Home » Yes, Ford Is Moving Full Speed Ahead On EVs Despite Losses

Yes, Ford Is Moving Full Speed Ahead On EVs Despite Losses

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A great deal of ink, both the internet kind and the real kind, has been spilled over Ford’s big losses this year on the electric vehicle front—and many have speculated those shocking numbers will lead to a retrenching and rethinking of EVs. In reality? Not quite, according to its future plans.

That leads off a Monday edition of the morning news roundup, and one where I hope you aren’t working too hard right before Labor Day. Also on today’s docket: the United Auto Workers union clear the way for a potential strike, Tesla’s Autopilot goes on trial, and more VinFast shenanigans. Let’s take a look.

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Ford To Axe Escape, Edge And Transit Connect Amid EV Push

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Yes, Ford is set to lose $4.5 billion more this year than expected on EV and battery production. You know who else has said that sort of thing is normal? Elon Musk. Getting ready for a different sort of future costs money, and though EV critics have thrown that huge cost up as an example of this pivot not being worth it, for Ford, it’s that or face a future where it’s less relevant and less competitive against new rivals.

But that does mean losing some gas cars to EVs, too. Automotive News reports that the Escape, Edge and Transit Connect are all headed for cancellation soon enough. The Escape will become an EV crossover (and the Bronco Sport is outselling it anyway), the Edge won’t be super missed and the Transit Connect will just live on in Europe. More on those future plans:

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Although the company is finding the electric transition to be harder than previously expected — it delayed some production goals this year — executives are speeding ahead with development of a second-generation platform to underpin EVs assembled at the new Blue Oval City plant in Tennessee and a retooled plant in Oakville, Ontario.

CEO Jim Farley recently said the company plans to quadruple hybrid sales in the next five years, following success with hybrid Maverick and F-150 pickups.

Ford freshened the Escape crossover this year with the latest Sync 4 infotainment system, over-the-air software update compatibility and an updated front end with an optional light bar. The plug-in hybrid Escape, introduced in 2021, continues but has become a separate trim. A standard hybrid variant also is available. As things stand now, however, Ford has no plans for a next-generation gasoline or hybrid model. Production is expected to end in 2025 before an electric crossover replaces it.

It’s got plenty of other gas cars and trucks to print money in the meantime.

UAW OKs Strike Against Big Three If Negotiations Fail

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Photo: UAW

On Friday, UAW members sent the message they’ve been waiting to send by “overwhelmingly” voting to clear union leadership to potentially strike during negotiations with the Big Three Automakers.

Note that this does not mean they’re on strike. They just OK’d their leadership to make that call for them if a deal cannot be reached, and have signaled they’re serious about all of it. The Detroit Free Press has a good rundown of the situation:

The strike authorization vote is more of a formality and was expected to pass, but given the strong rhetoric around the potential action against the automakers, it was given more weight this time than in the past.

On Friday midmorning, the UAW said final votes were still being tabulated, but the current combined average across the three automakers was 97% in favor of strike authorization. The UAW did not provide raw vote numbers or release how many of the 150,000 members who work across the Detroit Three automakers turned out to vote.

The vote does not guarantee a strike will be called, only that the union has the right to call a strike if it cannot reach an agreeable tentative contract. The current contract expires Sept. 14.

“Our goal is not to strike, our goal is to bargain a good contract for our members. But we prepare for a strike so that we’re ready no matter what happens,” UAW President Shawn Fain told members during a Facebook Live broadcast Friday from UAW Local 862 near Ford Motor’s Louisville Assembly Plant in Kentucky. Union members there were holding practice pickets Thursday and Friday.

Are the automakers prepared for a strike, parts- and inventory-wise? Kinda, but there’s only so much you can do:

Ford’s inventory, which the automaker does report, has dropped by more than 12% in August compared with July, he said. Ford’s inventory drop is normal for this time of the year, he said, noting that production of some key vehicles, like the Explorer and Expedition, were abnormally low in June and July, possibly due to a lack of parts. Additionally, the Mustang and Ranger small pickup are transitioning between generations.

“While dealer inventories haven’t grown significantly, there are a few more vehicles available to cover a short strike, but there’s simply no way the automakers could prepare for a protracted factory shutdown,” [Sam Fiorani, vice president of Global Vehicle Forecasting at AutoForecast Solutions] said of the Detroit Three.

The UAW’s contract with the automakers expires a minute before midnight on Sept. 15.

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Autopilot On Trial In California And Florida

Photo: Tesla

People often forget this, but a big reason Tesla’s stock price is valued so highly is that Elon Musk keeps saying it’s got the whole “self-driving car” totally handled. Never mind the fact that he’s been saying so since 2016, or thereabouts—autonomy is key to Tesla’s future value.

But Autopilot is about to face two major court cases that could shape its future, both in terms of liability and the overall legal bills that are piling up. Here’s Reuters:

Tesla faces two trials in quick succession, with more to follow.

The first, scheduled for mid-September in a California state court, is a civil lawsuit containing allegations that the Autopilot system caused owner Micah Lee’s Model 3 to suddenly veer off a highway east of Los Angeles at 65 miles per hour, strike a palm tree and burst into flames, all in the span of seconds.

The 2019 crash, which has not been previously reported, killed Lee and seriously injured his two passengers, including a then-8-year old boy who was disemboweled. The lawsuit, filed against Tesla by the passengers and Lee’s estate, accuses Tesla of knowing that Autopilot and other safety systems were defective when it sold the car.

The second trial, set for early October in a Florida state court, arose out of a 2019 crash north of Miami where owner Stephen Banner’s Model 3 drove under the trailer of an 18-wheeler big rig truck that had pulled into the road, shearing off the Tesla’s roof and killing Banner. Autopilot failed to brake, steer or do anything to avoid the collision, according to the lawsuit filed by Banner’s wife.

Horrific on both counts. And here’s why the two matter so much:

“If Tesla backs up a lot of wins in these cases, I think they’re going to get more favorable settlements in other cases,” said Matthew Wansley, a former General Counsel of nuTonomy, an automated driving startup and Associate Professor of Law at Cardozo School of Law.

On the other hand, “a big loss for Tesla – especially with a big damages award” could “dramatically shape the narrative going forward,” said Bryant Walker Smith, a law professor at the University of South Carolina.

Tesla also faces a probe into Autopilot by NHTSA, which is due to wrap soon, and a Justice Department criminal investigation over its self-driving claims as well. It’s all looking… not great, to put it simply. [Ed note: Patrick covers all of this in the latest episode of Vox’s Land of the Giants podcast, which I can recommend – MH.)

VinFast’s Stock Price Continues To Prove That Wall Street Is Mostly Make-Believe For Grown-Ups

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Photo credit: VinFast

As I write this, Vietnam’s VinFast is now the world’s third-most valuable automaker by stock price, despite, well, reviews where the headline is just “Yikes.” Keep in mind it’s because it went public in the U.S. with a SPAC deal and then nearly all of the shares were bought by one man, VinFast’s billionaire owner. But since then the small amount of shares that are for sale have spiked prices upward in crazy ways, reports Reuters:

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Shares of Vietnamese electric-vehicle maker Vinfast surged 30% in premarket trading on Monday, extending a rally from last week that more than quadrupled its market value to $160 billion.

The company made a blowout debut on Wall Street this month and has quickly grown in valuation to become the third-most valuable automaker – only behind Tesla (TSLA.O) and Toyota (7203.T).

But Vinfast’s small amount of publicly available shares has made the stock prone to volatility, with shares jumping or slumping more than 14% in 11 of the past 12 sessions.

The stock was on track to add nearly $50 billion to its market capitalization, based on the premarket share price of $90.55.

That potential one-day gain will be more than the individual valuations of major U.S. automakers Ford Motor (F.N) and General Motors (GM.N).

I hope everyone involved with this is just having such a fun little time.

Your Turn

Is Ford doing the right thing with its future strategy?

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Lokki
Lokki
9 months ago

OF COURSE Ford is pressing full speed ahead on EV’s. The U.S. government just gave them $9 billion to do so, with the implication of more moola to follow.

https://www.bloomberg.com/graphics/2023-ford-ev-battery-plant-funding-biden-green-technology/

Ron888
Ron888
9 months ago

Firstly, thanks Matt for making us aware of Patrick’s podcast. I’ve only listened to one episode so far, already very impressed Patrick!

Onto my main thought: There’s one aspect of Tesla’s system (and to a lessor extent,other brands) that have always driven me nuts. They’re making incredibly obvious errors that shouldnt ever happen. I know i go on about this a bit but it’s basic common sense.
If a system fails where danger is at it’s highest, why is it allowed at all?!
Things like not being able to see a giant vehicle parked across the road,turning into oncoming traffic,not recognizing solid objects,not reliably seeing humans, and so on.
These are unbelievably important aspects.
The advances in other areas are trivial by comparison.If a system can’t get the most dangerous aspects right it shouldnt be allowed at all!

Last edited 9 months ago by Ron888
Methane generator
Methane generator
9 months ago
Reply to  Ron888

I agree fully with your points. The percentage chance of an exception occurring are vanishingly small, but the effect, the risk of severe injury or loss of life when it does occur, is huge. It’s similar to air crashes in a lot of ways, but the big differences are that a) people board aircraft fully aware of the risks, whereas Tesla drivers often are not, and b) occurrences typically only affect the occupants of the travelers on the plane, whereas unpiloted Tesla vehicles will *usually* involve others beyond emergency services.

Alpha (sure to break) and beta (quality improvement) testing should have different rules. Tesla’s ‘Autopilot’ product is currently in a alpha test state. It likely will be until Lidar is incorporated and some means of keeping the driver engaged is discovered.

Gary Lynch
Gary Lynch
9 months ago

The US government is talking and dangling $$$ to everyone is sight to promote EVs. While the reality is that the industry, infrastructure and public are not there yet. And it will take 10+ years to get even close. RE: Tesla.

plug in hybrids make so much sense as a transition step. And maybe beyond transition, since that helps the range factor for long trips. I believe in 5 years PIHs will be far more plentiful.

Certain groups think we all need to go green RIGHT NOW. However now is not possible. In a short order that fact will be made clear. Investors do not like short term losses in the billions.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
9 months ago
Reply to  Gary Lynch

> While the reality is that the industry, infrastructure and public are not there yet.

It won’t get there unless it’s forced to, hence the ambitious goals and incentives.

Methane generator
Methane generator
9 months ago
Reply to  Gary Lynch

Your prayers are answered! PHEVs are part of the US Gov plan to promote EVs. RIGHT NOW

JDE
JDE
9 months ago

Ford is doing what they think is the correct thing considering the insane push for EV’s. Had the Gov’t actually spent all that money they poured into the current EV producers in the form of tax incentives, into actual EV infrastructure to support the future sales, I think we would be in a much better place. As it stands it seems like their are still massive issues with available and functioning Charging stations nationwide. And that coupled with increased required wait time for charging has made even the cheap Ev’s somewhat hard to adopt.

Methane generator
Methane generator
9 months ago
Reply to  JDE

I think that’s what they were told they were buying. Infrastructure. It’s on the manufacturers who promised to deliver what was paid for already. If the manufacturers didn’t forecast a need for charging infrastructure when they took those incentives to promote BEVs and PHEVs, then they’re not very good at business.

Paul B
Paul B
9 months ago

Re: Vinfast.

Driving by the dealership and my son asks what they are. Tell him they’re Vinfast. He then says “they look like nothing, really boring.”.

Either a great or terrible thing to say about them.

Ivan256
Ivan256
9 months ago

The big three? So….. VW, Toyota, and Mercedes-Benz Group?

JDE
JDE
9 months ago
Reply to  Ivan256

The Big Three in the automotive industry is a reference to the three largest car manufacturers in the United States: General Motors Company, Stellantis, and Ford Motor Company. Regardless who is currently the leaders worldwide.

And I think Stellantis is Bigger than Mercedes at this point. Not that I like anything they make now that they have castrated Dodge.

Ivan256
Ivan256
9 months ago
Reply to  JDE

Yes, and my comment was clearly a joke lampooning the absurdity of considering any particular manufacturer differently because they’re “domestic” rather than in light of the global market, considering none of the “big three” have any fully-US sourced and built models anymore.

EmotionalSupportBMW
EmotionalSupportBMW
9 months ago

I feel like Ford is voluntarily Chipotle-izing its self. Hear me out, Chipotle, makes burritos and that’s basically it. Ford, is just making kinda off-road oriented 4 door truck-espe things. Plus the Mustang which is the chips of this metaphor. Chipotle, doing great when burritos were cool. Chipotles start popping up everywhere. Chipotle was like we don’t really need to innovate the main thing, we need a new concept. So, they start a series of burger concepts, like Ford starts EV concept. Haphazardly. But Chipotle doesn’t care, we all love burritos for years now. Than the American consumer, notably fickle and irrational. Decides while burritos are cool, maybe we’ve been eating too many. So everyone decides we do lunch at the Pokė place and only go to Chipotle once in awhile. Chipotle then does a poor attempt at queso and chorizo in desperation.

So, in summary. Ford seems to be focusing on the current cool, and what they hope will be future cool. But they lack flexibility and if the consumer decides to Poke their Chipotle. It seems like a lot of risk here for short term savings on development cost of limited offerings. If they still had expansive global development, could give them a short term fail safe. But I think they just make the Puma or whatever now. Do I think they will go out of business, no. Someone will always want a F150. But they could get a hefty bill for development with limited short revenue stream if they are wrong.

Anyways, thanks for coming to my TED comment.

Data
Data
9 months ago

I’ve only been to Chipotle twice. Once I realized they didn’t have queso they were no bueno. Then they added queso, but the reviews were mediocre. One compared it to chalk so I didn’t bother. I wish the Q-Doba’s near my hadn’t closed. Their three cheese queso is excellent. Moe’s queso is ultra bland melted plasticizer.

This has nothing to do with cars other than eating queso in the car is probably a bad idea. If the desicated french fry between the seat and center console is bad, imagine melty cheese dripping down there. It might start to look like the Autopian Biological Hazard Scion xB.

In any event, Ford has to forge ahead. This is where the market is heading and they don’t want to end up with nothing to offer. At least until the market shifts again and Toyota comes out on top with Hydrogen or cold fusion.

MATTinMKE
MATTinMKE
9 months ago
Reply to  Data

Mmmmmm. Doba.

Space
Space
9 months ago
Reply to  Data

All these car companies are really going to have egg on their face when cold fusion comes out in 50 years.

changedmynameasIworkinadealershipandsomeofourbrandsarentgreat
changedmynameasIworkinadealershipandsomeofourbrandsarentgreat
9 months ago
Reply to  Space

Ford would be really annoyed given the Ford Nucleon concept of the 50s if that happened

Last edited 9 months ago by changedmynameasIworkinadealershipandsomeofourbrandsarentgreat
changedmynameasIworkinadealershipandsomeofourbrandsarentgreat
changedmynameasIworkinadealershipandsomeofourbrandsarentgreat
9 months ago

Comment appreciated. Here in Australia, Ford basically exists because of the Ranger (usually top or top 3 selling car each month) and the Mustang, they ditched the Escape recently as well as the Focus and Fiesta. So they have Ranger and Everest (a 7 seater based on the Ranger) and soon we get the Mach E. They are basically dependent on favourable tax law for small businesses being able to depreciate pick ups. I think by the time Mach-E gets off the Ro-Ros, there will have been 10+ cheaper Chinese EVs (MG ZS EV, BYD Atto 3 do pretty well here already) and everyone else will probably just by a Model Y (which is also one of the best selling cars here). They shot themselves in the foot reputation wise by putting a dud transmission in what was otherwise a competitively priced and equipped car (powershift in the 3rd gen Focus and later Fiestas), launched SUVs nobody cared about (Edge – Endura here which lasted less than 12 months) or named badly (Kuga which was too close to Cougar with those connotations, rebadged as Escape later) and to be fair killed a good large car which everyone misses but never bought enough of in later years to make viable (Falcon).

Methane generator
Methane generator
9 months ago

That’s a terrible analogy mainly because it’s so distracting but also because it doesn’t do the one thing that an analogy is supposed to: analogize.

But funnily enough a Poké place opened up just next to our favorite Chipotle. (It’s our favorite because they put three sides instead of two in the kids’ meals, and they listen to the grownies. Also no cockroaches, unlike the filthy joint near the mall.)

Droid
Droid
9 months ago

“Ford is set to lose $4.5 billion MORE this year THAN EXPECTED on EV and battery production”.
losing money?
losing more money than expected!
this can only mean that the stockprice will SOAR!

Drew
Drew
9 months ago
Reply to  Droid

Probably. Someone will point to potential future profits and say Ford is undervalued, there will be a buying spree, and it will jump in price. Then, a bunch of people who looked to be losing money will sell while it’s high, and it will drop back to a reasonable level. Repeat until they make a profit on EVs, at which point the profits will be too low and predictable, so the price plummets until someone spreads a rumor they’ll shake up the automotive sector with something new.

Speculative stock trading is a mess.

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