FARLEY SAYS FORD EVS WILL HAVE ‘HYBRID PREMIUM’ PRICING

[silvrsvt]

https://fordauthority.com/2024/03/farley-says-ford-evs-will-have-hybrid-premium-pricing/

 

“And so I think we’re just running into the reality. And as far as our future business plan, we have now, since the middle of last year, have assumed that we have to basically sell an EV at a hybrid premium. There is no more money for customers than that. $3,000 to $5,000, that’s it. And I think that is the right way to approach it.”

 

“So that turns out that in this next cycle of EVs, some of our competitors don’t have the advantage of changing their next generation. We do, thankfully, got a little bit lucky on the timing. When we made that decision last year, it forced a lot of pivots. For our bigger vehicles that are in generic segments like a Mach-E or a three-row crossover, we’re like, whoa, hybrid premium only. We got to think about this. I’m not going to launch any vehicle if I can’t make money on it, in the first 12 months. That required a lot of change.”

[joseodiaga4]

27 minutes ago, silvrsvt said:

https://fordauthority.com/2024/03/farley-says-ford-evs-will-have-hybrid-premium-pricing/

 

 

 

sooo what's the plan? keep postponing the 3-rows or finally a debut. I have to admit that it is unbelievable that a couple years ago the plan was to have a lot of EVs. In this time Ford haven't figure it out yet?

 

Maybe it is my ignorance about the NA market but I keep reading about Tesla selling a ton o vehicles (also here in EU) but why it is so hard for the other automakers?

  

[DeluxeStang]

5 minutes ago, joseodiaga4 said:

sooo what's the plan? keep postponing the 3-rows or finally a debut. I have to admit that it is unbelievable that a couple years ago the plan was to have a lot of EVs. In this time Ford haven't figure it out yet?

 

Maybe it is my ignorance about the NA market but I keep reading about Tesla selling a ton o vehicles (also here in EU) but why it is so hard for the other automakers?

  

Electric vehicle adoption in the states isn't happening as quickly as most brands projected. Ford is making the right call by pushing their EVs back by a few years, more consumers will be interested in 3-5 years time and beyond. The challenge is pushing the products back far enough for interest in EVs to grow. But not pushing them back so much that they cease to be competitive. 

[silvrsvt]

5 hours ago, joseodiaga4 said:

sooo what's the plan? keep postponing the 3-rows or finally a debut.

 

Well Farley comments make a bit more sense now...it appears that the 3 Row EVs will be priced around what a higher end Explorer/Aviator would be with a say a 5K upcharge on them. That would explain why the P/HEV models where dropped during the refresh-to help push people to the 3 row EVs.

 

The 3 row EV delays where due to COVID and other things....plus I think reporting was conflagiting them with the MEB Explorer in the EU that will launch in the summer. 

[jpd80]

6 hours ago, silvrsvt said:

 

Well Farley comments make a bit more sense now...it appears that the 3 Row EVs will be priced around what a higher end Explorer/Aviator would be with a say a 5K upcharge on them. That would explain why the P/HEV models where dropped during the refresh-to help push people to the 3 row EVs.

 

The 3 row EV delays were due to COVID and other things....plus I think reporting was conflagiting them with the MEB Explorer in the EU that will launch in the summer. 

At the time, there were two reasons given for delaying the three row BEV:

1. To give Mach E enough production volume as supplying Europe and North America

2. To give Lightning enough battery supply to cover anticipated sales based on 200K reservations

Before redesign of the three row twins, Ford was courting the idea of the Ford being a BEV Explorer

but then redesigned the thing away form boxy SUV to be a Tesla X type vehicle with better efficiency

and good chance of commanding a price above $70,000……or roughly $10,000 less than Tesla X, Ouch.

 

[Rick73]

If Farley is saying that equivalent BEV must cost no more than $3,000 to $5,000 more than ICE counterpart while making a profit, it will be interesting to see how that’s achieved.  Price parity has been discussed for years, but remains an elusive goal.  Less than $5,000 is getting close if they can pull it off. 

[silvrsvt]

8 minutes ago, Rick73 said:

If Farley is saying that equivalent BEV must cost no more than $3,000 to $5,000 more than ICE counterpart while making a profit, it will be interesting to see how that’s achieved.  Price parity has been discussed for years, but remains an elusive goal.  Less than $5,000 is getting close if they can pull it off. 

 

The biggest issue is with battery costs, which have been dropping. Otherwise EVs are easier/cheaper to build then their ICE equivalent 

 

https://about.bnef.com/blog/lithium-ion-battery-pack-prices-hit-record-low-of-139-kwh/

 

The industry continues to switch to the low-cost cathode chemistry known as lithium iron phosphate (LFP). These packs and cells had the lowest global weighted-average prices, at $130/kWh and $95/kWh, respectively. This is the first year that BNEF’s analysis found LFP average cell prices falling below $100/kWh. On average, LFP cells were 32% cheaper than lithium nickel manganese cobalt oxide (NMC) cells in 2023

 

Technological innovation and manufacturing improvement should drive further declines in battery pack prices in the coming years, to $113/kWh in 2025 and $80/kWh in 2030.

[Captainp4]

5 hours ago, Rick73 said:

If Farley is saying that equivalent BEV must cost no more than $3,000 to $5,000 more than ICE counterpart while making a profit, it will be interesting to see how that’s achieved.  Price parity has been discussed for years, but remains an elusive goal.  Less than $5,000 is getting close if they can pull it off. 

Much like you're "obsession" with the end product being efficient, I focus on efficiency in the engineering/manufacturing process that can have a big impact on costs and margins. There's a reason Farley keeps talking about emulating Tesla in that regard and they're the only ones turning a profit on BEVs. Obviously volume will help too if Ford can figure out a compelling BEV product at a reasonable price and has the battery supply to deliver it. Mach-E and Lightning are pretty damn close and great first efforts, but both compromised from the jump for various reasons. Hopefully we see even better product and more success with the 2nd gen stuff and maybe the larger/more reliable charging network available now will have some impact on sales as well. Will be interesting to see what they come up with.

[jpd80]

10 hours ago, Captainp4 said:

Much like you're "obsession" with the end product being efficient, I focus on efficiency in the engineering/manufacturing process that can have a big impact on costs and margins. There's a reason Farley keeps talking about emulating Tesla in that regard and they're the only ones turning a profit on BEVs. Obviously volume will help too if Ford can figure out a compelling BEV product at a reasonable price and has the battery supply to deliver it. Mach-E and Lightning are pretty damn close and great first efforts, but both compromised from the jump for various reasons. Hopefully we see even better product and more success with the 2nd gen stuff and maybe the larger/more reliable charging network available now will have some impact on sales as well. Will be interesting to see what they come up with.

The irony in all of this was for all Ford was saying about BEV build costs approaching ICEs,

Back in 2022, there was an article where Ford shared that Mach E cost $25,000 more to build

than a comparable Edge….

 

Now, I don’t know if that added cost is completely attributable to the giant battery or if it’s due

to some other drag anchor cost (recovery costs for two lots of project design & development?).

 

Anyways,

 Ford really knows how to mangle its own success but at least Mach E and Lightning are still

selling and buyers really like them, even if sales are less than what Ford was expecting……

 

Edited March 7 by jpd80

[silvrsvt]

7 hours ago, jpd80 said:

The irony in all of this was for all Ford was saying about BEV build costs approaching ICEs,

Back in 2022, there was an article where Ford shared that Mach E cost $25,000 more to build

than a comparable Edge….

 

Now, I don’t know if that added cost is completely attributable to the giant battery or if it’s due

to some other drag anchor cost (recovery costs for two lots of project design & development?)

 

 

https://about.bnef.com/blog/lithium-ion-battery-pack-prices-rise-for-first-time-to-an-average-of-151-kwh/

 

Quote

 

 

On a regional basis, battery pack prices were cheapest in China, at $127/kWh. Packs in the US and Europe were 24% and 33% higher, respectively. Higher prices reflect the relative immaturity of these markets, the higher production costs, the diverse range of applications and battery imports. For the higher end of the range, low volume and bespoke orders push prices up.

 

Prices could have risen further in 2022 had it not been for the higher adoption of the low-cost cathode chemistry known as LFP, and the continued reduction of expensive cobalt in nickel-base cathodes. On average, LFP cells were 20% cheaper than lithium nickel manganese cobalt oxide (NMC) cells in 2022. However, even low-cost chemistries like LFP, which is particularly exposed to lithium carbonate prices, have felt the bite of rising costs throughout the supply chain. LFP battery pack prices rose 27% in 2022, compared to 2021
 

 

 

https://about.bnef.com/blog/lithium-ion-battery-pack-prices-hit-record-low-of-139-kwh/

 

Quote

On a regional basis, average battery pack prices were lowest in China, at $126/kWh. Packs in the US and Europe were 11% and 20% higher, respectively

 

The industry continues to switch to the low-cost cathode chemistry known as lithium iron phosphate (LFP). These packs and cells had the lowest global weighted-average prices, at $130/kWh and $95/kWh, respectively. This is the first year that BNEF’s analysis found LFP average cell prices falling below $100/kWh. On average, LFP cells were 32% cheaper than lithium nickel manganese cobalt oxide (NMC) cells in 2023.
 

 

Part of it was definitely the price of the batteries themselves and moving to LFP cells to help margins.  

 

So 91 kwh battery would be at least $11466 in cell costs and a 70 kwh LFP battery would be $6650 with last years pricing, so figure double that figure for an end item cost. It would be $13741 in 2022 costs for the 91 Kwh battery. 

Edited March 7 by silvrsvt

[Rick73]

Interesting to note that many auto manufacturers are switching or focusing on cheaper LFP versus NMC chemistry due primarily to lower cost, especially for entry-level vehicles, even though energy and power density/performance are lower.  Manufacturers would rather take a little more weight and/or reduced driving range if it means a lower cost vehicle.  Anyway, the most interesting part of this trend is that it’s opposite direction of pending new technologies like solid state batteries that add much more energy and power density, but presently at a huge price penalty.
 

It’s a balancing act where throwing money at a problem like Tesla did originally with expensive Model S doesn’t work any more, at least for the masses.  There are not that many buyers left with money to burn.  Like most things in free markets, it’s now more about offering overall value.  Granted, million dollar super cars will use latest battery technology at any cost.

[akirby]

1 hour ago, Rick73 said:

Interesting to note that many auto manufacturers are switching or focusing on cheaper LFP versus NMC chemistry due primarily to lower cost, especially for entry-level vehicles, even though energy and power density/performance are lower.  Manufacturers would rather take a little more weight and/or reduced driving range if it means a lower cost vehicle.  Anyway, the most interesting part of this trend is that it’s opposite direction of pending new technologies like solid state batteries that add much more energy and power density, but presently at a huge price penalty.
 

It’s a balancing act where throwing money at a problem like Tesla did originally with expensive Model S doesn’t work any more, at least for the masses.  There are not that many buyers left with money to burn.  Like most things in free markets, it’s now more about offering overall value.  Granted, million dollar super cars will use latest battery technology at any cost.

 

There is plenty of room in between those extremes where people will buy vehicles with great styling and performance at a slightly higher cost and/or slightly less range.  Not everybody wants a cheap jellybean.

[jpd80]

In the end, BEV buyers will tell manufacturers like Ford what they will and won’t buy for whatever price,

the days of gotta have extortion pricing are over while interests rates are at current levels and folks

are wary of trade in prices declining over the next few years. That’s bound to happen as battery tech

get better, the vehicles sold today will be even less desirable in four or five years time…

 

with a combined 40,000 unsold Lightnings and Mach Es sitting there needing both strong incentives

and low cost leasing to move them, I don’t see Ford moving the conversation of premium pricing,

not with this generation anyway. We’re a million miles away from Ford demanding dealers do those

costly upgrades to sell BEVs, now Ford is telling dealers to take money and get rid of them…..

[T-dubz]

Would it be priced 3-5k more before or after tax credits? If it’s before tax credits, that would essentially make the evs cheaper than their ICE counterparts. 

[silvrsvt]

33 minutes ago, T-dubz said:

Would it be priced 3-5k more before or after tax credits? If it’s before tax credits, that would essentially make the evs cheaper than their ICE counterparts. 

Who knows how long tax credits will be around for and if newer products will be able to get 100% of them. 

[T-dubz]

1 hour ago, silvrsvt said:

Who knows how long tax credits will be around for and if newer products will be able to get 100% of them. 

For sure, that’s why I ask. Imo EV’s need to be cheaper than ice if they are ever going to overtake ice. Making an ev equal to essentially the top tier trim of a vehicle is still making it more expensive than the average consumer can afford. Basically, it’s not moving the needle enough, but at least it’s moving in the right direction.

[mustang84isu]

2 hours ago, T-dubz said:

For sure, that’s why I ask. Imo EV’s need to be cheaper than ice if they are ever going to overtake ice. Making an ev equal to essentially the top tier trim of a vehicle is still making it more expensive than the average consumer can afford. Basically, it’s not moving the needle enough, but at least it’s moving in the right direction.

IMO, it needs to go even further than price parity with ICE.  Initial cost is just one part of the equation of vehicle ownership, but then you also have maintenance, insurance costs, and even right to repair issues.  Tesla's issues with high insurance rates and expensive repairs that force you to service it at Tesla service center are pretty well documented; I don't know how Ford or other OEM's are fairing, but it's something that will make the average consumer drag their feet even longer on EV ownership.  Then there is battery safety; lithium batteries and thermal runaway are a real issue that will someday be resolved when solid state batteries replace them, but until then it might give potential buyers pause.  And finally, resale value...current EV's are going to be worth little to nothing after 8 years or so because replacing the battery when it fails is too expensive for most to afford.  I've seen some 2021 & 2022 Model 3 Long Range models going for $17-19K.  That's like a 65% loss of value over 2-3 years.  I'm seeing two & three year old Mach-E's with less than 30K that are for sale in the $25-28K range, which is about a 50% loss of value.  That's crazy and will be a huge headwind for EV adoption by the mainstream buyer.

 

Manufacturers need to improve in all these areas to truly make a dent in ICE sales.  Which is why I am glad that Ford is delaying EV's a bit and pushing hybrids in the interim.

[GearheadGrrrl]

I've done the numbers and for me the price of a new EV would have to come down to about $10K after rebates to match the costs of my IC cars. Battery replacement is a big issue- I keep my vehicles 20+ years while many EVs will be junk at half that due to the cost of battery replacement. No surprise that the fleets are agreeing with me- The costs of relying on Tesla's captive service operation would sour any fleet on EVs and the resale is a potential bankruptcy for a rental/leasing fleet.

[silvrsvt]

8 hours ago, GearheadGrrrl said:

I've done the numbers and for me the price of a new EV would have to come down to about $10K after rebates to match the costs of my IC cars. Battery replacement is a big issue- I keep my vehicles 20+ years while many EVs will be junk at half that due to the cost of battery replacement. No surprise that the fleets are agreeing with me- The costs of relying on Tesla's captive service operation would sour any fleet on EVs and the resale is a potential bankruptcy for a rental/leasing fleet.

 

Once again your introjecting your personal prerogatives into the conversation. 

 

The replacement of EV batteries is an red herring...the failure rates are a red herring

 

https://blog.chargemap.com/electric-car-battery-replacement/#:~:text=A recent study conducted by,on EV models predating 2015.

Quote

 

A recent study conducted by Recurrent on 15,000 electric vehicles brought onto the market between 2011 and 2023 confirms that electric car battery replacement is a rare occurrence. Indeed, just 1.5%* of EVs have required a new battery. Most of the batteries replaced occurred on EV models predating 2015. Among the most frequent are the Tesla Model S and Nissan Leaf. 

*This figure excludes peaks in vehicle recalls for manufacturing defects found in batteries (Chevrolet Bolt EV in 2017 and Hyundai Kona EV in 2019-2020).

 

 

The MTBF for ICE is roughly the same

https://bobistheoilguy.com/forums/threads/engine-life-mtbf-and-oil-oci-statistics.66626/#:~:text=Two SD covers 97% probability,1.5% chance fail after 160K.
 

Quote

So in this case there is 3% probability that you'll fail before 80K or exceed 160K. Assuming 'normal' distribution, there is a 1.5% chance fail before 80K and 1.5% chance fail after 160K. You can see how this is useful to predict likely warranty costs in large sample size.

 

Not to mention rental fleet cars get abused...Teslas are more expensive repair due to accident damage, not actual maintenance costs

Edited March 11 by silvrsvt

[GearheadGrrrl]

Your data is near useless, as for the vast majority of electric vehicles we don't have even 10 years of failure history. Nor does it necessarily apply to my tougher than normal use case, which would require a lot of battery abusing fast charging to above 80% of capacity and draining below 20%. Given that the failure rates and repair costs of IC vehicles are well established but EV's are still largely unknown, it would be foolish of me to bet $30K or more on an EV when IC cars that do a better job are available for less.

 

There is also the issue of parts availability- For example Focus EV batteries are NLA and Volt parts are becoming NLA.

[akirby]

1 hour ago, GearheadGrrrl said:

Your data is near useless, as for the vast majority of electric vehicles we don't have even 10 years of failure history. Nor does it necessarily apply to my tougher than normal use case, which would require a lot of battery abusing fast charging to above 80% of capacity and draining below 20%. Given that the failure rates and repair costs of IC vehicles are well established but EV's are still largely unknown, it would be foolish of me to bet $30K or more on an EV when IC cars that do a better job are available for less.

 

There is also the issue of parts availability- For example Focus EV batteries are NLA and Volt parts are becoming NLA.

I don’t recall anyone here suggesting you should buy an EV.  And you clearly have no intention of buying one (for valid reasons).  So why keep arguing?

[Rick73]

2 hours ago, GearheadGrrrl said:

Your data is near useless, as for the vast majority of electric vehicles we don't have even 10 years of failure history. Nor does it necessarily apply to my tougher than normal use case, which would require a lot of battery abusing fast charging to above 80% of capacity and draining below 20%. Given that the failure rates and repair costs of IC vehicles are well established but EV's are still largely unknown, it would be foolish of me to bet $30K or more on an EV when IC cars that do a better job are available for less.

 

There is also the issue of parts availability- For example Focus EV batteries are NLA and Volt parts are becoming NLA.

A 70% battery capacity threshold for warranty coverage concerns me a bit.  A BEV could drop from 270 miles of range to under 200 miles and still not trigger warranty replacement.  When its diminished range is reduced further by 10~80% charging, and also bad weather, etc., a vehicle with 70% of original range may no longer meet owner’s needs.

 

Fortunately, manufacturers are starting to replace some NMC batteries with LFP, and LFP can last significantly more cycles than NMC.  Maybe that will lead to longer warranties, or at least available extended warranties.

 

Another potential issue I’d like to know more about is replacement costs, particularly if battery pack is made a structural part of vehicle.  I’d want to make sure labor costs to replace batteries don’t become cost prohibitive.

[silvrsvt]

44 minutes ago, Rick73 said:

A 70% battery capacity threshold for warranty coverage concerns me a bit.  A BEV could drop from 270 miles of range to under 200 miles and still not trigger warranty replacement.  When its diminished range is reduced further by 10~80% charging, and also bad weather, etc., a vehicle with 70% of original range may no longer meet owner’s needs.

 

Fortunately, manufacturers are starting to replace some NMC batteries with LFP, and LFP can last significantly more cycles than NMC.  Maybe that will lead to longer warranties, or at least available extended warranties.

 

Another potential issue I’d like to know more about is replacement costs, particularly if battery pack is made a structural part of vehicle.  I’d want to make sure labor costs to replace batteries don’t become cost prohibitive.

 

I suggest you drop the shovel because  your just digging yourself into a hole just to argue.

 

Ford's battery warranty:
 

Quote

The warranty ensures against degradation beyond 70% of the original capacity over the coverage.

 

It is not based on actual range its based on how many of those cells are still working, and guess what? Those batteries are over built cell wise to help protect them and range is different due to driving styles or weather. 

 

Quote

The 2021 Mach-E was originally released with a standard 68 kWh battery (75.7 kWh gross) and an optional 88 kWh extended pack (98.7 kWh gross). For the 2022 model year, the usable capacity of these batteries were bumped up to 70 and 91 kWh while the gross size remained the same

So if you really want to argue this, your splitting hairs over 15 kwh that works out to maybe 45 miles less range using the worst case scenario.  

[HotRunrGuy]

2 hours ago, akirby said:

I don’t recall anyone here suggesting you should buy an EV.  And you clearly have no intention of buying one (for valid reasons).  So why keep arguing?

 

Because people keeping responding to her.  Stop engaging, and move on to more productive conversations.

 

HRG

[akirby]

25 minutes ago, HotRunrGuy said:

 

Because people keeping responding to her.  Stop engaging, and move on to more productive conversations.

And at the same time people need to stop making comments like that to begin with which invite those responses.