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FoMoCo lost $58,391 for every EV it sold during the 3rd quarter.
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. Detail from an October 21 report by Morningstar, “Are Electric Vehicles Short-Circuiting? Auto Manufacturers Revise E....”
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The ugly EV news from Ford Motor Company just keeps coming. This afternoon, the company reported that it lost $1.224 billion in its EV business during the third quarter.
In early October, the company reported EV sales “were up 14.8 percent on best-ever sales of 20,962 vehicles.” Thus, simple division shows that the storied automaker lost $58,391 for each EV it sold during the quarter.
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The company’s losses on its EV business, known as Model e, for the first nine months of 2024 total $3.7 billion. For reference, that $3.7 billion loss is equal to the gross profit (Ford calls it EBIT, short for earnings before interest and taxes) it made on Ford Blue, the division that makes internal combustion vehicles.
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Alas, these results aren’t surprising.
Ford has been hemorrhaging cash on EVs for the past two years.
It lost $4.7 billion on EVs in 2023 and $2.2 billion on EVs in 2022.
The third-quarter numbers simply show, yet again, that Ford’s leadership has made a colossal blunder.
CEO Jim Farley and his lieutenants didn’t understand what motorists want to buy.
That’s a bad thing, if you’re running one of the world’s biggest car makers.
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FoMoCo’s third-quarter losses are being made public just two months after the company announced it was killing a planned three-row, all-electric SUV.
In August, the company said, “With pricing and margin compression, we’ve made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive EBIT within the first 12 months of launch for all new models.”
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In other words, Ford was warning two months ago, it was having to slash prices on its EVs, and the third quarter would be a stinker. And it was.
Also in August, the company said it was going to move some of its battery production out of foreign factories into US locations so it could qualify for more federal subsidies available under the Inflation Reduction Act.
As I reported here last year, Ford and other automakers are aiming to collect tens of billions of dollars via the 45X tax credit in the IRA for making batteries in the US.
For instance, Ford is building a battery plant in Marshall, Michigan, which is expected to create about 4,200 jobs.
According to Good Jobs First, each job at the new Ford plant will cost taxpayers $3.4 million. At that cost per job, you cannot get much dumber than that!
FoMoCo lost $58,391 for every EV it sold during the 3rd quarter of 2024.
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From Morningstar: “Are Electric Vehicles Short-Circuiting? Auto Manufacturers Revise E....”
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While Ford can claim its sales have increased, the fundamental problems in the EV market have not changed.
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As seen above, the credit rating agency Morningstar, which 13 months ago was forecasting huge growth in EVs, has now turned negative on the sector.
In an October 21 report titled, “Are Electric Vehicles Short-Circuiting? Auto Manufacturers Revise E...,” (registration required), Morningstar said, the major automakers, including VW, Ford, GM, and Mercedes, have delayed their EV plans or slashed planned output, due to weak sales...
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Morningstar noted, while some automakers, including Ford, have cut prices, which has hurt their profitability.
Morningstar also said, with EV sales “to early adopters now seemingly exhausted, EVs are struggling to maintain ongoing sales momentum among mainstream consumers.”
Morningstar then listed the issues that have plagued EVs for decades:
EV ranges remain significantly affected by extreme weather conditions, with cold weather (i.e., below 40 F, potentially decreasing range by about 25%).
Concerns about the EV charging infrastructure are exacerbated by lackluster reliability records of public EV charging stations.
Moreover, charging times, notwithstanding significant developments in recent years, remain considerably longer than the typical time it takes to refuel a conventional ICE vehicle.
Additionally, while EVs have fewer parts than ICE models and typically require less maintenance than ICE vehicles, one-off repairs (notably involving the EV battery pack) can prove inordinately expensive.
Accordingly, across most jurisdictions, insurance premiums for EVs are about 3 times higher than for comparable ICE vehicles, mainly because of the potentially markedly higher repair costs.
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That paragraph pretty well sums up the EV marketplace, particularly regarding cold weather, charging infrastructure, and charging times. (See this story on Hertz for more on the repair cost issue.)
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All those problems have been evident since the days of Edison.
So why didn’t Ford and the other automakers see this debacle coming?
Was it climate-woke, herd mentality?
Were they responding to government pressure?
If so, why didn’t they push back?
What did they know about EV demand from their own market research?
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Demand for the Ford F-150 Lightning pickup must be so abysmal that the legacy automaker is reportedly planning to shutter the production line for the EV truck in the coming weeks through the end of the year.
This should be no surprise to readers, given that the Tesla Cybertruck has become America's best-selling electric pickup.
"Ford Motor Co. plans to stop building its F-150 Lightning from mid-November through the end of the year amid lower-than-expected demand for the electric pickup," Automotive News' Michael Martinez reported on Thursday morning.
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At the start of October, John Lawler, Ford's vice chair and CFO, told reporters in a conference call, "We're seeing a tremendous amount of competition," adding, "In fact, S&P Global … said that there are about 143 EVs in the pipeline right now for North America — and most of those are two-row and three-row SUVs."
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Ford scrapped plans to roll out an all-electric three-row SUV in August.
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This year has been doom and gloom for legacy automakers (from the US to Europe) as they aggressively scale back on EV investments.
The reality is that the Biden-Harris administration, lawmakers, and Wall Street, all wearing climate crisis blinders, stoked the most massive green energy bubble that collapsed.
In doing so, legacy automakers who poured billions of dollars into EVs, severely misjudged consumer demand - and now paying the consequences:
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Here’s my prediction: A few years from now, after the automakers have lost billions more due to their misplaced bets on EVs, business schools and analysts will be asking those very same questions.
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Nearly Half Of US EV Drivers Consider Switching Back To Gas Vehicles: McKinsey Study
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More electric vehicle drivers are thinking about switching back to internal combustion engine automobiles, according to new findings from the 2024 McKinsey & Co. Mobility Consumer Global Survey.
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Globally, the survey of 30,000 respondents in 15 countries found that at least 29 percent of EV owners are likely to go back to driving gas-powered cars.
Australia topped the list with 49 percent confirming they want to return to driving behind the wheel of an gas-powered automobile, the study found.
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The lack of public charging infrastructure was the chief reason respondents wanted to switch back to gas-powered vehicles, with 35 percent saying it is “not yet good enough for me.”
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Go Woke, Go Broke: Ford Announces Mind-Boggling $100,000 Loss on Each EV Sold in 2024
https://www.windtaskforce.org/profiles/blogs/go-woke-go-broke-ford-...
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Affordability, Charging-Infrastructure, & Range-Anxiety Continue To Keep Americans From Embracing EVs
https://www.windtaskforce.org/profiles/blogs/affordability-charging...
BY TYLER DURDEN
While the US and the EU look at different ways to add tariffs to China-made electric vehicles to prevent supply disruption, the reality is, overall demand for EVs is starting to peak.
Such was the topic of a new FT report that looked into why Americans aren't buying more electric vehicles.
“It’s just not accessible to us at this point in our life,” one couple told FT, who said they were looking for a more affordable vehicle.
They went with a $19,000 Honda Accord after a trade-in, since only five new EV models under $40,000 have hit the market in 2024, the report says.
A number of factors have decreased buying of EVs, including among environmentally conscious consumers. Various sources, including FT reported about the following issues:
1) high EV prices (increase monthly lease payments),
2) high financing interest rates (increase monthly lease payments),
3) short driving range,
4) lack of charging infrastructure,
5) high insurance cost,
6) high on-the-road charging cost
7) time wasted sitting in vehicle while charging; it takes 5 minutes to fill a gas tank to get about 500 miles of driving, but it take at least 1 to 2 hours to fast-charge a EV battery to get 250 miles of driving
That waste is enormous, if you multiply that time by millions of EVs charged per day.
That waste will make the US worker less productive, further lower his standard of living.
8) high repair and bodyshop cost, and long times for bodyshops to get parts
9) very low resale/trade-in value,
10) low-range during hot and cold weather, especially with a few passengers and some luggage
11) more rapid wear of tires and brakes and expensive replacement cost
12) spending at least "$15000 + labor + hazardous landfill charge" to replace an EV battery in an 8-y-old car
13) worrying about having enough charge, and where to charge, when making a longer trip from A to B
14) worrying about the battery catching fire, while parked in the garage, or on the road
15) inability for an EV to tow almost anything for some distance, without having to recharge along the way
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Everett Eissenstat, a former senior US Trade Representative told FT: “There is no question, this list of woes is an explanation of the very slow EV adoption in the US and in Europe. We are just not producing EVs consumers need at prices plus other costs, they can afford”. That meager result is after more than 10 years of high subsidies, and Media hype.
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