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Although the 2024 Mach-e is out, Ford still has a fair amount of 2023 model year inventory, and are offering discounts of up to $8,100. This has apparently had the desired affect and accelerated the sales of the 2023s significantly, perhaps as much as 6x! I am a little surprised how sensitive these sales are to price - it's not a cheap car, and even $8,100 off on a top trim model is not a big percentage discount, and yet it's having a big effect. https://www.carscoops.com/2024/04/fo...o-ev-adoption/
The bigger picture is that this does show that demand remains strong for affordable EVs. The trouble is that most automakers lose significant money if they sell EVs at prices even close to competitive with ICE vehicles, so they are in a difficult position. Fortunately for traditional automakers, they do have ICE profits to underwrite their losses on their EVs. This situation shows why the White House shouldn't push to eliminate ICE vehicles too fast - they can kill off the traditional automakers if they do that, because when they say "You must get rid of your ICE vehicles and sell only EVs", they are in effect saying "You must get rid of your profitable vehicles and sell only money-losing cars."
Note that Ford's EV unit lost $4.7 billion last year. If you force them to try to exist on huge losses alone, the lights will be out at Ford pretty quickly. The same thing would be true at GM, Stellantis, Toyota, Honda, etc... I am sure there are some Democrats who will say "So what? It's the price we have to pay!". But I think that price is too high and we should find a way forward that preserves these companies, who are trying with their EV programs, and both directly and indirectly, provide many many jobs. https://electrek.co/2024/04/01/ford-...ffordable-evs/
Last edited by OutdoorLover; 04-03-2024 at 02:58 AM..
On that $4.7 billion loss, does that include the cost of the plant that builds them and the total cost of the R&D that went into them? Because if it does, that's not how amortization works.
The Escape EV isn't its own market. Buyers are choosing from Ioniq 5 which was running $15,000 discounts through February on 2023s and now doing very aggressive leasing since they can get the $7,500 tax credit that way, Tesla reversed the $16,000 markup they had during COVID on the Model Y. Ford was meanwhile doggedly trying to hold onto the $8,000 price increase they'd put in place while losing all of the the tax credit since it uses Chinese sourced batteries and then assembles the packs here which no longer suffices. Effect was the Escape EV ranged from $15,500 more expensive down to about $11,500 more expensive to which Ford responded by saying they just weren't interested in selling many of them.
Hyundai Ioniq 5 on the other hand - $1,500 price increase rather than $4,000 to $8,000. Responded quickly with a $15,000 price cut in response to poor sales and losing the tax credit. Effective was the price decreased by $6,000. When your competitor cuts prices by $6,000 and you increase prices by $15,000 bad things happen to your sales.
Ford's inability to operate as a business isn't a customer issue. Hyundai is making big money and while they don't break it out with ICE and EV, they're very positive on EVs. That and it's Hyundai. They don't exactly sell a lot of high-end premium ICE cars where they could absorb the kinds of losses Ford is running. They don't see the job of the ICE to be the sacrificial bottomless cash cow to fund huge losses either. They're just making money while putting out some cool cars, both ICE and EV. Latest plan seems to bring CATL to build the EVs for Ford. That's not a bad idea.
So why is it that Tesla is making money selling EV? What are the other car makers doing wrong? Tesla is not being supplemented by ICE sales at all.
Yes you're right, Tesla is in another class. The major differences that I know are that (1) Tesla has much more efficient manufacturing - and so a lower cost of manufacturing, and (2) Tesla uses extensive vertical integration, where they design, integrate and manufacture their own components - and traditional automakers' entrenched dogma is that it's much better to outsource everything to suppliers. Dogma isn't always correct.
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