Ford Discusses New Affordable EV Platform

[Rick73]

13 hours ago, jpd80 said:

At this point, I doubt that Ford knows exactly who wants to buy BEVs and what they want…..

Once interest rates started going up and up, it seems like  a lot of buyers lost interest…..

 

I think slowing demand is more about perception than money, though BEV higher costs certainly do not help.  I suppose it’s a combination.

 

IMO early adopters were often devout environmentalist willing to pay a huge price premium, and also willing to sacrifice personally with inconvenience (Leaf type buyers), and at other extreme were fairly rich buyers often wanting to be first on the block to own a BEV out of curiosity and or to draw attention to themselves (initial Tesla type buyers).

 

Fast forward about 15 years and the reality of “zero tailpipe emissions” doesn’t resonate the same as before because the electrical grid is still not as green as environmentalist expected, and at high end of market, owning a BEV is no longer so unique that it warrants attention.  Also, as more information is learned about BEVs in general, including negatives, it places ownership in a different light.

 

Some people try to compare BEV adoption to other products like big-screen TVs or cell phones, but it’s really not the same.  As example, my largest TV is literally 10 times larger (surface area) than my largest tube TV ever was, costs me much less (adjusted for inflation), uses less power, and picture quality is phenomenal.

 

By comparison a BEV purchase today is not a clear-cut decision.  Buyers face much ambiguity which makes it difficult for Ford or any manufacturer to project demand.  Sadly it’s not for lack of trying.

[jpd80]

6 hours ago, Rick73 said:

 

I think slowing demand is more about perception than money, though BEV higher costs certainly do not help.  I suppose it’s a combination.

 

IMO early adopters were often devout environmentalist willing to pay a huge price premium, and also willing to sacrifice personally with inconvenience (Leaf type buyers), and at other extreme were fairly rich buyers often wanting to be first on the block to own a BEV out of curiosity and or to draw attention to themselves (initial Tesla type buyers).

While the decline in BEV sales may have its own reasons, ICE vehicle sales have also declined in

recent months as well. Two things could be happening at the same time but I wonder if most of the

early BEV adopters now have their vehicles and the market now sees true level of interest that’s subject

to higher interest rates and other increased financial pressure.

 

Quote

Fast forward about 15 years and the reality of “zero tailpipe emissions” doesn’t resonate the same as before because the electrical grid is still not as green as environmentalist expected, and at high end of market, owning a BEV is no longer so unique that it warrants attention.  Also, as more information is learned about BEVs in general, including negatives, it places ownership in a different light.

 

Some people try to compare BEV adoption to other products like big-screen TVs or cell phones, but it’s really not the same.  As example, my largest TV is literally 10 times larger (surface area) than my largest tube TV ever was, costs me much less (adjusted for inflation), uses less power, and picture quality is phenomenal.

 

By comparison a BEV purchase today is not a clear-cut decision.  Buyers face much ambiguity which makes it difficult for Ford or any manufacturer to project demand.  Sadly it’s not for lack of trying.

It feels like green politicians think they have more community support than is actually the case

and while most people want power generation and vehicles to evolve to much greener versions,

asking everyone to shoulder that pain of cost immediately (right now) is political suicide.

 

Somewhere along the line, the green train switched from encouraging the many to follow sensible

evolving legislation to targets that industry is saying are not possible in the expected time frame.

To me, more benefits would be had from changing the power generation to solar-wind-batteries

than pushing so hard with BEVs when the distribution grid is just not ready for mass public charging.

 

So relying on green consumerism to get BEV sales going is not really a thing beyond small sales,

people buying efficient gasoline or hybrid have far less issues to contend with, a lot of people 

still see electric vehicles as unnecessary complication away from a simpler lower cost solution

with much less initial outlay……who wants to pay more for BEVs on the promise of future savings

and that’s without considering the inevitable collapse in future resale value of todays BEVs.

Edited March 3 by jpd80

[silvrsvt]

7 hours ago, Rick73 said:

Some people try to compare BEV adoption to other products like big-screen TVs or cell phones, but it’s really not the same.  As example, my largest TV is literally 10 times larger (surface area) than my largest tube TV ever was, costs me much less (adjusted for inflation), uses less power, and picture quality is phenomenal.

 

But EVs normally have much higher performance then ICE cars do also, just because electric motors are generally more power efficient than ICE. The issue is that batteries aren't as power dense as gasoline is. 

[Gurgeh]

12 hours ago, jpd80 said:

While the decline in BEV sales may have its own reasons, ICE vehicle sales have also declined in

recent months as well...

It is important to remember that the "decline in BEV sales" that many talk about is not actually a decline in BEV sales (at least yet), but a decline in the rate of growth in BEV sales. This decline in the rate of growth still had a big impact on automaker plans as most of them had previously fallen for either the hyperbolic projections of EV boosters or at least gave it mouth service (and development money) out of concern for the views of stock traders and out of fear for government regulators. We are still seeing a shift over time toward EVs and away from ICE vehicles, but it won't be as quick as many thought it would be even a year ago. And until we see major improvements in affordable battery technology and EV infrastructure the transition will continue to move forward at a more steady pace.

 

This, from Cox Automotive:

"EV sales in the fourth quarter set a record for both volume and share: 317,168 and 8.1% [market share], respectively. And while records were set, the oft-reported slowdown is real. Q4 EV sales increased year over year by 40% – a strong result by any measure, except when compared to the growth the industry saw in previous quarters. The market posted a 49% gain in Q3, and EV sales were up 52% year over year in Q4 2022. By volume, EV sales in Q4 were higher than in Q3 by roughly 5,000 units. The EV market in the U.S. is still growing, but not growing as fast..." https://www.coxautoinc.com/market-insights/q4-2023-ev-sales/

[Rick73]

3 hours ago, Gurgeh said:

It is important to remember that the "decline in BEV sales" that many talk about is not actually a decline in BEV sales (at least yet), but a decline in the rate of growth in BEV sales.

Important and valid point; though I will add that contrary to what rperez817 insisted many times, the latest data shows that growth is no longer exponential, suggesting BEV adoption rate is not following typical trends of various other technologies and products.  I think 2024 sales will be critical in defining short-term mass adoption rate, at least until more affordable vehicle options are available (unlikely before 2026).

Anyway, the other point worth noting is that overall US BEV sales are still dominated by Tesla, so data can be easily skewed by what they do.  As example, Tesla Model Y alone represents 1/3 of total US BEV market, and Tesla lowered prices to increase volume.  They also started offering the Model Y in RWD single-motor variant to lower price even more.

 

The third vehicle on list, the Chevy Bolt which happens to be one of the most affordable BEVs, had sales growth of over 50% in 2023.  Price obviously plays a huge role in BEV sales. 

 

[jpd80]

13 hours ago, Rick73 said:

Important and valid point; though I will add that contrary to what rperez817 insisted many times, the latest data shows that growth is no longer exponential, suggesting BEV adoption rate is not following typical trends of various other technologies and products.  I think 2024 sales will be critical in defining short-term mass adoption rate, at least until more affordable vehicle options are available (unlikely before 2026).

Anyway, the other point worth noting is that overall US BEV sales are still dominated by Tesla, so data can be easily skewed by what they do.  As example, Tesla Model Y alone represents 1/3 of total US BEV market, and Tesla lowered prices to increase volume.  They also started offering the Model Y in RWD single-motor variant to lower price even more.

 

The third vehicle on list, the Chevy Bolt which happens to be one of the most affordable BEVs, had sales growth of over 50% in 2023.  Price obviously plays a huge role in BEV sales. 

 

And from that table, it should be clear that Tesla’s combined sales account for two thirds of all US sales last year.

Combined sales of all other brands was only about half of Tesla’s sales, that’s the epitome of dominating a market.

It’s no wonder that Ford has around 40,000 unsold BEVs in its inventory.….

[AM222]

On 3/4/2024 at 1:30 PM, jpd80 said:

And from that table, it should be clear that Tesla’s combined sales account for two thirds of all US sales last year.

Combined sales of all other brands was only about half of Tesla’s sales, that’s the epitome of dominating a market.

It’s no wonder that Ford has around 40,000 unsold BEVs in its inventory.….

It's also interesting to point out that the second best-selling BEV is a low sedan that is under 57 inches tall. For reference the last Ford Fusion was 58.2 inches tall.

[akirby]

4 hours ago, AM222 said:

It's also interesting to point out that the second best-selling BEV is a low sedan that is under 57 inches tall. For reference the last Ford Fusion was 58.2 inches tall.

Sedans sell better because they’re cheaper than similar utilities and hatchbacks, not because they’re sedans.

[Rick73]

5 hours ago, AM222 said:

It's also interesting to point out that the second best-selling BEV is a low sedan that is under 57 inches tall. For reference the last Ford Fusion was 58.2 inches tall.

Yeah, the lower height of the Model 3 helps it be the most aerodynamic model according to Tesla, though it doesn’t have the lowest coefficient of drag.  Nevertheless, the lower frontal area combined with fairly low Cd beats all other Teslas, and that leads to lower cost.  Having said that, the Model Y is 64 inches tall, 1.6” wider, and has slightly higher Cd yet it sells better than model 3 in spite of higher cost.  It’s hard to say exactly why that’s the case but I personally think the hatchback design of the Model Y gives it a huge advantage over the Model 3.  The extra 7” of height might help too, but since most people agree it makes Y look worse, height probably doesn’t contribute that much.  Added utility and optional 3rd row probably makes a bigger difference.

 

The New Gen (model 2) is expected to be a smaller version of Model Y, so my guess is height will be between 57 and 64 inches tall, and will likely have a hatch for added utility.  It’s a given it will be considerably narrower than Model 3, so overall frontal area should be about the same or slightly lower even if a little taller.  Anyway, the real key to success from Musk’s point of view is low price, or affordability.  If he’s right, that will apply to all manufacturers, including Ford and GM when they have to compete with sub- $30k BEV.  Quote below shows how important low price is to Tesla.

 

Infinite Demand

 

So, while investors may go away disappointed in the short term, long-term, there is plenty of positives. Musk was asked about the risk of the new affordable car taking away the demand for other Teslas. His answer was very pointed, "demand for our existing vehicles in terms of the desire to own them might as well be infinite. It's indistinguishable from infinite at this point. Affordability is what matters, as you get the car more affordable, demand will go crazy - basically."

[AM222]

15 minutes ago, Rick73 said:

 Having said that, the Model Y is 64 inches tall, 1.6” wider, and has slightly higher Cd yet it sells better than model 3 in spite of higher cost. 

Yes, number one is a CUV/SUV, but with the Model 3 sedan in second place, it still sold a lot more than other BEV crossover and SUVs.

[AM222]

1 hour ago, akirby said:

Sedans sell better because they’re cheaper than similar utilities and hatchbacks, not because they’re sedans.

Yes, more affordable and that is what Ford needs now.

[Rick73]

29 minutes ago, AM222 said:

Yes, number one is a CUV/SUV, but with the Model 3 sedan in second place, it still sold a lot more than other BEV crossover and SUVs.

Completely agree.  There’s room for a variety of vehicles.  Also, I don’t read too much into a single data point like Model 3 because “part” of lower sales compared to Model Y could be due to buyers waiting for Highland refresh which hasn’t quite hit sales numbers yet.

 

Again, IMO affordability is crucial.  Hopefully Ford can design and build an affordable vehicle that is still desirable to the masses in large numbers.  To build a BEV roughly the size of Civic and Corolla with starting price around $30k, while also turning a profit, will not be easy.  More importantly, it will require compromise in order to keep price low.  It can’t be too large, or heavy, or powerful, etc. and still keep price low.  That won’t go over well with many buyers, but resulting affordability is the only way to get the rest to actually buy a BEV.

 

 

[ice-capades]

3 hours ago, akirby said:

Sedans sell better because they’re cheaper than similar utilities and hatchbacks, not because they’re sedans.

 

Yes, selling price is a factor but there are still a lot of customers that simply don't like, want or need the utility of an SUV, CUV and/or don't like the high seating position of SUV/CUV's. As sedan or coupe availability is reduced, those potential customers are forced to move to other brands that offer vehicles that fill their needs, etc.     

[DeluxeStang]

12 minutes ago, ice-capades said:

 

Yes, selling price is a factor but there are still a lot of customers that simply don't like, want or need the utility of an SUV, CUV and/or don't like the high seating position of SUV/CUV's. As sedan or coupe availability is reduced, those potential customers are forced to move to other brands that offer vehicles that fill their needs, etc.     

Exactly, this is especially true with younger consumers. It used to be someone owned a sports car or sedan in their 20s and early 30s. Then they got married, and had kids, and had to upgrade to a larger, more spacious vehicle, usually an SUV or van.

 

But getting married and having kids is rapidly becoming a thing of the past, at least among American youth. Marriage and child birth rates are dropping like a stone, especially amongst younger people. So there's becoming less and less of a need for something with more utility. When you don't need the space of an SUV, and prefer the looks of a sedan or coupe, many people will stick with 

sedans or coupes.

 

Which means that consumers instead of going from sedan to suv are going from sedan to sedan. Ford needs to realize that. Their strategy to focus on utilities made sense 5 years ago. But with changing market preferences, and drastically increasing levels of competition in the two row utility segments killing profits, it's looking more logical to reenter the sedan segment.

[akirby]

24 minutes ago, ice-capades said:

 

Yes, selling price is a factor but there are still a lot of customers that simply don't like, want or need the utility of an SUV, CUV and/or don't like the high seating position of SUV/CUV's. As sedan or coupe availability is reduced, those potential customers are forced to move to other brands that offer vehicles that fill their needs, etc.     

 

I agree to a point, especially on higher priced sedans.  But I think the majority of buyers of mass market mid sized and smaller sedans are buying strictly on price. Nobody buys a Corolla for the driving experience.

[mackinaw]

19 minutes ago, DeluxeStang said:

But getting married and having kids is rapidly becoming a thing of the past, at least among American youth. Marriage and child birth rates are dropping like a stone, especially amongst younger people. So there's becoming less and less of a need for something with more utility. When you don't need the space of an SUV, and prefer the looks of a sedan or coupe, many people will stick with sedans or coupes....

 

But there were still over 3,600,00 births in the US last year.  That's a lot of babies.

[akirby]

9 minutes ago, DeluxeStang said:

Exactly, this is especially true with younger consumers. It used to be someone owned a sports car or sedan in their 20s and early 30s. Then they got married, and had kids, and had to upgrade to a larger, more spacious vehicle, usually an SUV or van.

 

But getting married and having kids is rapidly becoming a thing of the past, at least among American youth. Marriage and child birth rates are dropping like a stone, especially amongst younger people. So there's becoming less and less of a need for something with more utility. When you don't need the space of an SUV, and prefer the looks of a sedan or coupe, many people will stick with 

sedans or coupes.

 

Which means that consumers instead of going from sedan to suv are going from sedan to sedan. Ford needs to realize that. Their strategy to focus on utilities made sense 5 years ago. But with changing market preferences, and drastically increasing levels of competition in the two row utility segments killing profits, it's looking more logical to reenter the sedan segment.

Except that’s not what we’re seeing in sales.  Those people may not have kids but they want active lifestyles so Bronco Sport and Maverick are filling that role.

 

Few mid sized family sedan buyers drive fast enough to appreciate the handling benefits so you’re left with cheap price and style preference.   The first bears little profit and the latter is growing smaller every year.  
 

Can they sell an affordable EV sedan?  Of course.  Depending on price and what else is in the market at the time it might even be decently profitable.  But compare that to an EV Maverick or Bronco sport that might be a bit more expensive or have a bit less range but is far more popular and isn’t selling strictly on price.  Now if you need volume to make a better business case for the platform then maybe you do all 3.

 

Let’s say Ford comes out with a rather bland but cheap EV sedan at $26K.  As soon as somebody else comes out with a $24k sedan those buyers will flip.  In the end it’s the same market model we see with Ice cars today.

[DeluxeStang]

1 hour ago, akirby said:

Except that’s not what we’re seeing in sales.  Those people may not have kids but they want active lifestyles so Bronco Sport and Maverick are filling that role.

 

Few mid sized family sedan buyers drive fast enough to appreciate the handling benefits so you’re left with cheap price and style preference.   The first bears little profit and the latter is growing smaller every year.  
 

Can they sell an affordable EV sedan?  Of course.  Depending on price and what else is in the market at the time it might even be decently profitable.  But compare that to an EV Maverick or Bronco sport that might be a bit more expensive or have a bit less range but is far more popular and isn’t selling strictly on price.  Now if you need volume to make a better business case for the platform then maybe you do all 3.

 

Let’s say Ford comes out with a rather bland but cheap EV sedan at $26K.  As soon as somebody else comes out with a $24k sedan those buyers will flip.  In the end it’s the same market model we see with Ice cars today.

The issue as I see it, if Ford saw the potential for lifestyle oriented compact and midsized utilities, but so has everyone else. Quite a few brands have followed Ford's lead of killing off their passenger cars all together, or reducing investment in them in favor of developing more utilities. Ford beat most of their rivals to the punch, but years on, we're beginning to see a greater number of lifestyle oriented utilities going on sale.

 

I predict we're going to see the same thing happen to the bronco sport and maybe even the maverick that we saw with sedans. Ford's rivals saying "Hey, that's a good idea" developing products to compete. The segment becomes over saturated and hyper competitive, and kills profit margins. We're already seeing it with crossovers. 

 

So 6 years after their announcement to exit passenger cars, the industry has flipped to an extent. When that decision was made, there was a saturation of sedans, with few lifestyle crossovers. Now, the market is saturated with crossovers, with fewer compelling sedan and hatchback offerings. I see opportunity there. If Ford can deliver a desirable EV sedan or hatchback at a truly affordable price, they'll have something literally no-one else in the industry has, at least in the states. 

 

By the time your rivals catch up, you flip the script again. Keep them chasing you, not the other way around. 

[silvrsvt]

20 minutes ago, DeluxeStang said:

The issue as I see it, if Ford saw the potential for lifestyle oriented compact and midsized utilities, but so has everyone else. Quite a few brands have followed Ford's lead of killing off their passenger cars all together, or reducing investment in them in favor of developing more utilities. Ford beat most of their rivals to the punch, but years on, we're beginning to see a greater number of lifestyle oriented utilities going on sale.

 

The issue is that SUV/CUV craze has been going on for almost 30 years now. Trucks and S/CUVs make up over 80% of the total new car sales market at this point-which is influenced by a bunch of different things, like people keeping their cars longer, them being more expensive and people wanting vehicles to be more like a swiss army knife instead of being limited by a coupe or sedan. 

[Deanh]

3 minutes ago, silvrsvt said:

 

The issue is that SUV/CUV craze has been going on for almost 30 years now. Trucks and S/CUVs make up over 80% of the total new car sales market at this point-which is influenced by a bunch of different things, like people keeping their cars longer, them being more expensive and people wanting vehicles to be more like a swiss army knife instead of being limited by a coupe or sedan. 

yep...demand for sedans dwindled some time ago, heck I remember reading even the Accord sales were struggling...obviously lack of sedans is a shame for some people, but Manufacturers have to go where th $ and demand are....

[DeluxeStang]

4 minutes ago, silvrsvt said:

 

The issue is that SUV/CUV craze has been going on for almost 30 years now. Trucks and S/CUVs make up over 80% of the total new car sales market at this point-which is influenced by a bunch of different things, like people keeping their cars longer, them being more expensive and people wanting vehicles to be more like a swiss army knife instead of being limited by a coupe or sedan. 

Fair point, but these things are cyclical. Nothing lasts forever, and that includes consumer preferences and market trends . For almost as long as this trend with suvs and trucks has existed, so has the trend of vehicles getting bigger, and bigger with each generation. That's changing. Things like the maverick and bronco sport have shown that there are hundreds of thousands, if not millions of consumers who are willing to defy that trend by reverting back to smaller vehicles. If one of the most resilient trends in the industry is reversing, I'm confident other ones will begin to as well. 

 

Long standing traditions and buying habits are changing all around us. These kinds of things don't happen overnight generally, but brands still need to plan for them. 

[silvrsvt]

12 minutes ago, DeluxeStang said:

Fair point, but these things are cyclical. Nothing lasts forever, and that includes consumer preferences and market trends . For almost as long as this trend with suvs and trucks has existed, so has the trend of vehicles getting bigger, and bigger with each generation. That's changing. Things like the maverick and bronco sport have shown that there are hundreds of thousands, if not millions of consumers who are willing to defy that trend by reverting back to smaller vehicles. If one of the most resilient trends in the industry is reversing, I'm confident other ones will begin to as well. 

 

Long standing traditions and buying habits are changing all around us. These kinds of things don't happen overnight generally, but brands still need to plan for them. 

 

But the Bronco Sport and Maverick are NOT really small vehicles. They are roughly equivalent to mid or compact sized sedans. I'd consider anything smaller then the BS (like the Chevy Trax or Hyundai Venue) to be small cars. 

 

Just as an example, a 2024 Escape isn't all that much smaller then a OG 1992 Explorer-its about 3 inches shorter and about 6 inches narrower, but not sure if that includes mirrors or not. 

[Captainp4]

Maybe Ford can try minivans or station wagons again to keep everyone on their toes

[mackinaw]

1 hour ago, DeluxeStang said:

Quite a few brands have followed Ford's lead of killing off their passenger cars all together, or reducing investment in them in favor of developing more utilities. Ford beat most of their rivals to the punch, but years on, we're beginning to see a greater number of lifestyle oriented utilities going on sale.......

 

You have to give Sergio credit for that.  Fiat Chrysler stopped selling compact and mid-size sedans back in 2016.  Ford followed suit in 2019.

[akirby]

2 hours ago, DeluxeStang said:

The issue as I see it, if Ford saw the potential for lifestyle oriented compact and midsized utilities, but so has everyone else. Quite a few brands have followed Ford's lead of killing off their passenger cars all together, or reducing investment in them in favor of developing more utilities. Ford beat most of their rivals to the punch, but years on, we're beginning to see a greater number of lifestyle oriented utilities going on sale.

 

I predict we're going to see the same thing happen to the bronco sport and maybe even the maverick that we saw with sedans. Ford's rivals saying "Hey, that's a good idea" developing products to compete. The segment becomes over saturated and hyper competitive, and kills profit margins. We're already seeing it with crossovers. 

 

So 6 years after their announcement to exit passenger cars, the industry has flipped to an extent. When that decision was made, there was a saturation of sedans, with few lifestyle crossovers. Now, the market is saturated with crossovers, with fewer compelling sedan and hatchback offerings. I see opportunity there. If Ford can deliver a desirable EV sedan or hatchback at a truly affordable price, they'll have something literally no-one else in the industry has, at least in the states. 

 

By the time your rivals catch up, you flip the script again. Keep them chasing you, not the other way around. 

Sedans are not coming back.  They’re still dropping.  And Ford can compete with trucks and utilities even in a crowded market.  Just look at full sized trucks.  2.5M sold every year and Ford still owns that market with super high margins.  If anybody can do a Maverick, Bronco or Bronco sport then why haven’t they?