I run an automotive history site, but the first thing I read every morning is autonews.com. The industry is going through one of the greatest disruptions ever, and it’s a show I love watching unfold, in real time. Of course I’m referring to the transition to EV’s, and Tesla’s outsized impact in driving that and influencing it. Things have been quite exciting enough, but then Tesla announced massive price cuts of up to 20% on all of its models on Jan. 13.
This is a huge deal, not just because it stimulates Tesla’s demand, but because Tesla is following Ford’s Model T strategy, dropping prices because they can. Tesla has very fat profit margins ($15k gross profit per car) due to their rapidly growing production volume and their relentless drive to improve production efficiencies. Meanwhile, essentially everyone else is losing money building EVs. Seriously; but no one in the industry likes to talk about that ugly little fact any more than necessary. Marin Gjaja, chief customer officer for Ford’s EV unit did so this past weekend at an industry conference.
Ford’s price cuts on the Mach-E are significantly less than Tesla’s ($600 – $900 for the Select Standard Range versions, peaking at $5,900 for the $70k GT ), but they had to do something.
We have to compete,” Marin Gjaja, chief customer officer for Ford’s EV unit, told Automotive News this weekend at the NADA Show in Dallas ahead of Ford’s announcement. “It’s a competitive marketplace, and it just got a lot more competitive because of what Tesla did. We’re not going to cede ground to anyone.”
“Mustang Mach-E is not profitable and it’s not going to be profitable, although by trim series it does vary a little bit,” he said. “We’d like to be more profitable, and we’re working furiously to get the costs out of these vehicles.”
Ford is also increasing production of the Mach-E, to some 130k units in 2023, roughly half of which are destined for Europe, where the EV market is much larger than in the US and where Ford is desperate for product until its own VW-based EVs come on line. Speaking of Europe, Teslas Model 3 and Model Y were the #1 and #3 best-selling cars in Germany in December (the whole market, not just EVs).
Globally, in 2022 Tesla’s Model Y was the #4 selling car (759k), just behind the Ford F-Series, and up 88% over 2021. The Corolla was still #1, but down 2%, the RAV4 was #2, down 14%. The Camry was #5, down 3%, the Honda CRV was #6, down 18%, and the Tesla Model 3 was #7, up 3%. The Model Y is currently on a trajectory to be the global #1 best selling car in 2023.
Tesla’s Austin, TX. and Gruenheide, Germany plants are still in the ramp-up phase, and Tesla projects some 1.8-2 million total production in 2023, the overwhelming majority being the Y and 3. Meanwhile, Tesla’s per unit car costs to build the Y and 3 has been dropping steadily, not just because of the sheer volume but also because Tesla is steadily finding ways to lower their production costs.
All this is to say that Tesla undoubtedly made every car company CEO very unhappy on January 13. And that unhappiness is not going to go away for possibly quite a while. Ford is already re-engineering the Mach-E trying to find ways to simplify it and reduce costs, as is everyone else, undoubtedly. But as Gjaja said, all they can hope to do is to reduce the losses on the Mach-E.
What about Ford’s F-150 Lightning, which has the EV pickup market largely to itself for now, as Rivian’s production numbers are still very small (and don’t even ask about their profitability; they’re expected to burn through another $4-5 B in losses this year), and GM’s numbers are also still very small yet. Ford had to massively jack up the prices of the Lightning this past year, increasing the base Pro from $40k to $56k in two big steps. The XLT long range is now $81k and the Platinum is $97k. But Ford’s CFO told investors in 2022 that Ford would not see any profits on its first generation EV trucks. The current Lightning is heavily based on the regular F-150; the next generation will be designed from the ground-up as an EV, as are Rivian, GM’s EV trucks, and the Tesla Cybertruck, which will be going into production this year, and ramp up in 2024.
Ford keeps saying that the launch of the Lightning is “A Model T moment”. But it’s the conventional F-Series that’s generating all the profits to offset the Lightning’s losses.
In the meantime, lithium ion battery prices have actually increased over the past year, after ten straight years of declines. The global average for battery packs is up to $151/kWh, meaning that the pack in the long range Lightning (131kWh) alone costs some $20k.
Since we’re on the subject of the big changes in the global automotive market, China is set to overtake Germany as the #2 global exporter of cars (Japan is #1). A number of Chinese EV brands such as Xpeng have opened store and are selling in rapidly growing numbers. The UK and Belgium are currently taking some 70% of Chinese EV imports, but sales in other European countries is set to grow rapidly in 2023.
Chinese EVs were almost certainly going to come to the US too. BYD, the world’s second largest EV maker after Tesla, spent considerable amounts in researching and developing a major push into the US market this past year, but the IRA act has made EV imports essentially unfeasible, as all the new federal tax credits require US sourcing and production of batteries. Protectionism is alive and well; the Europeans and Koreans are quite upset too. So they’ll all start building battery plants in the US; some already are at it.
We live in interesting times, and companies like Tesla have made industry watching a whole lot more interesting yet. Will Tesla replicate the Model T’s success, through relentless increases in volume and production efficiencies, thus depriving everyone else any profits from EVs? So far, it quite apparently is.
Tesla has had a “Project Highland” (undoubtedly named after the Model T’s Highland Park factory) going for almost two years, to redesign the innards of the Model 3 and revamp its production facilities in Fremont, CA. for further cost reductions. The resulting Model 3 V2.0 is expected later this year, and will allow Tesla to either lower prices further or just bank larger profits, depending on what the market seems to suggest to Elon Musk. It’s another key chapter of the Henry Ford playbook. Meanwhile, the competition is spending mega-billions developing and building more unprofitable EV models.
Elon Musk’s personality traits do mirror Henry’s to some degree or another. Both were the richest men in the world in their times, which undoubtedly played havoc with their egos. Henry’s big mistake was staying with the Model T for too long. Will Elon make the same mistake? Does that even apply? By the way, Elon Musk has a Model T in his small car collection. Presumably he knows its history well.
Looking it up so you don’t have to. The only 20th century cars in Musk’s collection (cars come and go, so they may not all be there still), Ford Model T, E-type Jaguar, McLaren F1(1997), BMW 320i (!), and the “Wet Nellie” Lotus Esprit submarine mock-up from the James Bond movie. The rest are newer, and are mostly Teslas.
Sure seemed like there is a solid analogy between Musk and ‘Crazy Henry’ (as he became known in later years). Of course, I doubt anyone dared call him that to his face (especially if they worked for him).
OTOH, I would guess that all outrageously successful business people (particularly with a brand-new product) share out-of-the-box characteristics, so it’s probably not that unusual.
Ford: Off my list (along with Lincoln) until they decide to bring sedans back. Even then, I may never purchase another Ford product again.
Mach E: Nice enough looking in the right color and if you get the full paint job (I’m referring to the ugly black plastic so many use around the bottom and wheel arches). But even if I was interested in one of these, those ridiculous door handles/openers along with a dash and tacky center screen would kill it for me. Fords lack of reliability would be the nail in the coffin.
Ford sedans are likely to come back as plastic-wood paneled Country Squires. All the years of huge rebates and low resale values did them in.
Disagree with your way of looking at it. Just like the boxes (SUV’s) and trucks have evolved, so to did the sedan. So because Jeep offered one of the first SUV’s with fake wood paneling, does that mean all SUV’s should have it and that’s how they should be looked at? Of course not.
Shame on Ford for giving millions of yearly buyers a snub. Not only that, but do you really think Ford or anyone else won’t go back to huge incentives to move vehicles (hint, the rebates have already begun again)? It doesn’t matter if it’s a sedan, SUV or truck. If it’s not moving, they will incentivize it. Let’s not forget the not that long ago years of 2008 and 2009 when you could buy brand new Jeeps/Fords/Chevy SUV’s and trucks for thousands below invoice and in some cases a new Jeep Commander or GC for half the MSRP.
I’ve got agree with Chicagoland. There’s only so much of a market for sedans these days, and Honda, Toyota, Hyundai and Kia are mopping up that continuously shrinking market. Ford’s financial strength is their trucks, so why not focus on that?
Compact CUVs have replaced sedans as the go-to option. As has been pointed out numerous times on this and other sites, a Toyota RAV4 -sized vehicle is roughly the same size as cars before the longer-lower-wider mantra overtook the industry in the ’50s. More upright (comfortable) seating, cargo space as needed…what’s not to like?
Dave M: “There’s only so much of a market for sedans these days, and Honda, Toyota, Hyundai and Kia are mopping up that continuously shrinking market. Ford’s financial strength is their trucks, so why not focus on that?”
Exactly. That is true for any category no matter if SUV, Truck or car. So why allow those other brands to sweep that market?
What’s more, although trucks are Ford’s “strength”, it’s never a good idea to place all your eggs in one basket. Not only did Ford to that, but they torched the other baskets while running naked down the street yelling screw the cars!
Yep, Ford’s strategy is wonderful for today’s market: Trucks and SUV’s/crossover’s are everything.
I can remember when minivans were everything back in the 80’s/90’s. Nowadays, you either got to be a hauling efficiency geek or a dedicated mommy to be seen in one.
What’s Ford going to do when the style changes yet again, and SUV’s/crossover’s become as popular as minivans are today? Couple that with pickup trucks going back to being work vehicles (yeah, I can see that style changing, too), and there’s going to a mad scramble to start producing something else.
They ought to bring those back too.
We’re gonna look back on this as the era where the dorks were in charge. These dorks think a jacked up electric hatchback is a Mustang. They also think that profitability is so 20th century. We’ll see.
Oh, and Tesla’s cutting prices because they have to. Their dear leader’s mouth is getting them in trouble. Tesla is the default car in my neighborhood, or it was. I’ve seen four of them traded in on my block because the owners are embarrassed to be associated with Musk.
The thought of all the child slaves mining for cobalt who don’t even have clean drinking water and we gleefully chat about EVs. The more things change, the more they stay the same.
Not only does Ford struggle to produce an EV as efficiently as Tesla seemingly can but Ford (and other older competitors like GM) is burdened by the stranglehold of union pension obligations. Tesla is completely free from that onus. Ford really can not afford to compete in the EV market.
Maybe Ford should stick to mostly ICE rather than risk the company in an EV battle it probably can not win.
It wouldn’t surprise me if ultimately Tesla’s charging infrastructure becomes more profitable than their car manufacturing. EV charging infrastructure is going to be a massive business in the next decade and more, as homes, refueling stations, and truck stops spring up all over and the grid is upgraded to handle it. Right now, the biggest advantage of buying something like the Model Y is not that it’s a better car overall than what the likes of Ford or Hyundai are offering, but that buying a Y gives you access to Tesla’s Supercharger network which remains more numerous, easier to use, and more reliable than the hodgepodge of other on-the-road chargers available, many which require downloading an app to use and/or are otherwise more cumbersome to operate than the gas pumps we’re used to. Home AC charging is still the main way to keep your EV juiced if you have a garage or at least dedicated parking, but DC fast charging is still crucial for anyone who goes on longs drives occasionally or more, or who doesn’t have access to home charging. Tesla just has a big head start in both cars and chargers, and it will be interesting to see if they can maintain that. I think they will for the next few years, but beyond that it’s more difficult to forecast.
You’ve got it exactly. With everyone else, you’re buying a car. With Tesla, you’re buying a system. An integrated system that covers you on a long distance trip.
One of the guys in my local EV car club, who owns a Tesla 3, had a Polestar 2 as a month rental this past fall (collision damage on the Tesla). His verdict? “The Polestar is a wonderful car, but a mediocre computer. The Tesla is a good car, but an incredible computer.”
There’s talk about Tesla opening their charging network to competing brands. While I’d love to see that happen for my own use, from a business sense it’d probably be about the dumbest thing they can do. It’d be giving up their absolute advantage.
They can open their charging network once it’s no longer the huge advantage it Is now.
I for one don’t want to drive a computer and I suspect many feel the same way. That said the charging scenario must be streamlined for all EV buyers.
Its hard to see how Tesla makes money on their charging networks, which are proving to be very costly to maintain, require frequent updates and expansions, and it isn’t clear that they are actually charging customers a price for the electricity that allows them to make a profit. They also don’t make any money selling coffee, soft drinks, snacks, washer fluid, etc. that are the profit centers for gas stations. Furthermore, they require a heck of a lot of land (because charger churn is much slower the pump churn at a gas station), which is very expensive in most urban locations where most Teslas are driven. On the other hand, in more rural locations the land is cheaper, but electrical capacity can be iffy and charger infrastructure utilization rates will tend to be low (due to low EV population density). The Tesla charging network is great for Tesla owners (so far) but other than to help sell Tesla vehicles (which it does) the business case for the company doesn’t seem to be solid.
Type44: There are exactly 3 reasons why I will not buy/lease a Tesla.
1. Musk.
2. Musk.
3. Poor quality/reliability.
Makes me wonder how many people refused to buy a Ford back in 1925 because Henry was a bigoted jerk? (Oh, that’s right, his views were closer to the mainstream back then.). And reports of Tesla unreliability are nowhere near as high as the Internet blows them up.
Syke: Care to share a source for just how reliable (or not) the Tesla’s are? Going from what little you can get online, they are not that good. Just read an article this morning of where a Model Y driver had the steering wheel fall off twice and the car was less than a week old. Also, how do you know the “mainstream back then” was the same as Mr. Ford? Even if they were/are, does that make it ok?
Much of the “reporting” that is negative Tesla is from outlets that rely on advertising. Tesla neither pays for advertising nor do they distribute “press” cars to “journalists”. Think about that for a minute.
Recall that there used to be nigh-weekly articles about EVs catching fire…right up until every other major car manufacturer started trying to hatch their own EV. Oh, oops, those articles mostly stopped or were significantly reduced in their frequency. EVs sometimes catch fire just like other cars do. Chevy Bolts had issues with their batteries burning down people’s homes. So however did a whole series of Hyundai, Kia and Ford internal combustion engined power cars along with others…
Tesla had the same issue in other countries, notably China, with their “press” or internet personalities reporting various “issues”. Tesla over there went after them in their court system, and were in virtually all cases vindicated. As of yet they have not done so over here very much if at all, I could see that changing one day though.
My wife and I actually own a Tesla and have done so for almost 27,000 miles. It’s been almost flawless, easily on par (or better) with any other brand new car we’ve ever purchased.
And lest you think I’m a Tesla-fanboi, feel free to go through my posting history, I was as big a doubter as anyone here and am no fan of Mr. Musk. The cars are simply good. There may be a bad apple or a few in the bunch, but no different than any other car manufacturer and whatever they are selling. They may not appeal to everyone and not everyone is suited to them (or EVs in general) but a lot of information on the internet or news is simply incorrect. Imagine that.
Your steering wheel claim is as far as I can tell, incorrect. It wasn’t one person who had it happen twice, but rather two people who each had it happen once (or please post your source to the contrary). All outlets reporting that I could see were ad supported. None of them actually “investigated” but took the claimant’s word that it happened. In this YouTube age, people claim all kinds of things. Tesla is a high-profile target. Nobody cares if a Mazda or a Buick loses their steering wheel (nobody even knows they still sell those!), if it’s a Tesla everyone has an opinion. You say you work at a car dealership, ask your service people if customers always come in and tell the truth about their cars. These incidents may in fact be legitimate occurrences, I do not know for certain. However you do not either. It does appear that Tesla took the claimant’s word for it, and had the car flatbedded to their facility. That’s the correct approach to take, right?
I guarantee though that if Tesla finds out that it was not their fault, these outlets will not report on that with anywhere near the same vigor, just like every claim of “unintended acceleration”…or I missed the 60 Minutes follow-up episode where they explained for an hour how they lied about that or the one with the self-exploding GMC pickup gas tanks etc…
It comes mostly from Consumer Reports, which does not rely on advertising.
https://insideevs.com/news/549130/consumerreports-tesla-reliability-poor-2021/
Jim: You are probably correct in the two separate instances where the steering wheel fell off on 2 different people. I may have missed that when I skimmed over the article. But the one I read/skimmed was also showing pictures and screen shots of the text messages to/from Tesla. But either way, if twice to one person or once to two people, does that make a difference? I’ve been driving for 45 years (started on the farm at 10) and had my license since 1983. I’ve owned a lot of new and used cars. Not once have I ever had a wheel (steering or other haha) fall off. And if I did, I’d never buy that product again.
My experience with Tesla, admittedly, is slim at best. I’ve ridden in exactly 5 of them with Lyft/Uber. Of those, 3 were the Model 3 and 2 the Model S. Just me, but I was absolutely not impressed with any of them. On top of that, our dealership traded a Model 3 in on a Volvo. It was a very attractive car in white with the white seats. Newer car with very low miles. I took that opportunity to walk around and sit inside. The fit and finish was certainly not to GM’s standards and some of the center console plastic pieces felt very cheap and one was broken off. I wouldn’t accept that on a 10 year old car.
But bottom line is that I don’t have a personal issue with Tesla cars and I think they are great for many people. But based on MY experiences and what I know/read about Musk, I’m out.
I work in an office park north of Seattle. Tesla has leased out much of the unused parking space there to store and prep new cars for sale. It is filled with a few hundred new Teslas. When I have walked through the lot, the panel gaps all look pretty narrow and consistent. That is a big change from Tesla’s early cars and likely indicative of their overall build quality these days. They’ve learned a lot in the past few years such that I’d say they are out of the beta testing phase.
Still not going to buy a Ford/ Lincoln because there isn’t a vehicle in the current lineups that interests me. All uninspiring and bland.
A few other things in Tesla’s favor. The relatively austere interiors and exteriors of Tesla cars are more than just a fashion statement – they make the cars incredibly easy to assemble with fewer parts and components to install and assemble.
Also, the Model S has been rolling on the same platform since 2013, the Model 3 since 2017. With no second-gen model of either car anywhere in sight, Tesla can leverage the cost benefit of fully amortized tooling while other makers need to invest tens or hundreds of millions in new production and assembly technologies.
Tom, I think your second paragraph is important but maybe for slightly different reasons. By keeping the exterior appearance the same, Tesla certainly is saving on body tooling. But they’re’ also reinforcing the brand identity, similar to VW Beetles looking almost the same for decades even though there were significant changes underneath from an early 1200 to a Super Beetle with McPherson struts etc. Instead, Tesla is investing a LOT into the underpinnings … megacast chassis, new batteries etc. Those under-the-skin changes both improve function and reduce production costs. As some one with a long career in design and manufacturing, whether Musk or his staff get the credit for this strategy, I think it’s brilliant and the exact opposite of the classic 1950’s through ‘70’s Detroit model. Personally, I’m hoping the S, 3, and Y designations endure as long as Civic, Accord, or Corolla.
No doubt. If you are stealing a playbook to take on Detroit, you can’t really do much better than VW’s from the 1960s.
Generally speaking the biggest expense in building an EV is the batteries, hence why Musk has spent so much capital to build his own, Ford is struggling to get to that same place – will they make it – who knows? But they have just about as good a shot as any of the mainline automakers. Ford’s Model T did outsell everything else, but many other brands survived and thrived during that time. There will be a market for non-Tesla’s, even at a price-premium, if only because there will be folks who just don’t want to buy a Tesla, as we see above.
Those inventor types all tend to be crazy. Edison was too (Edison and Ford went camping together, there is a play written about it). Tesla as well. Newton spent a lot of mental energy on the occult, theology, and alchemy.
Ford sells the MachE motor for aftermarket installs. I wish it was set up for a longitudinal application.
Maybe stop calling it a Mustang?
Yes. Many feel that it’s an insult to the “proper Stang” and features desperate styling ques from its petrol brother and riding on its success ” Oh look it has a Mustang steering wheel” . It’s hard ride has been criticized .
Suspect build quality is way above Musks i-phones on wheels. That ain’t saying much I’ve seen
old Eastern block cars built better. Teslas uneven panel gaps just scream at you. Well, your not paying for quality you 3rd paying for the latest technology which is worth more to New buyers than longevity. ..
Perhaps Ford should have called this car the Pinto?.
Yes, Pinto would be more fitting for an EV. Most Ev’s catch fire soooooo in the spirit of the Pinto, this would be the best name with keeping up tradition.
I call them “Estangs”.
“Futura” was right there waiting…
I have no end of fun remindiing hard-core Mustang owners that, “Ford builds the car, Ford named the car, Ford owns the Mustang name. Therefore, it’s Ford who gets to decide what is and isn’t a Mustang, not you.”
Yes, I can be an arrogant smart-ass. I’ve also been long sick of car gatherings being overrun with Mustangs, Camaros and Firebirds.
On top of that, I don’t think anyone who’s seriously considering buying one cares about muh V8 RWD 2-door.
Really, the surprise is that it’s taken Ford *this long* to expand the Mustang nameplate to a multi-model sub-brand. And that Dodge has built knocking on 20 years of four-door Chargers without doing a “you HAVE to have a 2-door? Well here you go!” April Fools’ announcement featuring a Charger with two gaping holes where the rear doors would normally be.
Nah, that was marketing and brand-extension brilliance in my opinion. 3+ years later, here we are still talking about it. Plus the Mustang styling cues are pretty decent. No one is going to walk into a Ford dealership looking for a Mustang GT and drive out accidently with a MachE.
How are you off for power generation capacity in America?
Here in Victoria, Australia, power outages in summer aren’t unusual, because the state lacks the generation capacity to meet demand. The government did the right thing closing down the old-tech coal-fired power stations (air quality was terrible in the Latrobe Valley), but despite the imported wind turbines proliferating like weeds all over the state’s farmland, we still seem to be still short of power on hot summer days.
Add more people buying electric cars, and something has to give. While I like the idea of electric cars, they’re not really feasible here just yet.
Since about 2000 electrical energy consumption in the US has been flat due to use of more efficient appliances, A/C and light bulbs (https://www.eia.gov/energyexplained/electricity/use-of-electricity.php). This made the electrical grid unattractive to new investment and the results has been stagnation as well as outright neglect leading to supply side shortages and such.
However, today all of that has now changed. A big chunk of the $Bs historically flowing into oil is now being directed to the electrical grid due to EVs. Wall street sees opportunity and investment is pouring into the grid now. Capitalism at work. Supply and demand. There is enormous money to be made selling electricity to power EVs and investors are hungry to get in. California also has 5GW of online battery storage on the grid to shift solar (about 30% of the grid generation is solar in California) from peak generation (noon) to peak use (6pm). That’s more than twice the battery power of the state’s biggest nuclear plant. Every major solar farm being built now has attached battery storage so that power can be sold at the more profitable 3pm-9pm time.
Good to hear.
Thanks Paul for another thoughtful essay on EV’s and Tesla. A few random thoughts in response to you and some of the commenters:
– Socially, environmentally and politically responsible resource extraction is important for all industries. I’m not sure EV batteries should be singled out from carbon fuels, wood for houses and many other industrial materials. Not to mention agriculture, both crops and animals.
– I recently read a fascinating oral history by a California man who worked for Ford from the Model T era through WWII, then opened a Ford dealership. He said Henry the 1st was a friendly, personable guy but was pretty blunt about Ford’s union-busting and implied that Ford’s anti-labor actions really hurt sales in the liberal Bay Area, even 90 years ago. Couple that with Ford’s well-known anti-Semitism and unfortunately Musk isn’t unique. Both antagonize(d) some buyers and that will unfortunately always be true of many visionary business leaders.
– While it may be true that Tesla was forced by market pressures to reduce prices, their financials strongly support that they can do so and increase sales with potential for higher revenues while still profiting on each car. Not sure that Ford, VW or others can do the same.
– Not specific to EV’s, but my son is in Germany on business. His team (he works for our government) rented two cars. One is an Audi A6 (hybrid) and the other is a Chinese Geely sub-brand I’d never heard of, also a hybrid, and a CUV. Neither has a diesel and neither has a manual transmission, despite this being Germany. The auto world is changing in many ways.
Diesel sales in Germany and Europe in general have fallen off a cliff. And the Chinese don’t build diesel cars, as far as I know; maybe some more serious SUVs?
Yes, Tesla has started a good old fashioned price war, because they are very well positioned to win it. The others are all going to get hurt to one degree or another; either bigger losses from reducing prices (Ford) or less demand, or both. VW just announced they will not be cutting their prices.
Foton build diesels, Cummins diesels, fitted to their pickups and light trucks. Great Wall pickups are diesels and LDV vans and pickups can be had as EV, diesel or petrol most we get are diesel or EV.
Lynk & Co 01, most likely.
Link Lynk & Co: https://en.wikipedia.org/wiki/Lynk_%26_Co
Yes, he told me it was a Lynk & Co. Sounds like an American chain of brewpubs or home decor stores. I’d never heard of it. In the course of reading about it, I also learned of the Zeekr brand of EV’s, a portmanteau of “geek” and “GenZ”. To be fair, in the less global sixties, Datsun and Toyota sounded pretty odd to American ears.
At least they didn’t call it Geezr.
What a dumb idea some Ford executive had to build a Mustang SUV. The car started out as an inexpensive sporty one and now after all these years they want to make it into an SUV?? Dumb!
As someone whose mind is stuck in 1976, I have trouble with those dumb Honda executives that used the Accord name on a sedan, instead of a proper 3 door hatch. And I won’t even get started on the Maverick pickup …
As a hatchback lover, I agree with you on the Accord…….missed my chance to buy a 1986 3 door when I instead bought an ’86 GTi…they only sold it another 3 years. Seems I’m stuck in the 80’s if not 70’s as well in terms of what I’d like to buy unfashionable as it might be.
My giggle about the naming of the mach e was recalling the time in the 70’s when I worked as transporter for Hertz and although mostly drove Fords, got time in a ’77 Mercury Cougar wagon…decades ago, if Cougars could be wagons, I guess Mustangs can be SUVs (and Mavericks pickups). Still, it would make more sense to me if the names for pickups and SUVs conflicted with the newer models forcing them to recycle a previously used name albeit from a car rather than a truck or SUV.
Tesla brand also gives ,me a chuckle, in ’93 I watched Star Trek dubbed in Slovak on a Tesla television set…but I guess that brand doesn’t make vehicles in Eastern Europe so little chance of brand confusion…still, the European brand was many years prior to the US one.
And a Civic the size of a Chevy Nova? Seriously?
Merchandising!
Mustang the T shirt! Mustang the coloring book! Mustang the breakfast cereal! Mustang the flamethrower! Mustang the crossover SUV!!! (the soccer mom’s love this one)
“Chinese EVs were almost certainly going to come to the US too.”
In a sense, they already have. Polestar may be an offshoot of Volvo, but their parent company is Chinese, and just based on a quick check of Wikipedia the Polestar 2 is assembled in China.
This is slightly disappointing to me just because the Polestar 2 is my current favorite EV, but I believe not being built in the US disqualifies it from the new tax credits. Not that I am in the market for a new car anytime soon. My next vehicle probably will be electric, but which one I choose will depend on what’s on the market several years from now.
I agree that Tesla is starting a price war, but I think ‘damage’ to the major manufacturers will be minimal in the long run. The victims will be the small start-ups.
I think folks who are complaining about the Mustang named being used for an “SUV” are misguided. It’s hardly an SUV in that it has hardly any off-road prowess, it’s just a tall car, and it’s not really any taller than the average “car” on the road anymore. It’s competing in the category of “sporty fun car” just like the Mustang.
As far as Ford not making sedans anymore, my brother the car dealer said “Ford isn’t discontinuing sedans – it’s just making them ride higher and calling them SUV’s. That’s what people want.” So the Focus becomes the Ecosport, the Fusion becomes the Focus, the Taurus becomes the Edge, and the Crown Vic is essentially the Explorer.
What the people what, yet the Ecosport doesn’t even come close to touching the sales figures of the Focus🤔 I haven’t looked it up but I’d wager the Edge isn’t putting up significantly better numbers than the Fusion did towards the end either, if at all based on the number of them I see a day.
Me thinks that magical “light truck” classification and its relaxed regulatory standards is motivating certain manufacturers to cull sedans as much or more so than this supposed mass exodus by consumers who supposedly suddenly collectively saw the light in tall vehicles.
I’m not sure there’s much of a relaxation of regulatory standards for light trucks compared to passenger cars, at least for those with gross vehicle weights under 8500 lbs. Certainly, the safety standards are now identical, except that light trucks can have privacy glass aft of the B-pillars.
Some manufacturers still sell plenty of mass-market sedans, presumably profitably, to people that just need/want a regular car. All of them have seen reductions in the number of them that are sold relative to what they once sold.
It has hardly been a sudden shift though, this move has been occurring since the early 1980s with the advent of the “personal-sized” XJ Cherokee, S10 Blazer, Ford Bronco II and Dodge Caravan, got more heated up once they figured out how to add more doors, and then once the Japanese added some quality and fuel economy to the mix and the Europeans added “luxury”, sales increased even more and here we are today…Buyers are happy with their purchases and manufacturers are happy to be making money. Most people who lament the passing of sedans these days are really lamenting the dearth of cheap used cars.
But the all-electric Model 3 Sedan seems to be quite popular although it too is surpassed by its technically equivalent sister vehicle in slightly higher and pricier guise, which has nothing to do with either a manufacturer playing games or anything CAFE related.
The shift that is sudden is when it went from a lineup of 3-4 sedans and 1-2 SUVs to 3-4 classes of SUVs and 1 or no classes of sedans. That’s a wild shift that only happened in the last 10 years. The couple sedans still left on the market seem like stragglers facing inevitable demise sooner than later. I get why people like SUVs, but that’s a radical shift, manufacturers taking away options takes away the ability for them to change their mind with the next trade in, buying a SUV isn’t always the awakening revelation they can’t logically go back from some people like to bloviate about.
Ford’s bigger (or just as big a) problem is that their dealers are still gouging their customers…That more than anything else will hurt the Mach-E and other electric vehicles in comparison long-term to a vendor who has a “here’s your price, take it or leave it” model. Well, that and the joke of a charging system infrastructure we here have in the US for all non-Teslas. Adding a charger or two that isn’t a DC fast charger at every Ford dealership isn’t going to make a difference.
Tesla’s price reduction was perfect and an excellent competitive pressure point that puts everyone else on their back foot. It can’t make a Ford stockholder happy that the Ford guy you quoted is admitting they were losing money to date and are now going to be losing more.
We are now 2 years and 4 months into our own Tesla experiment with our Y. Elon Musk is as big a douchebag as he ever was but whatever, maybe he’s now appealing to the other half of the country, he might be even smarter than we think and he IS supposedly working on a pickup truck as I hear 🙂 . I don’t know Jim Farley or Mary Barra or the VW guy personally either, they might be total jerks too, or maybe not, Henry Ford certainly was a bigot (at best) and I’ve owned a new Ford.
In any case at $50k and a little change the Model Y was decently priced for what we got when we got it (and we were actively cross shopping Lexus RX at the time). I comfort myself that while Mr. Musk might be making a few bucks off every car he’s also keeping a lot of American workers employed, all of whom work there by choice and are free to leave at any time so who cares if he’s a slavedriver if the slaves can leave at their pleasure. But the price rise since we purchased to the upper $60s recently wasn’t going to be very palatable for a future trade-in to a new one. Now that the pricing is close to what it was again (or even better?), we are perhaps back for more in a few years.
We’ve (well, mainly my wife) has put almost 27k miles on it since we got it. She loves it. She loves not getting or spending money on gas. The car’s been almost flawless. Dead reliable, never stranded us, never failed to start, way faster than we need, large enough, apparently extremely safe, the over-reported “recalls” are way overblown and BS – anywhere else you drive to the dealer and they waste a day or so of your time. At Tesla it’s done over the air while you sleep. If it’s a real “physical” recall they usually come to your driveway, we have had one of those to date. Worst case you go to their service center and they either give you another Tesla to drive or pay for your Uber or Lyft or whatever both ways home and back (that was when the windshield cracked due to a large rock impact and they replaced it the day after we called). The car’s functionality and efficiency improves with every over the air update. It’s not even describable to anyone who hasn’t experienced it themselves so I shan’t try.
Tesla “quality” posts get huge click counts from “journalists”, notice that Tesla doesn’t advertise and doesn’t give press loaners. They are a target that won’t (so far) fight back or cost a critic anything. Are there some bad cars out there? Sure. Just like Ford and VW and GM and everyone else. Is mine fine? Yep. So are my neighbors’ as far as I can tell, several of whom are on their second Tesla, i.e. they might lie about the quality but if they were lying why would they buy another when there are so many other good choices available?
We charge at home overnight 95% of the time. It’s been flawless. And cheap.
The Ford Mustang Mach-E is not a bad car. The Mustang name is brilliant and in 2023 will likely outsell the regular Mustang. The Mustang Mach-E probably is what is keeping the name afloat anyway, Ford is a truck company not a car company anymore. They sell close to 20 or so F-series trucks for every Mustang. I drove the Mach-E and quite liked it. as I reported on this site. It’s a bummer that Ford has “so much history building cars” that they can’t figure out how to do it efficiently. Their quality certainly isn’t better than anyone else judging by their own recalls. Any deal they made with their unions is just that, a deal “they made”. Their problem, but the Mach-E isn’t even built in the United States – although for automobile purposes people seem to be all too happy to consider Mexico and Mexicans part of the United States via NAFTA or whatever it’s called now, convenient how that works sometimes, no?
The people bleating about panel gaps and quality would be well advised to look at the new car reviews I posted right here at this site for the Mach-E, the Cadillac ATS, and the GMC 2500. Each of them had glaring issues in that regard that we reported on, and those were cars that were hand-picked and gone over with a fine tooth comb for press fleet purposes. It makes you wonder what goes out to regular buyers. The Tesla in comparison is perfectly fine, but then again many or most $60,000 or so cars don’t have the fit and finish of a Corolla anyway, so not sure what people are really expecting, the average buyer never knew or gave a shit what a “panel gap” was until someone decided to score a few clicks at Tesla’s expense.
Paul, this was a fabulous post of yours, and as usual you brought out many of the usual suspects who know little about what they are commenting about or in a few cases didn’t seem to even read your post.
Appreciate the update, Jim. Not that I’m in any position to buy one, but good to hear how the new technology is holding up in the real world.
Even starting to see a Tesla or two in my little town this past year.
I’ve often said (and tend to say it ad-nauseum on EV boards) that the legacy auto industry’s biggest enemy to EV sales is their own dealerships. Disinterest, lack of training, disinterest on the part of the sales staff to be trained, and the usual “sell the hell out of whatever is the easiest to move”, plus the attitude of “nothing matters but the end of the month” all work against successful implementation of EV sales.
My personal example was incredibly indicative of this: Three years ago, when I first started shopping for an EV, primarily a Chevrolet Bolt, my first stop was the local Ashland, VA dealer, Luck Chevrolet (in business since 1914). Walked into the showroom, tell the salesman who snagged me five steps inside the door what I’m looking for . . . . . . . and within less than a minute he’s trying to sell me on a Chevrolet Trax since, “essentially they’re the same car”.
This is the same dealership that put a padlock on the mandatory-from-the-Volt-days Level 2 charger last year, to the point the PlugShare removed them from the list of EV charging points. Yes, the ownership has stated they have absolutely no interest in EV’s.
And every time I went looking at a Nissan Leaf, my time with the salesman turned into an impromptu training session on the car. I half-seriously started considering billing the dealerships for my time and training.
There’s a very good reason why Tesla wants nothing to do with the American auto dealership system. To put their cars into a showroom of another brand, especially some luxury or near-luxury marque, would guarantee that Tesla’s would be used as a draw to sell the other brand.
(This is what happened to Triumph of America back in the 90’s when they had just come back into the country. They prioritized doubling up with established dealers, Harley-Davidson being the most desirable, only to find that a lot of dealers picked up the brand primarily to ensure someone else couldn’t. The Richmond dealer, a Kawasaki-Triumph franchise, didn’t sell one Triumph in the four years they had the marque, using it to sell the less expensive Kawasaki’s.)
Car dealer’s idea of ‘the future’ is the end of the month. They’re not going to show particular interest in EV’s until we reach the point where EV’s are actually being cross-shopped with ICE vehicles. At which point, they’ll immediately start complaining that the manufacturer isn’t shipping them enough product, and of course they always completely supported EV’s.
The EV’s that I have been exposed to are fantastic, Teslas especially, and they will only get better. Not to say I have one, it’s not yet in the budget.
Charging infrastructure is spreading faster than one might think. Some things are definitely not ideal, but things do seem to move very fast, especially when the regulatory climate is getting ever more punitive for any non-electric solution, as it is in California (gas appliances/furnaces, anyone?). Personally, I doubt that gasoline stations will even be allowed in major California metropolitan areas in 10 years or so. It’s a reality that a large part of me doesn’t like, but intellectually I understand the need, and having worked on and loved cars and especially engines my whole life, I recognize a few things:
1) The vintage cars were/are “simple to work on”, but that didn’t mean they weren’t often a pain in the arse and often not particularly reliable.
2) Modern cars are becoming nigh-impossible to work on.
3) An electric motor has, essentially, 1 moving part. Maybe 2 or 3 moving parts if it is liquid cooled. The simplicity is amazing compared with an IC engine, even a vintage one, and almost unimaginably simple compared to a modern IC engine with all the control systems required to get it to perform cleanly and efficiently. No transmission required in many cases.
Again, on a certain level, I hate it deeply. But, especially in California, it’s where things are headed, faster than one thinks, and there are some definite advantages as well. Now where are we going to get all that electric power? That’s another question…
To be true to the original Mustang, all 6 cylinder equipped cars must have only 4 lug wheels. V8 equipped cars must have only 5 lug wheels. Five lug, six cylinder cars are not real Mustangs. Four lug, eight cylinder cars are not real Mustangs. Four cylinder cars, regardless of lug count are not real Mustangs even if they are on Charlie’s Angels with Farrah Fawcett driving. Electric Mustangs didn’t exist in 1964 so historically they had no lugs, therefore their wheels must be welded on.
This article reminds me that I need to get back into my routine of binge reading Automotive News once a month at the library. Personally I don’t think the US will get low cost BEV’s until China starts selling here. China has a long ways to go with proving vehicle crash worthiness establishing a decent dealer support network and most importantly respecting workers basic human rights. When and if they do that and if it resembles anything close to what Chinese Hi Fi manufacturers have done over the last decade it will create a seachange for consumers. I could see them importing vehicles less the battery pack and marrying them up with a US made one. Even with a pricey battery pack once people see what China is capable is when sales will really take off. The US has done a remarkable job holding off Chinese automobile manufacturers but that will not last forever. I believe the ever increasing demand for low cost BEV’s will finally break through that barrier and the sooner the better.
I am just glad I live out of the rust area. I will be driving Town Cars for a very very long time unless our Electric Betters manage to ban gasoline somehow, and I doubt that will happen as the Mad Max era “we will be out globally by 2000” gambit was disproved by reality. However things have been so unbelievable for the last decade society wide that all you can do is live day to day and see what happens.
Excellent insight. I too hope that all the bandwagon hype on the demise of the earth due to human “climate change” and the electric revolution will die down soon. Our rulers are a bunch of useless, greedy, out of touch creatures.
FWIW the plot of the Mad Max movies had very little, if anything at all, to do with peak oil. Only the second movie brought crude into the equation and people associate the franchise with the iconic tanker chase, but forget the oil was desirable because it was a commodity for crazy homicidal road marauders in the wasteland, of which if you watched the first film is simply a prohibited area outside the dysfunctional but semi-functioning society with normal towns and people. Even in the opening exposition scene of The Road Warrior it eludes to the breakdown being a result of a full scale West vs. Soviet conflict, presumably with nuclear arms, leading to a total breakdown of society, possibly from radiation poisoning, which only then turned off the taps of oil production. The fact that the plot of Mad Max 2 centers on a stronghold of a crudely constructed well and refinery in the desert shows that there’s still oil in the ground, it was just almost impossible for the protagonists(and by extension all of civilized society) to do anything productively with it because there were psychopaths circling the gates trying to control it for themselves to fuel their raids.
The only common theme of those movies is humanity had devolved to complete dog eat dog brutality, which given the craziness of recent times is probably more apt than anything related to human consumption as a threat to modern civilization.
I too will stick with the last of the V8s btw, I’ll never ever buy a crossover shaped vehicle and it seems like that will be hand in hand with an electric future.
Just wondering if JM lives in Cali?
“Just wondering if JM lives in Cali?”
You are right. I seem to be suffering some adverse affects!
Not sure if that’s a yes or no.
As long as governments are mandating EVs the legacy manufacturers will be forced to make them, which means Tesla’s price cuts were stupid because they can’t force competitors out of the EV market. And does anyone think that governments won’t bail out major legacy carmakers and/or go after “evil” Elon’s Tesla with anti-trust action if such aggressive price cutting leads to financial troubles for Ford, GM, VW, Toyota, Honda, MB, etc.? Throw in all the pissed off recent Tesla customers who bought just before the price cut, rising commodity/battery prices, and it makes even less sense. Its also hard to see how cutting profits will boost the depressed Tesla stock price, so all in all a boneheaded move.