed quite a few buyers thinking that the 3 would be enough car, I think the Y is a more of a threat.

 

It’s an interesting thought though, the more models Tesla adds, the less pure the sales become as buyers have more choice. Looking at S & X, I’m wondering if expanding the sizes of 3 and Y as larger replacements would be on the cards. The newer, younger compacts show the way with improved construction which could see new S and X permanently lower prices…..

 

Quote

 

If entry-level Model 2 is small enough and (energy) efficient enough to allow price below $30k with about same margin as a $40K RWD Model 3, then losing a few 3/Y buyers to Model 2 would not hurt Tesla bottom line that much.  The question is whether they can reduce costs (to build it) by that much and still deliver a car with enough function and range that buyers will pay up to $30k?  I think they can if they keep it small, aero, and utilitarian as Musk implied or has stated.  I think it needs to be no larger than a Civic or Corolla.

The 2 is a subcompact so more Yaris sized…

I dunno, Tesla’s idea of an affordable subcompact could be different to what we expect but either way, adding choices at the bottom end while grabbing a ton of new sales, could also see quite a few 3 sales conquested, will be interesting….

 

 

 

Edited January 24 by jpd80

[Rick73]

1 hour ago, jpd80 said:

The 2 is a subcompact so more Yaris sized…

I dunno, Tesla’s idea of an affordable subcompact could be different to what we expect but either way, adding choices at the bottom end while grabbing a ton of new sales, could also see quite a few 3 sales conquested, will be interesting….

We “may” get a bit more information regarding Model 2 tomorrow afternoon or evening during Tesla earnings day.  Article below mentions retail investors in particular, but I hope institutional investors also question plans for Model 2.  Tesla may not reveal anything new though.

 

https://www.morningstar.com/news/marketwatch/20240123185/heres-the-no-1-question-retail-investors-want-tesla-to-answer-ahead-of-earnings
 

I would be surprised if Model 2 is as small as Toyota Yaris, thinking it should be a bit larger than that.  Model 3 is 186 inches long, with Model S at 198 inches (12” longer).  Yaris is listed at 162 inches long, making it 24” shorter than Model 3 (that’s quite smaller).  Yaris is also a bit narrower at 67 inches wide. 

 

I personally hope you’re correct about Tesla Model 2 being the size of Yaris, but believe that would be a huge mistake for Tesla.  I think Model 2 will be closer to Corolla or Civic in interior space, making the outside a little smaller due to BEV packaging advantage.

[AM222]

On 1/20/2024 at 8:38 AM, Rick73 said:

Hypothetically, how would a more-basic lower-cost Maverick sell, even if priced with equal margin?  Toyota, for example, has a base RAV4 or Camry with 2.5L NA FWD powertrain.  They offer AWD and hybrids (like Maverick), but also offer an even lower-cost base trim..  What would happen if Ford offered an even lower cost boring Maverick (holding profitability constant)?

More affordable doesn't need to be stripped-down and boring.
Ford probably should have made a Focus-based crossover that could slot below the Escape-Kuga. 

That's pretty much what the Corolla Cross is, it's a crossover based on the C-segment Corolla hatchback and positioned below the Rav4. 


Profitability is always brought up when the subject is about Ford and smaller affordable models. How do rivals do it? Volume. They sell the same vehicle in many markets globally. Ford's only true global volume model now is the Ranger. The Mustang would probably count too but in many markets, it's considered a niche low volume model.

[jpd80]

6 hours ago, Rick73 said:

I would be surprised if Model 2 is as small as Toyota Yaris, thinking it should be a bit larger than that.  Model 3 is 186 inches long, with Model S at 198 inches (12” longer).  Yaris is listed at 162 inches long, making it 24” shorter than Model 3 (that’s quite smaller).  Yaris is also a bit narrower at 67 inches wide. 

 

I personally hope you’re correct about Tesla Model 2 being the size of Yaris, but believe that would be a huge mistake for Tesla.  I think Model 2 will be closer to Corolla or Civic in interior space, making the outside a little smaller due to BEV packaging advantage.

Corolla sized interior would make the Tesla 2 a compact vehicle, I don’t think that’s the aim of that vehicle

 

Another vehicle size to consider is Puma - approx 165” long x 71” wide, that may be a better sizing scope for the 2

as the Yaris Utility is a bit smaller than that, I didn’t realise the width was still that narrow…

 

Just thinking that if the 2 ends up only a couple of inches narrower but a far bit shorter than the Y then that

may be all the differentiation the 2 needs..On the other hand if it just a tad smaller that may encourage more

internal sales conquesting…..it’s a tricky one.

Edited January 24 by jpd80

[jpd80]

3 hours ago, AM222 said:

More affordable doesn't need to be stripped-down and boring.
Ford probably should have made a Focus-based crossover that could slot below the Escape-Kuga. 

That's pretty much what the Corolla Cross is, it's a crossover based on the C-segment Corolla hatchback and positioned below the Rav4. 


Profitability is always brought up when the subject is about Ford and smaller affordable models. How do rivals do it? Volume. They sell the same vehicle in many markets globally. Ford's only true global volume model now is the Ranger. The Mustang would probably count too but in many markets, it's considered a niche low volume model.

If you think about it, the Focus Active was about as far as Ford wanted to go with a Focus crossover.

Jacking up the ride height a tad and those plastic wheel arches was the limit without impinging on Escape.

 

I agree with you in that Ford should have done more to counter the competition but it looked like

their hearts weren’t really in it which is sad because there was a lot of potential there…

 

Maybe the Puma was also thee but probably the preferred small utility?
Ford seems to force an either/or choice instead of both options…

 

[AM222]

1 hour ago, jpd80 said:

If you think about it, the Focus Active was about as far as Ford wanted to go with a Focus crossover.

Jacking up the ride height a tad and those plastic wheel arches was the limit without impinging on Escape.

 

I agree with you in that Ford should have done more to counter the competition but it looked like

their hearts weren’t really in it which is sad because there was a lot of potential there…

 

Maybe the Puma was also thee but probably the preferred small utility?
Ford seems to force an either/or choice instead of both options…

 

Instead of killing the Focus, maybe Ford should evolve the range into something like a Focus Active but with better integrated SUV styling cues. Something a tad taller and more muscular.

If you think about it, the new C-segment Chevy Trax is essentially a crossover replacement for the Cruze. 

Edited January 24 by AM222

[silvrsvt]

2 hours ago, AM222 said:

If you think about it, the new C-segment Chevy Trax is essentially a crossover replacement for the Cruze. 

Not really because you have the Equinox at the higher end (Escape sized) and the Trailblazer (Bronco Sport sized) above it. 

[akirby]

6 hours ago, AM222 said:

More affordable doesn't need to be stripped-down and boring.
Ford probably should have made a Focus-based crossover that could slot below the Escape-Kuga.

That’s Bronco Sport - they just gave it Bronco styling and off road chops to justify a higher price and less direct competition.

[AM222]

17 minutes ago, silvrsvt said:

Not really because you have the Equinox at the higher end (Escape sized) and the Trailblazer (Bronco Sport sized) above it. 

Unlike the larger Equinox and the shorter Trailblazer, the new Trax is lower and more car-like. 

2024 Chevy Trax length x width x height: 178.6in x 71.7in x 61.4in, wheelbase: 106.3in
2019 Chevy Cruze hatchback length x width x height: 175.3in x 70.5in x 57.7in, wheelbase: 106.3in
2019 Chevy Cruze sedan length x width x height: 183.7in x 70.5in x 57.4in, wheelbase: 106.3in

2022 Chevy Trailblazer length x width x height: 173.5in x 71.2in x 65.2in, wheelbase: 103.9in

[AM222]

56 minutes ago, akirby said:

That’s Bronco Sport - they just gave it Bronco styling and off road chops to justify a higher price and less direct competition.

Ford needs something like the new Chevy Trax, a C-segment crossover that starts under $22,000 (including Destination). It literally fills the spot the C-segment Chevy Cruze sedan and hatchback left. 

The 2024 Ford Escape Active FWD starts at $31,635 (including Destination)
The 2024 Ford Bronco Sport Big Bend starts at $33,470 (including Destination)

In 2019, these were the starting prices of the Flex and Explorer.

Edited January 24 by AM222