Ford EV business loses $1.3 billion in Q1 2024

[Ford17]

Originally Posted by kypez

Transit reduced by $15k. Not Mach E. That was $8K

From the article: "The Mustang Mach-E now starts from $64,990 plus on-road costs – some $15,000 less than the car’s launch price last year. That’s an $8000 cut from revised pricing that made the car more attractive in December last year."

Is this not correct reporting?

[kypez]

Originally Posted by Ford17

From the article: "The Mustang Mach-E now starts from $64,990 plus on-road costs – some $15,000 less than the car’s launch price last year. That’s an $8000 cut from revised pricing that made the car more attractive in December last year."



Is this not correct reporting?

They never sold a single car at the original price. It was revised before the first sale so no, it's not correct reporting. It's fast and loose with the truth

[jpd80]

Only a few days and we should see sales figures for May….

[Syndrome]

Originally Posted by Ford17

EV Mustang prices slashed by up to $15k - in line with crashing EV market:

https://www.news.com.au/technology/m...ca208ef4a35135

Are they making any profit at that price?

[Dr Smith]

Originally Posted by Syndrome

Are they making any profit at that price?

When Ford US says .."this year we spent $USDXX Billion on all costs associated for the EV side of the business which includes all the capital costs for EV assembly plants, battery factories, R&D etc"...then they will never make a nett profit from the total vehicle sales until those sales numbers surpass ICE sales......but if you only look at the specific actual build cost per unit and remove this from the final retail price then yes they make some profit...it's how you do your accounting...

[jpd80]

Originally Posted by Syndrome

Are they making any profit at that price?

At the moment, our RHD models are based on versions supplied in RHD to UK,
the original RRP was based on the UK price converted so I would think that
Ford Canada pricing is more $ for $ aligned with what we are or should be paying…

https://www.ford.ca/suvs/mach-e/


Our market is also small and still has unique ADRs that may be adding to the cost
of a straight European spec vehicle

[Swordie]

Ford is still doing well financially.

It will be interesting to see if they build the four door Mustang.

[Crazy Dazz]

Originally Posted by Swordie

It will be interesting to see if they build the four door Mustang.

Yeah, they're going to call it The Falcon

[jpd80]

Originally Posted by Crazy Dazz

Yeah, they're going to call it The Falcon

That story seems to do the rounds every few years and disappear again.
Usually starts on a Euro site but certainly reading a lot into Farley’s comments.

[Trendseeker]

Carsales ran article on it recently: https://www.carsales.com.au/editoria...ration-145976/

[whynot]

Originally Posted by Dr Smith

...it's how you do your accounting...

Everybody fiddles when it comes to internal costs.

Going back 40 years ago (when I was a young tradie in the field), we had a clerk in the office who would keep track off all of our job numbers and the cost centres we were were booking to.

A capital project was finished under budget??? The word would come down from the supervisors to book to "this" job number for the next few weeks. Subsequently, less bookings to the local cost centre. Result, we are running under budget because we do a darn good job.

Opps, an upgrade project was running over budget??? No problems, lay off against this sundries job number.

And so it went.

I am not sure of how Ford tracks its internal costs these days ... but there is a practice with some US companies for a percentage of staff to be almost "free agents" who go around looking for internal work to "help with", and then book their time to. They are really like profit leaches. And one is always on the lookout to make sure they are not booking time to your cost centre.

Always, always, take internal profit numbers with a bag or two of salt.

[39ClevoUte]

Originally Posted by whynot

I think one has to be really careful about using a cherry picked financial figure, and then jumping to a conclusion. Especially, cherry picked financials provided second hand. There are plenty of examples of financial reports that look great on paper (look no further than Qantas past annual reports) and make Wall Street analysts happy, but deeper down are pointing to long term structural problems.

The actual presentation is here.

https://s201.q4cdn.com/693218008/fil...-NO-SECRET.pdf

So, for sure, the Ford Blue division (classic ICE production) continued to make a profit while Model e division (electric) has continued to make a loss (page 21). However, it is interesting how much Ford Blue has slid backwards the last 12 months (more than Model e), reflecting the much tougher new car market in the USA with its excess inventories.

The other thing to keep in mind is that the USA tax treatment for business investment losses is much more generous in Australia. In addition, we don't have any insight into how Ford is carrying its losses from the EV division on its books, and whether Ford is in the process of offloading those losses right now or is holding onto some for a future date. We also have no insight into what expenditure Ford has loaded onto the EV division. (I have only a very superficial understanding of company tax in the US, but I think there are circumstances where a loss can be backdated three years and carried forward for five years.)

My read of it is that I think Ford is in a better position now than they were a few years back. The sunk costs for EV production will be written off. And while billions sounds like a lot of money, these guys think long term and strategically. Ford has grown its technology and manufacturing capability from ICE (and small PHEV volumes) to ICE, EV, and large PHEV volumes. EV production is a completely new way of building. Ford now has that capability in house. It should be able to better adjust production between all three streams, depending on market demand. EV and PHEV is complementary battery-engine technology, so it should be able to swing its design and manufacture between either as the market demands.

For example, all that is required is a war to break out in the Middle East resulting in fuel shortages, and customers will be clamouring for EV again. While there isn't much demand for it now, the F150 Lightning may be a very astute each-way bet for Ford in its home market.

The final point to all of those budding Nostradamus' out there ... customers are very fickle creatures. It is hard enough to predict the number of people who will use the local Maccas for dinner tonight, let alone predict the number of EV to be sold in five years time.

I think Ford have done well here.

I think you will find that many auto manufacturers are required by some sort of laws, legislation or whatever to have ev style offerings in their inventory, even if they seriously don't expect to sell many. Otherwise there would be "penalties".

[Sprintey]

Update: story from Europe and petrol is back in fashion

https://www.carsguide.com.au/car-new...lf-as-electric

[Dr Smith]

Originally Posted by Sprintey

Update: story from Europe and petrol is back in fashion

https://www.carsguide.com.au/car-new...lf-as-electric

It's a weird time, globally we came out of covid and endured supply problems on just about anything, which raised prices across the board, ..and now high interest rates are hurting many globally, the "cost of living" phrase is quoted on most news services around the world...one has to wonder if none of this happened and things had of been running globally "as normal as normal can be" with no extraordinary influences where would the ICE vs EV situation stand. Like all topics, the hard core zealots of both sides make the most noise first and carry more weight than deserved while the silent majority often have their lives effected while ideology is the prime driver rather than the more pragmatic, "what's best for the majority" that includes economic and environmental impacts...you need to always consider both.

I thought I read somewhere that some Ford bosses now admit cancelling high-volume low-margin vehicles probably wasn't the best decision...

[jpd80]

Originally Posted by Dr Smith

It's a weird time, globally we came out of covid and endured supply problems on just about anything, which raised prices across the board, ..and now high interest rates are hurting many globally, the "cost of living" phrase is quoted on most news services around the world...one has to wonder if none of this happened and things had of been running globally "as normal as normal can be" with no extraordinary influences where would the ICE vs EV situation stand. Like all topics, the hard core zealots of both sides make the most noise first and carry more weight than deserved while the silent majority often have their lives effected while ideology is the prime driver rather than the more pragmatic, "what's best for the majority" that includes economic and environmental impacts...you need to always consider both.

I thought I read somewhere that some Ford bosses now admit cancelling high-volume low-margin vehicles probably wasn't the best decision...

Well if they did, it’s been shouted down by Farley…


FORD CEO JIM FARLEY SAYS COMPANY LOST BILLIONS ON SEDANS
https://fordauthority.com/2024/06/fo.../#&gid=1&pid=1
I’d love to know exactly which cars lost Ford billions, maybe a lot of cash
down the gurgler on developing CD4 Lincoln MKZ, Continental, Taurus?

But then, Farley says sedans have aero advantage..

https://www.hagerty.com/media/lists/...33567fec781301


Also, Farley extolling the virtues and benefits of owning BEVs

Confessions From a Lifelong Petrol Head—I Love Electric Vehicles And It Has Nothing To Do With Politics by Jim Farley

https://www.linkedin.com/pulse/confe...-farley-fc81e/


“The tipping point we’re working toward will come not from regulators who push us or from politicians who try to hold us back. It will come from consumers. Not when an arbitrary market share is reached, but when electric vehicles are simply better for more customers – better to drive, cheaper to own, and easier to integrate into daily life. This is the reality for millions already. “

The truest thing that can be said is that buyers will make up their own minds
and not be forced into a vehicle they’re not comfortable with…

[Trendseeker]

Originally Posted by Dr Smith

I thought I read somewhere that some Ford bosses now admit cancelling high-volume low-margin vehicles probably wasn't the best decision...

A Ford salesman said the same thing to me 5 weeks ago when I said that Ford had become the Ranger and Everest company.

[Franco Cozzo]

Originally Posted by Trendseeker

A Ford salesman said the same thing to me 5 weeks ago when I said that Ford had become the Ranger and Everest company.

I like the moniker 'Ford Ute', just like Isuzu Ute who has a two model range.

[ivorya]

Originally Posted by Sprintey

Update: story from Europe and petrol is back in fashion

https://www.carsguide.com.au/car-new...lf-as-electric

Pressure from Far-Right politicians and car makers have turned the boat, once again.

All i can see it doing is playing further into the hands of Tesla and the Chinese companies (BYD etc). When these OEM's start the electric again, they'll even further behind and require major public help or have to shut down.

[Syndrome]

Originally Posted by ivorya

Pressure from Far-Right politicians

Which politicians?

[ivorya]

Originally Posted by Syndrome

Which politicians?

https://www.politico.com/news/2023/1...urope-00119400

Here's one article.

You can add the French to that list now as well. The EU had to change the regulations regarding sales of vehicles or other country's would have followed the UK, like that has worked well for them Lol

[jpd80]

Generally, Euro consumers are pushing back against what they see as the inconvenience of owning an EV,
the time taken to charge vehicles in public places may also expose women to dangerous situation day or night,
you can’t quickly stop charging and leave….

Another issue for European owners is that many live in apartments where home/ off street charging isn’t possible
so many of those owners are compelled to pay for public charging electricity which can spike in price depending
on the time of day or higher flow rates.

Most of the above have been discussed before but people experiencing problems first hand, telling their friends
or posting on social media also sends back real world feedback that undoes a lot of the positive messaging.

[Franco Cozzo]

All the new houses only have 40A main circuit breakers on them around where I live, and especially in the older part of town where they've allowed subdivisions into 1200m2 lot sizes,

You can have 40A and that's it,

So don't charge your EV at 32A single phase and try use the kettle or your oven at the same time

Mind you, can stagger your energy usage, charge the EV between 12AM-6AM, where you're not likely to try use the kettle at the same time but all the older houses have 63A and can go to 80A which gives you a bit more freedom to do other things while charging the EV.

The power infrastructure in town is a joke, the pizza shop can't put in another pizza oven because the street level infrastructure can't deal with it, so they've just been flat out told no, deal with it.

The new pub was running on a diesel generator for 6 months before power company hooked them up to the street,

We can't have public access EV chargers either until the street infrastructure is upgraded.

[Syndrome]

Originally Posted by ivorya

https://www.politico.com/news/2023/1...urope-00119400Here's one article.You can add the French to that list now as well. The EU had to change the regulations regarding sales of vehicles or other country's would have followed the UK, like that has worked well for them Lol

Interesting. All I saw in those articles were conservative politicians. None of them are far right.

[jpd80]

I don’t understand the obsession with BEVs before better batteries are available,
it just seems like regulators are forcing people to buy inefficient and compromised
designs just because someone has made an unreasonable legislative edict.

Europe has made massive change to its power generation and now has around
50% renewable energy, something that will improve more quickly than rolling
out Battery Electric vehicles. They should take the win and devise a better plan
with HEVs, PHEVs and extended range EVs until the grid is developed enough
for mass adoption of BEVs. (End of rant)

[Franco Cozzo]

Originally Posted by jpd80

I don’t understand the obsession with BEVs before better batteries are available,
it just seems like regulators are forcing people to buy inefficient and compromised
designs just because someone has made an unreasonable legislative edict.

Europe has made massive change to its power generation and now has around
50% renewable energy, something that will improve more quickly than rolling
out Battery Electric vehicles. They should take the win and devise a better plan
with HEVs, PHEVs and extended range EVs until the grid is developed enough
for mass adoption of BEVs. (End of rant)

Current battery technology is perfectly fine for light vehicle applications, the only place it falls short is commercial vehicles.

Average Australian only does 12,000km/year, which is about 230km/week and they do 400-500km on a charge.

I do over 30,000km/year and I could make a BEV work no dramas, just need to charge it every night to be safe and thats no different to my phones so I don't see a problem there.

[Itsme]

Originally Posted by Franco Cozzo

Current battery technology is perfectly fine for light vehicle applications, the only place it falls short is commercial vehicles.

Average Australian only does 12,000km/year, which is about 230km/week and they do 400-500km on a charge.

I do over 30,000km/year and I could make a BEV work no dramas, just need to charge it every night to be safe and thats no different to my phones so I don't see a problem there.

Until they find a better solution for battery design, BEV vehicles will be restricted, Lithium resources is not unlimited.

[Franco Cozzo]

Originally Posted by Itsme

Until they find a better solution for battery design, BEV vehicles will be restricted, Lithium resources is not unlimited.

How is that any different to oil? Oil resources in the Middle East are not 'unlimited' either

We're sitting on 130 years reserves worth of lithium as we sit, with the stuff we already know about.

Australia, Afghanistan and Chile have some of the worlds largest reserves of lithium globally.

Battery technology as it sits is already more than adequate for Australians and their vehicle usages of 12,000km/year.

[jpd80]

Are we compelling battery suppliers to take back their products at end of life and recycle?
There’s always the fear that the cost of recycling is more expensive than mining new Lithium.

[Franco Cozzo]

Originally Posted by jpd80

Are we compelling battery suppliers to take back their products at end of life and recycle?
There’s always the fear that the cost of recycling is more expensive than mining new Lithium.

No different to plastic, cheaper to make new plastic than to recycle, but we still use heaps of plastic in everything.

Personally, I don't give a shit about the environment, and either do you or anyone else here on AFF trying to justify supporting the Middle East and their vast oil reserves.

What I like about BEVs is:

- Instant power and torque the moment you put your foot on the accelerator
- No 10,000km servicing (15,000km and above service intervals on internal combustion engines are communist propaganda)
- Cuts off funding to the Middle East helping them disappear quicker

[Itsme]

Originally Posted by Franco Cozzo

How is that any different to oil? Oil resources in the Middle East are not 'unlimited' either

We're sitting on 130 years reserves worth of lithium as we sit, with the stuff we already know about.

Australia, Afghanistan and Chile have some of the worlds largest reserves of lithium globally.

Battery technology as it sits is already more than adequate for Australians and their vehicle usages of 12,000km/year.

Wrong, look at the economics of lithium and that will tell you it not really viable for long term, hence the reasons why other battery designs are on the drawing board using more abundant metals.
Also, Lithium is not environmentally friendly in batteries, short term solution atm.