Ford makes a big announcement regarding batteries, Volkswagen plans a cheaper ID.4, Rivian delivers electric vans to Amazon. All this and more in today’s issue of The Morning Dump.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
Ford Switches Packs
The inevitable EV ramp-up will be a colossal battle of costs and capabilities. Consumers want more production and lower costs, automakers want more profits. As of now, Ford is using nickel cobalt manganese (NCM) batteries in their electric vehicles which, while energy dense, are quite expensive on a per-cell basis. While other technologies have previously been less power-dense, new cell formulations are advanced enough to tip the cost-benefit analysis.
See, Ford plans on going with lithium iron phosphate (LFP) batteries for next year’s standard-range Mustang Mach-E electric crossover, with the standard-range F-150 Lightning gaining LFP chemistry in early 2024. Ford claims a material cost reduction of between 10 and 15 percent — significant savings (largely coming from ridding of pricy Cobalt) that could swing profitability should general material costs continue to rise. So what are the drawbacks of LFP batteries and where are they already used? Well, LFP batteries feature lower energy density than NCM batteries, but that’s about as far as the downsides go. They’re more stable than NCM batteries and have higher thermal runaway thresholds —tttt good stuff for vehicle safety. Tesla and BYD are already using LFP batteries, so expect LFP cells to make their way into more EVs in the coming years.
In addition to this big LFP announcement, Ford believes it’s secured enough batteries to produce 600,000 EVs per year. While that pales in the face of the nearly 900,000 F-Series pickup trucks Ford sold in America during 2019, it’s still a solid step towards a greener vehicle mix. Not bad, Ford. Not bad.
Volkswagen Aims For The Masses
Affordable EVs are the next frontier of electrification, and Volkswagen seems to be making strides to limbo underneath the $40,000 mark. The German company announced this week that as production of the 2023 ID.4 electric crossover kicks off in Chattanooga, T.N., a cheaper shorter-range variant will be made available for American consumers.
Don’t worry, we’re not getting the sloth-like 55 kWh Pure model that Europe gets. While 215 miles of range on the WLTP cycle is perfectly fine if you live in a dense country, it doesn’t sound so great for American use. Instead, the cheaper North American ID.4 will get a 62 kWh battery pack, shaving 20 kWh of capacity off of the long-range 82 kWh battery pack. There’s a chance that rated EPA range of the rear-wheel-drive 62 kWh ID.4 will exceed 200 miles, although we’ll have to wait and see for sure. Ditto pricing, a starting MSRP in the mid-$30,000 range doesn’t feel unrealistic, although we’ll have to wait and see where VW’s chips fall.
Honestly, I’m excited to learn more about this entry-level ID.4 as it holds a lot of promise for families looking to go green on a normal budget. Sure, a well-equipped Hyundai Ioniq 5 is really cool, but not everyone has more than $40,000 to drop on an EV in an age of rising interest rates and soaring inflation.
Rivian Starts EV Van Deliveries
Hey, remember the electric delivery van Rivian was developing for Amazon? Well despite production delays for Rivian’s R1T pickup truck and R1S SUV, the van has finally made it out on the streets. Automotive News reports that Amazon can now put Rivian-built delivery vans into service across America, so there’s a chance your next overnight shipment of googly eyes might arrive in an EV.
“In 2019, Rivian and Amazon committed to fast-tracking a new type of delivery vehicle that would result in a significant reduction of carbon emissions,” Rivian CEO RJ Scaringe said in a joint statement by the companies. “That vision is now being realized.”
Expect to see these electric delivery vans hitting the streets in Baltimore, Chicago, Dallas, Kansas City, Nashville, Phoenix, San Diego, Seattle, and St. Louis, with more cities to be added later.
“This rollout is just the beginning of what is expected to be thousands of Amazon’s custom electric delivery vehicles in more than 100 cities by the end of this year — and 100,000 across the U.S. by 2030,” the release said.
Hell yeah, electric last-mile delivery is pretty dope. It’ll be interesting to see how scalable Amazon’s last-mile EV adoption is considering how many drivers are independent contractors, but hopefully cheaper mass-market electric vans will later arrive to fill that void.
Volkswagen To Co-Design New Chips
You know that old cliché about how if you want a job done right, you should do it yourself? Well, Volkswagen seems to be taking that to heart because Reuters reports that the German company is co-designing a new semiconductor with chip producer STMicroelectronics. The new chip is expected to be produced by Taiwan Semiconductor Manufacturing Company, with Volkswagen and STMicroelectronics “moving to agree” to that setup.
“With the planned direct cooperation with ST and TSMC, we are actively shaping our entire semiconductor supply chain,” said Murat Aksel, Volkswagen’s purchasing head.
“We’re ensuring the production of the exact chips we need for our cars and securing the supply of critical microchips for years to come.”
Honestly, it’ll take an arsenal to get car production back online. From semiconductor issues to rising material costs to shipping delays, we’re still very much in the woods. If this new chip from Volkswagen and STMicroelectronics helps get the new car market out of its slump, the investment should be very much worth it.
Whelp, time to drop the lid on today’s edition of The Morning Dump. Friday’s little sibling is here, which means that the calendar is almost through saying “WTF” and the weekend is right around the corner. While speculation isn’t really grounds for reporting, it can occasionally be a good thought exercise. With new car supply expected to stay tight for a while and three-year-old off-lease vehicle supply remaining sparse for years, could it simply be that the used car market has changed forever? Higher values, lower selection, more people holding on to their current cars. I’m curious to hear your thoughts because I don’t see used car values crashing any time soon.
Lead photo credit: Thomas Hundal
Focusing microchip production in Taiwan is going to look bad when China drops its pants and sits on their face. That region is a powder keg.
TSMC is already one of the biggest chip manufacturers in the world. This is likely a drop in the bucket in terms of the fallout if China decides it wants to wreck the world economy more than Russia and the pandemic already have.
If China invades Taiwan will blow up all those lines and then no one will get chips so China is unlikely to invade. And you can’t make modern chips without the lithography machines made by one Dutch company.
I want to be wrong, but I don’t think we will ever go back to business as usual. The car makers realize now that they don’t have to over produce to make money. The dealers are having a field day marking prices up and watching customers throw money at them just to get on a waiting list. I read today that a dealer near Chicago has a $20,000 mark up on a Maverick. Gouging, for sure. And I’ll bet that more than one person has already called, ready to pay that price. There is no practical incentive to increase production. The car makers will complain of supply line issues till the end of time. Our response will be, “Shut up and take my money.”
Dang. Sorry to be so cynical, but you asked.
“See, Ford plans on going with lithium iron phosphate (LFP) batteries for next year’s standard-range Mustang Mach-E electric crossover,”
Good to see them copying what Tesla and others have been doing for a few years now. It’s a smart move and will help them in the long run.
In the past, legacy car makers like Ford and GM seemed to have this idea that for BEVs to take off, there needed to be a battery cell/tech that could “do it all”.
And that was just ridiculous.
Hell a ‘do it all’ solution didn’t even exist for internal combustion engines after decades of development.
The used car market is insane. I am routinely seeing late model used cars on the market for more than their new counterparts, which makes me wonder who in the hell are the idiots buying these things. There’s a dealership near me with a used Rivian R1T for $139,500. A new one fully maxed out with all of the bells and whistles–including the tent and camp stove runs about $115,000. Sure you probably have to wait for it, but why in god’s name would anyone spend more money not to custom order the exact version they want. Boggles my mind. (I mean if for some reason all of my vehicles became suddenly inoperable at the same time and I couldn’t wait for a special order to come in I’d ride a bike and/or buy something Mark would feature.)
I live 4 miles from work and have biked it, but it’s not ideal. My cars break down and replacement is outrageously expensive? I’ll be getting an electric bike or scooter for my commute.
The LFP battery pack is a good move. They last much longer with lower battery degradation. Estimate between 300,000 miles and a million miles. You can charge to 100 percent as well without harming the battery. The downsides are that LFP battery packs have less energy density. Not best in real cold climate, not best for highest performance or longest range.
Our 22 Tesla model 3 RWD has the LFP battery pack. It’s EPA rated at 272 mile range and 5.8 second 0 to 60. We are very happy with the performance and range. Would buy an EV with the LFP battery pack again. We keep our cars long term so the durability is more important than a half second slower 0 to 60. Wishing Ford all the best with LFP batteries. Good move ????
At this point, I’m holding out for a LFP battery pack. The changeover is overdue. They’re superior in the ways that matter. The space in a car was only that precious when they were stuffing cells into a Lotus.
I don’t hate the original Tesla batteries, but any car after the original Roadster should’ve had LFP as the standard pack in the first place, and the others as a performance option.
The Dump: I think the auto market will collapse in the very near future for a variety of reasons I’ll talk about below.
Once people stopped being able to buy new cars outright and the overwhelming majority of people who wanted to buy a new car had to get a loan or some sort of payment plan the affordable car truly died.
‘Sure you can get that cheap econobox for X amount of dollars per month but what if I told you you can get a big ole *insert fuel hog luxury vehicle here* for the same monthly rate but just for a little bit longer?’
‘Where do I sign?’ asks the consumer.
This has gone on for so long automakers have been almost exclusively making expensive luxury fuel hogs that almost noone can afford to buy with their own money.
The Pandemic got rid of what miniscule savings people had.
Now that fuel prices have gone up and are highly unlikely to drop below $4 per gallon ever again suddenly the people who couldn’t afford to buy one of these expensive luxury fuel hogs but still got one now can’t afford to own them, and most new buyers in the market cannot afford to fill up the tank of one of these luxury fuel hogs, let alone buy one outright.
Oil companies have literally NO incentive to increase the supply of oil because it would reduce their profit margins and with basically every first world leader saying that they’ll be getting rid of ICE car sales before 2050 and the general contempt held towards oil companies by governments they know they’re on borrowed time. No oil company wants to sink a ton of time and money into a project like the Keystone XL pipeline only for a future government to shut it down before it’s complete and the oil company is left standing their with their unfinished pipeline in their hand… If I was in charge of an oil company all of our actions would be based upon minimizing exposure and even though pipelines are much safer than shipping by truck or rail I’d exclusively ship by truck or rail because I won’t have to build a bunch of infrastructure to do so that could easily be shut down before I can see any return on investment.
Because of this gas prices will only go UP long term.
Repossessions are at an all time high and I think it’s safe to say that the fuel efficient cheap cars are not the ones getting repossessed.
So we’ll see these used expensive luxury fuel hogs flood the used market after they’re repossessed, they won’t sell because the few who want one, can afford to buy them, and can afford to own them would rather just buy a new one. Banks and automakers will be hesitant to lend people money to buy said luxury fuel hogs due to the rate of defaults and how not in demand they are, as it stands currently there are hardly any new cheap fuel efficient cars on the market and those that are on the market are usually marked up drastically by stealerships, it’ll only get worse in the near future.
Automakers having gotten rid of basically all their cheap fuel efficient cars will lose obscene amounts of money designing new fuel efficient cars, retooling, fighting with unions representing the workers that used to build the expensive luxury fuel hogs, etc.
Most car companies will go bankrupt or get very close to going bankrupt.
Ford and Toyota are the only ones I see that will ride this out relatively well.
Basically all of Toyota’s line has some sort of hybrid variant that gets pretty decent fuel economy for reasonable prices. Ford Has the Lightning, The e-Transit, and the Maverick Hybrid that I think will keep selling and possible sell in even greater numbers.
Since so few people will be able to afford to drive they’ll have stuff like groceries and such delivered, well guess who’s making production electric vans that would be the most economical way to deliver said goods: Ford.
Businesses with Work Trucks see the advantage of going all electric and once Ford makes suitable variants of their F-150 Lightning for the given needs of the Business (like single cab long bed and such) they’ll sell a ton of them.
The Maverick Hybrid is arguably the greatest value as far as new cars sold today in the US market. It is a work pickup that could actually be someone’s. DD. I have plenty of problems with the Maverick but the price, performance, and practicality are not problems. With an increase of demand and hopefully more models (like a BEV one, AWD hybrid one, etc.) we’ll see more Ford factories retool to make Mavericks and with economies of scale have a ton of cheap, fuel efficient pickups.
Other automakers have some fuel efficient offerings but not enough to make up for the 90%+ of their lineups that they’re not making or selling anymore.
You REALLY haven’t been paying attention to GM and VW, have you?
GM’s only real hope is their Bolt and it’s not a good hope It’ll be years before they have other mass production BEVs and all the ones they have planned are not cheap either.
VW has minimal market share in the US and their BEVs are so damn buggy you wonder what happened to the guys who programmed the diesel emissions cheating software.
It sure seems like we’re overdue for a reckoning between the housing market and the car market. Yes inflation will cool things somewhat, but everyone needs a place to live and in the US many if not most people can’t get by without a car.
Given that you can live in your car, but you can’t drive your house to work, I’d bet the car market will be crazier for longer, and the industry will be halt to wring the diminishing blood from stones.
Happy, not halt
Why do I get the feeling that I’ll be disappointed in myself in 10 years if I don’t buy Rivian stock now?
Look where Tesla was in 2013, in about the same boat.
But I know nothing.
Ten bucks a week on a scheduled purchase is virtually nothing out of your budget, but it’s $520 a year and at least you’ll be in for $5,200 in ten years. Who knows what that’ll be worth then, but nothing says you can’t adjust your purchases along the way up or down based on what you can afford and when.
It’s so easy to buy fractional shares without any commissions these days that I really feel bad for anyone who isn’t educated enough to start investing early.
When I started investing, $45.00 per trade was a hugely discounted rate! And there was no such thing as fractional shares. You had to invest at least a thousand to make it anywhere close to worthwhile because you would lose 4.5% on day one, and expect to lose another 4.5% when you sold. You had a 9% loss baked in, unless you could come up with more up front.
I’m not saying to buy Rivian. But I am saying that you really have almost no excuse for regrets later, for not having at least a little bit invested into companies you believe in.
As companies they’re not even close to being the same.We won’t see skyrocketing share prices similar to tesla.
Reasons? Off the top of my head:
Not many truck buyers want EVs.No huge charging network.Much stronger competition.Much tougher loan terms than tesla had.
That said I’m sure they’re worth putting some money on! They’ll survive and do reasonably well 🙂
If anything, I hope for used cars to remain high priced forever, because then all the annoying internet commenters who call me stupid because I prefer to buy everything new will go away.
I wouldn’t place any bets on annoying internet commentors ever going away.
I mean, look how long I’ve been around…
You’re right. But my life would be better if we had less of the following Internet Commenter Guys:
-Only pay cash for cars Guy
-Bring back small trucks Guy
-Bring back small cars Guy
-Only buy used Guy
-PeOpLe WiLl BuY wAgOnS iF aUtOmAkErS jUsT bRiNg ThEm HeRe Guy
I suppose I’m an only buy used guy but thankfully for everyone else I don’t much care how other people spend their money and don’t give recommendations very often. I mean if someone is talking about the 7 year high APR loan they’re about to take out to buy a new Nissan Versa I’ll speak up. It would be criminal not to at least try to talk some sense into a person in that situation.
I feel seen, haha
But people will buy wagons if they bring them here and they do. My here is Finland though and we went almost straight from buying mostly manuals to EVs.
VW designing their own chips, yeah, sounds like a problem-free idea.
JLR, you up next?
A lot of people want A Car. The LFP ID4 could be a great lease for people who don’t drive very far. Vastly lower maintenance and no worries about fuel going bad.
Only problem with LFP, they don’t take a charge when below 0*C. So when you live in the great white north (aka Canada), it’s a real problem. Other than that they are pretty good batteries!
Built-in battery heaters are a thing. I do not know which vehicle manufactures use heaters, but in the vanlife world all the well-known battery makers sell models with built-in heaters.
Source: Me, my LiFePo batteries are heated. The battery management system won’t allow the batteries to charge if the temps are less than 32 degrees F. If I can create battery heaters in my garage then actual engineers can do it better and cheaper.
“. I do not know which vehicle manufactures use heaters, but in the vanlife world all the well-known battery makers sell models with built-in heaters.”
Practically all of them.
Everybody except Nissan in the Leaf – which is going away anyway.
I thought even the Leaf heated the batteries. It’s just the only one that didn’t also actively cool them.
“Only problem with LFP, they don’t take a charge when below 0*C.”
That’s with all Lithium batteries. And with proper battery management (including warming the batteries when needed), they absolutely can be charged when it’s below 0 Celsius outside.
well were doing our best to warm things up. give it a couple of years.
People holding onto cars for longer would probably be beneficial in a lot of ways but you’re not gonna break that societal standard we’ve set of ‘upgrading’ every few years. Cars are like phones, people like the newest version even if it’s objectively no better. I, personally don’t get it, if my company didn’t provide me an iPhone I’d probably still be rocking my Walmart cheapo phone!
Probably just an age thing but the longer I live the less inclined I am to change out anything that works.
Yup, and this is why you get octogenarians still going down to town hall to pay their excise tax. They know how to do it and it’s never been a problem, so why change now?
Personally, I’m very grateful to those people; they pay initial depreciation so we don’t have to. How else are we supposed to keep the used market supplied with reasonably priced off-lease and late-model cars!
“… you’re not gonna break that societal standard we’ve set of ‘upgrading’ every few years. Cars are like phones, people like the newest version even if it’s objectively no better.”
The data doesn’t back that idea up. The average age of cars and light trucks on the road in the US is now 12.2 years old. And, it has been rising steadily for the past thirty years or so. I couldn’t find a value for the median age, but as of a couple of years ago a full 25% of cars on the road in the US were 16 years or older. The US automotive market is huge and there are lots of people who change out their cars every few years, but those folks aren’t the norm.