Ten Ford Lightnings: $150k off on the bunch, and still not selling
Given that many of us here tend to live in the past, discussing in great detail automotive minutia of 1956 or 1976, it might be a good idea to come up for air once in a while and consider just what is currently happening in the automotive industry. The industry is going through one of the most tumultuous periods ever, as it reckons with massive changes.
Change is a bitch, and large segments of the car industry is struggling with the two most massive agents of change, Tesla and the Chinese. The extent of this was brought home the other morning when I read a NYT story about Emma Tucker, the new editor in chief of the Wall Street Journal. In her first meeting with her editorial staff, she said: “The media industry had morphed “beyond recognition” and The Journal needed to adapt, or be left behind. “We don’t want to be the German car industry of news publishing,” (Note: Tucker is from the UK)
Thirty years ago or so, it would have been “the American car industry”, which was then being battered by the Germans and Japanese. When the travails of the established car manufacturers once again become warnings for other industries, you know it’s serious.
#1: Tesla Model Y Becomes The Best Selling Car In The World
Let’s start closer to home with Tesla, especially since the US market is largely insulated from the Chinese due to our 27.5% import duty.
The fact that the Tesla Model Y is widely acclaimed to be the best selling car in the world in 2023 is probably not news for most of you, unless you really do live under a rock. Technically he claim is somewhat debatable, as the car it dethroned, the Toyota Corolla, is a large family of cars, with numerous models, variations, body styles and regional differences, so just how the Corolla numbers are counted makes a difference. Or does it? The Tesla Model Y is one model in one body style, so even if there’s some debate, the point has been made.
More importantly, the Model Y was up 85.3% in the earlier part of the year while the Corolla was down some 6%. That alone tells the real story of their respective trajectories.
The Model Y is also the single best selling car in Europe as well as in China. In the EV-laggard US, it’s only #4, behind the Big 3 pickups and the Toyota Rav4. But the Model Y was only slightly behind the Rav4, and the momentum is clearly in the Y’s favor.
Elon Musk is absolutely determined to keep Tesla’s growth in Ludicrous mode, and he’s dropped prices repeatedly all year, which are now down over 40% from the beginning of 2023. The Model 3 now starts at $38,990, which when combined with the federal $7,500 tax credit brings it down to close to $30k, and many states offer their own credits. In other words, in Corolla territory. And the Model Y starts at $43,990, before tax credits. Teslas are now genuinely affordable mass-market cars, selling well below the national median car price of about $50k.
And there’s a low cost Tesla in the works, often referred to as “the $25,000 car”. Who knows what it will sell for? Furthermore, the Cybertruck is due to be officially released any day now; production is projected to be in the 250+k per year range, when fully ramped up.
Speaking of Musk, I recently finished Walter Isaacson’s new biography of him, and it’s an excellent read (or listen). There’s lots of insights as to how Musk works, which has resulted in huge successes along with some collateral damage. I recommend it.
#2: Tesla Tops Toyota As The Best Selling Brand in California
There’s an old saying: As goes California so goes the nation. That was certainly the case with imports in general and Japanese brands as well as a huge amount of non-automotive trends. Now will it be the case with Tesla? It has dislodged Toyota as the #1 brand in the Golden State. Tesla was up 62.3% in Q2, and Toyota was down 8.3%.
For Toyota, which has been in deep denial about EVs, perhaps losing its long-established top spot in California was the final straw. They’ve finally accepted that Tesla represents an existential threat and they need to get real about EVs.
#3: Toyota Gets Tesla Religion
This could a long post by itself. I’ve been reading the travails of Toyota’s mixed-messages EV strategy for years, often with un-repressed snickers and guffaws. Former CEO Akio Toyoda (above) kept vacillating between telling the world that battery EV’s were not the solution — but hybrids and hydrogen were — and yet repeatedly telling us that Toyota was going to unleash a barrage of new Tesla-killer EVs by 2021, 2022, 2023, 2024… To date, the only Toyota EV available is the ill-fated bz4x, whose wheels kept falling off and whose sales have not found any real traction.
Finally in January of this year Toyoda conceded he was out of touch and stepped down, handing the reins to a younger and decidedly less hide-bound Koji Sato (center, above). Sato tacitly acknowledged that Toyota’s existing EV strategy was utterly doomed, resulting in cars like the bz4x that could never be profitable or built in the volumes that it would take to compete with Tesla. And that was before Tesla started dropping its prices drastically several times throughout 2023.
Sato recently unveiled a massive and radical new EV strategy, involving completely new platforms and utilizing giant gigapress castings for major underbody sections as pioneered by Tesla. And they’re going to be built with radical new assembly processes to lower production costs. It’s all straight out of the Tesla playbook. What sweet irony, coming from a company that has been so universally held up to be the master of lean production, a system that so many advised Tesla to imitate. Nothing stays the same…meanwhile, Tesla is readying its low-cost car (∼$25,000), to be built in an even more radically new process where major portions of the car are completely built in modules, and then assembled, all without any assembly line. If it works as planned, it will once again revolutionize the field.
#4: The Little Big Three
Did you know that the combined market share of the Big Three (GM, Ford & Stellantis) is under 40%? (39.7%, Jan.- Sept. 2023). GM: 16.7%; Ford: 12.8%; Stellantis 10.2%.
#5: Stellantis’ Profits (and Inventory) Are Vastly Higher Than GM’s or Ford’s
First half 2023 Net Profits:
Stellantis: $12.1 B
GM: 5.0 B
Ford: 3.7 B
The great majority of Stellantis’ profits came from its North America ops, where its operating margin was a rather astounding 17.5%, more than double of GM’s. And that’s despite Jeep sales sliding steadily all year. Carlos Tavares is an exceptional CEO when it comes to wringing out costs and maximizing efficiency and profits.
Where are all those that predicted failure when Fiat bought Chrysler, and then when FCA merged with PSA to create Stellantis? Oh, right; standing in the same corner of shame as those that endlessly predicted Tesla’s imminent demise.
Note: this is from caredge.com. The numbers are somewhat higher than what I saw at another site. But Stellantis does have the highest inventory of the domestics.
The big question is how long will the fat profits continue. Stellantis dominates this chart of the ten cars with the highest inventory currently. These numbers are jaw-dropping; 60 days is the industry norm. 90-100 days is a serious problem. Almost half of these represent a full year’s worth of sales. It’s a good time to negotiate on a Jeep or Ram, never mind Lincoln.
#6: Ford’s EV Travails; Pivot To Hybrids
No one seemed more eager to rush into the EV market to take on Tesla than Ford’s CEO Jim Farley; well, along along with VW’s ex-CEO Herbert Diess. Lots of talk about beating Tesla at their own game and lots of hoopla about their EV pickup, the F-150 Lightning. Unfortunately, things aren’t turning out very electrifying. Ford is losing some $4.5 billion per year on their EV division (Ford Model e) and the Lightning’s sales are stumbling; the Rivian’s RT1 pickup is now outselling the Lightning. Ford had to drop the price of the Lightning by $10,000 after inventory increased to 88 days of supply. It hasn’t helped; as of October 1, there’s 97 days of supply, even after the price cut. Well, for that matter, Ford overall has a ballooning supply problem, with 96 days of supply, well above the 60 days industry target. With prices up some 27% since 2019 and interest rates way up, that’s not exactly surprising. Update: Ford just announced a $7500 incentive on the Lightning for the higher trim versions.
Just as dire (or more), the Mustang Mach E currently has a whopping 217 days of supply. It’s a giant money loser, and had to be majorly re-engineered in an effort to try to reduce its high production costs. But with Tesla constantly dropping its prices, Ford is chasing a rapidly moving target to make the Mach E profitable. Which of course is precisely Tesla’s intent.
Farley’s gambit to push up Ford’s long-lagging stock worked for a while, peaking at $25 in January 2022. But it’s since dropped back into its historical doldrums range.
In a tacit admission that its EV strategy is stumbling or crumbling, Ford is pivoting to hybrids—because they can—and of course because hybrids are cheaper and actually make quite a lot of sense in pickups, where battery range when towing or hauling loads is heavily impacted. Farley announced recently that it would double production of its F-150 hybrid version in 2024, from 10% of the pickups line currently to 20%. And that the hybrid’s price in 2024 would be the same as the base Eco-Boost version. The F-150 hybrid has a 25 mpg EPA rating. BTW, 24% of Toyota’s Tundra sales in 2023 are hybrids.
Ford is also adding another shift at its Mexico plant that makes the red-hot Maverick compact pickup, in an admission that it grossly underestimated its success. The demand, especially for the hybrid version is still well in excess of the supply. Ford’s crystal ball is not working too well.
It’s a logical pivot, since Ford was smart enough to develop and maintain a strong hybrid system, although the RWD version in the trucks is not really a “strong hybrid” like in the FWD Maverick and in other Ford FWD applications. But it’s better than nothing, which is what GM and Stellantis have for their trucks.
Which raises a big question: GM is also struggling to ramp up its EV production; output of its promised new Ultium-based EV’s has been grossly behind projections. GM hasn’t broken out its losses there yet in detail, but undoubtedly they are massive; quite likely greater than Ford’s. Well, maybe not, since they’re actually not building many of them, at a huge loss per unit. If GM encounters sales resistance to their EVs, it doesn’t have a proper hybrid system to pivot too. Mary Barra insisted that GM was all-in on the transition to EVs, and was not going to spend time or money on hybrids as a transitional technology. That largely goes for Stellantis too. It’ll be interesting to see how that plays out. Maybe it’s time to resurrect GM’s long-dead dual-mode hybrid system from 2008? It was actually very advanced and effective, but also very expensive.
#7: US and European Brands In Serious Decline In China
The China gold rush ended some years back for the foreign brands. Once upon a time, the American and European automakers were all scurrying to China to participate in the growth of the world’s now-largest auto market. They were forced to participate only in joint ventures with local manufacturers, which of course allowed the Chinese partners to gain full insight into the technology and processes of their foreign partners. It was a heady time; VW became the #1 brand, and GM and others enjoyed success and profits. Those days are well over. All the foreign brands have been in decline for some years now; GM’s market share is down 30% since 2015; Ford’s has plummeted to barely 2% in 2022; VW’s has crashed from a dominant 15% still in 2020 to 10% in 2023.
Note: Tesla is #11
In fact, Chinese EV maker BYD just surpassed VW as the overall #1 brand in China. Mercedes is down 12% in the past year, and BMW is down too.
Stellantis has closed up shop and walked away. Others are trying desperately to stem the declines. But Chinese consumers are showing a clear preference for domestically developed cars, especially EVs, and there are many very attractive choices to chose from. The technology is world-class, and the design and technology is tailored to a new generation of Chinese car buyers, who are quickly seeing the once-vaunted German and American brands as old-fashioned. Plus there’s an anti-foreign atmosphere in the air, not surprisingly. This has lead to some drastic role-reversals (see #6).
#8 Europeans Want In On Chinese EV Technology and Platforms
Xpeng G9
If you can’t beat them, invest in them.
The Germans, who are struggling with their EVs, are admitting a shocking degree of defeat by buying in on new Chinese EV platforms developed by 100% Chinese domestic companies (not joint venture partners). It’s a 100% reversal from the past, when Chinese companies joint-ventured with foreign companies to gain their technology.
VW is having massive struggles with their EV program, most of all with their CARID software unit, which has delayed planned new top-tier EV’s from Audi, Porsche and Bentley until as late as 2030; these cars were originally planned for 2023, then delayed until 2025. This is the main reason CEO Herbert Diess was shown the door last year. New VW CEO Oliver Blume recently said “Our roof is on fire!”
So in desperation they’re now buying into new EV platforms from China. VW just announced an major investment in Xpeng, giving them access to their new G9 SUV platform. The VW version is intended for China, at least for the time being, but who knows? If the Chinese can develop and build new EVs much quicker and cheaper than VW…
Mercedes is also buying into a new platform/brand (Denza) with BYD, resulting in two new cars. Look for more of this trend.
#9: China On Track To Be World’s #1 Auto Exporter in 2023; Europeans Running Scared, Russians Loving It
The only thing holding back an even greater flood of Chinese automobile exports is the lack of ships to haul them. But more ships are being built as fast as possible, so the trend line seen in this chart is set to continue, strongly. What’s driving it? several things.
The Chinese domestic market has peaked and is now shrinking. There are over 100(!) auto manufacturers in China. There is massive excess production capacity. So the only solutions are consolidations, shut-downs, and exports. The latter is much more palatable in order to prevent job losses, especially given China’s weakening economy. And much of the world is quite eager to buy Chinese cars, as they are generally cheaper and yet have decent to excellent quality. One additional factor has been the Russian market, which all the Western auto makers ditched after Russia invaded Ukraine. Now Chinese cars have filled that substantial void.
In addition to Russia, South and Latin America, Australia, Southeast Asia and the developing world, exports to Europe are soaring too. With 10% tariffs on imported vehicles, Europe is hardly rolling out the red carpet. But that’s much lower than in the US, which jacked up its levies on Chinese cars to 27.5% during the Trump presidency. China exports mainly EVs to Western Europe, as that’s where the market is heading and its older IC cars would probably not be very competitive. Actually Chinese-owned MG is doing well with both types in the UK; the gas-engine HS SUV was the best selling car in the UK in the early months of 2023. And the EV MG4 is the #2 selling EV there after the Tesla Model Y. Don’t discount the lure of a venerable name.
A significant number of the new all-Chinese EV makers have or are setting up shop in Western Europe, like this elegant NIO store in Frankfurt. It’s a very worrisome trend, given the challenges the Europeans are having in getting affordable—or more importantly, profitable—EVs to market.
Increasing tariffs closer to US policy could help ward off Chinese EVs that Europe would rather see built where they’re sold. And yes, the Chinese are already planning or considering European EV plants.
Beijing has spent more than $26 billion in purchase subsidies for passenger EVs sold between 2016 and 2022, according to BNEF (Bloomberg) estimates. There were billions more spent for research and development and key components, public procurement and the build out of charging infrastructure. Local governments also showered manufacturers with grants, low-interest loans, tax breaks and cheaper land.
That’s not to say that the Chinese pure-EV brands are profitable; for instance NIO is still losing $35k per car, due to not having achieved sufficient scale. The same applies to the rest, except for BYD, which is profitable. But then BYD started out making batteries, and makes them for other car makers, and they have huge economies of scale.
BNEF’s estimate is that building a compact battery electric car in China costs roughly $15,000 today, excluding overhead, distribution, margins and any subsidies. That’s about 65% of the comparable cost for a similar-size EV in Europe. And in terms of batteries — the biggest cost factor in EVs — BNEF’s 2022 Lithium-Ion Battery Price Survey found that pack prices were 33% higher in Europe than in China, and 24% higher in the US.
As a result, the sales-weighted average price of a battery-electric vehicle in China in 2022 was $27,000, which is less than two-thirds the average EV transaction price in Europe and less than half those in the US (although that’s not quite the case with Tesla’s recently lowered prices.
So yes, higher tariffs might slow down Chinese EV exports, but ultimately, only further investments in innovation and scaling up will really help companies fend off competitors and fortify their position in the auto market. This is what the massive investments in battery production plants in the US spurred by the IRA is doing, or presumably will do.
Honorable Mention #1: GM Returns To Europe With Cadillac EV
How many times has Cadillac tried to sell their cars in Europe? If at first you don’t succeed… GM once again will try to take on the European market with Cadillac’s Lyriq EV in Europe, priced at a lofty $90,000. Here’s one already in a store in Switzerland. In the face of wave of European EVs and excellent and significantly cheaper Chinese EVs, all I can say is Good luck with that.
Honorable Mention #2: BYD Takes On Japan:
Not only is Japan very adverse to imports generally except for German premium brands, but it’s also been exceptionally EV-phobic, due to questionable government policies and innate conservatism. But BYD, China’s largest EV maker, introduced its Dolphin electric car to Japan, betting that the compact hatch will help spearhead sales in a market that remains hesitant to embrace Chinese automakers and electric vehicles.
The Dolphin — widely considered the world’s best of the truly affordable EVs — starts at a very attractive from ¥3.63 million ($24,560). The base model has a 70 kilowatt hour battery with 400 kilometers (250 miles) of range. The extended-range model costs ¥4 million. Its 150 kWh battery offers 476 kilometers per charge.
Tesla has already established a beachhead in Japan, with over 50 Superchargers and growing and its sales are growing too, albeit still modest.
#10: The Arcimoto Death Watch
Why am I bothering with Arcimoto? For two reasons: the manufacturer of three-wheel EVs (“FUV”, Fun Utility Vehicle) is based in Eugene, my hometown. I predicted its eventual death right from the beginning, but the insane run up in all EV stocks forestalled that by a few years. Look at this stock chart: Arcimoto peaked at $637.40 on February 5, 2021. That’s a market cap of $1.27 Billion! For a company that at the time had a tiny storefront for its offices and managed to hand-build all of 88(!) of its FUVs in that first quarter of 2021. I can think of no better example of the EV stock mania of 2021. To date, all of 600 Arcimotos have been built since the company formed in 2012. Given Arcimotos $180 million total losses to date, that means that they’ve lost $300,000 on each of those 600 built so far.
Sure, that makes it a billion dollar company! The bigger the losses, the higher the stock price?
Yes, there’s a few Arcimotos on the streets here in Eugene (in the warm summer months), as a lot of locals invested and wanted to support local-boy Mark Frohnmayer, its founder and CEO. I should say “ex-CEO” as he resigned last winter after he got a DIU and production had come to a standstill. I can understand why he was drinking last winter: his stock had been worth several hundred million two years earlier; now the stock is down to 75 cents, and still dropping. Poof!
Arcimoto is only still going sort-of because some idiots were willing to buy more new stock earlier this year, it mortgaged its new factory (bought with the proceeds of stock sales) at 20% interest, and most recently they sold the factory and is leasing back a small part of it, as it’s way too big. Inventory is piling up, and incentives are up to $10k in an effort to sell the $21-24k three-wheelers.
Total accumulated operating deficits (losses) are some $180 million, and growing by the day. It’s just a matter of months, weeks or days…
Ironically, Arcimoto is not the first EV three-wheeler to be built in Eugene. The Nevco Gizmo was first built here back in the late 1990’s, and then struggled along for a couple of years. But it eventually ran out of juice.
In my 2012 CC on the Nevco Gizmo, I wrote the following about Arcimoto, which had just recently announced its plans:
Which leads me to the efforts of another Eugene outfit trying to do almost the same thing: Arcimoto. It also has lead-acids, although li-ions will be optional. And top speed is supposedly a freeway-compatible 65mph. Price: TBD. But given its greater complexity and speed, it’s bound to butt right up into Mitsubishi iMiev and Nissan Leaf territory. Prospects for success: about the same as the Nevco Gizmo.
That’s proof that I wasn’t just making up my prediction after the fact. My only regret is that I didn’t short Arcimoto stock in 2021.
So there you have it; if you’ve stuck with this to the end, you now know more about the state of the auto industry than most. As to the actual cars they build that are available here, they’re mostly of little or no interest to me. I want to see some really cute and cheap little EVs on the market, like the Chinese are gobbling up. How about an exception in our high import tariffs on Chinese cars for EV’s costing less than $10k? There’s a genuine need to get folks out of tired old gas guzzling beaters into clean, cheap EVs.
If the Chinese can build EVs like this for $4k over there, they can surely sell them here for $10k.
Or better yet, how about Honda offering this cute little EV van here, to be sold for a mere $7,300 in Japan. Now that would be right up my alley for running errands, hauling appliances and tools for my rentals, and to my favorite local trail heads, with a range of some 124 miles. I’d pay a premium for that over here.
I don’t know about you, but I’m really frustrated with the lack of diversity of what’s available on the market here. The manufacturers are all chasing maximum profits because enough Americans are willing to take on 7 and 8 year loans to finance their SUVs and trucks. They’re afraid they’d be laughed at driving something like this while laughing all the way to the bank. It’s not going to happen, sadly. But the high-price, high-profit salad days of the pandemic look to be crashing back to earth, with expensive new domestic cars and trucks piling up like cordwood at the dealers. It’s not sustainable.
OK; enough of the current reality; time to get back to discussing the correct color of the upholstery piping on a 1956 Chrysler.
Update: I didn’t even touch on the current UAW strike. Let’s just say that it will inevitably result in an even larger gap in hourly labor costs between the Big Three and the non-unionized foreign transplants and Tesla.
Not sure how well Chinese EVs will do in Japan, given the low quality and atrocious reliability of the Kandi K23/K27 and Coda (Hafei Saibao) EVs that have been attempted to be sold in the US.
Tesla is quickly becoming the bane of right to repair advocates, and people who care about body panels that line up correctly. If Toyota adopts Tesla manufacturing techniques, they will be squandering their hard earned reputation for quality.
That was eons ago, in terms of the evolution of Chinese EVs. Those were made by minor players, and were never designed to be EVs from the start; pathetic conversion jobs. Apples and oranges.
For me, getting people out of gas guzzlers into mini EV’s sounds like it might require legislation (coercion), not just low prices. For many people, EV runabouts aren’t on the table; gas guzzling beaters keep some Americans on wheels whose purchase of any new car is a non starter. An old car’s carbon footprint is arguably less than any newly manufactured vehicle’s, their electrical systems are cheaper to fix without CAN bus tech, and the beater can range far and wide, not just to the store and back. EV pollution is just offloaded from our driveways to the power sources, which will be necessarily dominated by non-renewables until we start building safer, better located nuclear plants. I would love an Ora Cat in my driveway but, in my situation, a 1999 Mercury Tracer wagon would make more sense.
Well, if a $10k EV qualified for the $7500 fed tax break, I rather think that there might be some interest in a $2,500 car. And in some states it might well be free, or even a rebate! Buy a new EV for free, get a check! 🙂
Of course an old car’s carbon footprint is already accounted for. But a ’99 Tracer is not always going to work for everyone.
It is interesting to note that both the Cadillac Lyriq and the unnamed Chinese $4k EV are both GM products.
https://www.motortrend.com/news/gm-saic-wuling-ev-electric-china-details-photos/
Sort of. GM is in a JV with Wuling, but the development and design of these small Wulings were done by Wuling. GM is along for the ride. I would not call it “a GM product”.
I would love a small, cheap EV for around town use. I was in Greece earlier this year and there were a number of such cars, some were Chinese I think, and there were many Citroen Ami cars along the curb as well.
What I would also really like is to be able to buy cars direct from the manufacturer, a la Tesla.
Despite the glut of Jeep Gladiator inventory, I had no luck trying to negotiate with three dealers recently. I have toyed with the idea of one since they first came out. I read that it might be a good time to dicker on one. Best I could do on a 2023 $61,000 Overland trim was about $48,000 which sounds good, but then all three dealers added doc fees, “processing fee”, paint protection, LoJack, “lost key protection”, “alarm system”, about $4,000 of garbage. One dealer charged $995.00 for “spray in bedliner”, despite the vehicle having a factory spray in bedliner on the Monroney (they took that off when I pointed that out). I was so annoyed I just gave up.
Interesting, here is a cut and paste from a dealer in my area:
NEW 2023 JEEP GLADIATOR HIGH ALTITUDE in Papillion, NE
Dealer List Price $64,620
Available Savings:Rebates – $6,262
Down Payment Match – $2,000
Trade N’ Saveg $2,000
H+H Best Price $54,358
Total Savings$10,262
I found this all to be very interesting, in part because I generally don’t pay a whole lot of attention to the current auto market.
The Chinese vehicle topic is timely for me. This week, my sister is on vacation in France, and she texted me that her rental car is a brand she’d never heard of. Turns out it’s a Lynk & Co. SUV. I immediately began wondering how much of an impact Chinese brands are having in Europe… so now I know. And incidentally, she says that it’s “nice to drive.”
Say ‘Lynk &” aloud quickly, with emphasis on the first syllable … that can’t be a coincidence.
Yes, I mentioned that to my sister and she was pretty amused.
I just returned a Lynk & Co rental I had in Rome. It was far from “nice to drive” in my book. I’ve been interested in them after stopping by their lounge of a showroom on Via Del Corso (the dodgey end by Piazza Venezia, not the trendy end near Piazza Di Spagna). It had a terribly cheap feeling interior (possibly ordered as such for a rental fleet), but the driving experience was truly awful. The seriously strong and apparently mandatory “lane assist” seemed hell bent on suddenly veering me into every motorino/cyclist I passed, the radio turned off every time and would only come back on after driving 100m or so, and the anti crash warnings were either too slow (beginning to beep after I was already stopped) or waaaaay too sensitive, locking the wheels when a larger vehicle like a bus applied the brakes in front of me.
It should be noted that GM canceled, then uncanceled,the Chevy Bolt at a point where it was the best-selling non-Tesla EV. It hits a sweet spot in the market where sufficient buyers in the market for a $20k (after incentives) subcompact exist who either know they don’t or rarely plan to road trip beyond a 250-mile radius or have another vehicle to do it in and are shopping for a runabout/commuter car.
The incumbent automakers’ headlong Rush to Big was a mistake. Making a $50k midsize crossover the minimum buy-in for a full electric forces the issue of on-the-road fast charging. Ford should’ve prioritized a Bolt-beater over the F150 Lightning and given the E-Transit a higher marketing profile for the fleet users who want to be seen as embracing the future as well as those for whom electrification already pencils out on a TCO basis (and there are a great many of those, delivery vans and shuttle buses that follow fixed routes in stop-and-go traffic before returning to a central yard).
Well, I guess I really do live under a rock. But I had heard of the Cadillac Lyriq, Malcolm Gladwell did a gushing podcast on how much he loved it.
Paul: Thanks for covering the Maverick. I like it and have one (ICE, not hybrid) on order. I’ve been puzzled about Ford’s seeming reluctance to produce enough of them. Is it the low profit margin, the fact that it is built in Mexico, their doubts about the vehicle in the market? I don’t know.
And it also seems curious that GM, Stellantis and Toyota don’t seem to be interested in producing a competitor to the Maverick. Is the market for the vehicle so very small that the competition is willing to cede it to Ford?
Will you provide some more comments about the Maverick and the potential market for it, please?
It’s not nearly as easy to increase production of a vehicle as it may seem. Plant allocation is the most critical factor; then suppliers and other factors. The Maverick is built in a Mexican plant and shares much of its architecture and the assembly lines with the Escape.
Ford did just start up a third shift there for the Maverick, which will increase volume, but not drastically. Any further increases would have to come at the expense of the Escape, or a major commitment to new or other plants. Not likely. Ford is quite happy to see prices for it stay strong.
They simply underestimated the demand for what was an untried product. And they wanted to be sure the demand was not just a bubble at the beginning, like it often is for a new car, like the neo-T-Bird or such.
I don’t think the others will all rush in until everyone is really certain that this is truly a major and growing market segment. Toyota is making sounds about doing so.
Paul ecellent post; gave me more info in 15 minutes than I’ve seen elsewhere in the past year.
One question and if it’s in the post and I missed it; apologies – I thought the Ford Lightning was red-hot; the first year’s production sold out already. What happened? was it the realization of the towing/range issue?
Ford has been doing everything it can to increase Maverick production as they doubly or triple missed on their projected demand. Not only did they miss on the total demand they missed on the Hybrid’s take rate and also missed on the projections for its line mate the Bronco Sport. They have so far taken the following actions.
#1 Canceled the Transit Connect. The initial plans for the plant were for it to produce the Bronco Sport, Maverick and the Transit Connect. With missing the mark on demand for both the Bronco Sport and the Maverick the Transit Connect was squeezed out. (It didn’t help that in Europe they switched the Transit Connect to the VW platform).
#2 Offered the EcoBoost as a no cost option to the masses who had placed orders for more Hybrids than Ford had components for.
#3 Made the EcoBoost the base power train and the Hybrid became an extra cost option.
#4 They are adding a 3rd shift to the plant.
As Paul mentioned it isn’t so easy to ramp up production. Many parts come for outside suppliers based on contracts that are finalized before production starts. Sure they can go back to those companies and say we want X more but unless all the suppliers and parts produced in house can also be ramped up it doesn’t do them any good.
Originally ordered my Maverick Lariat hybrid in Sept. 2022; in July I got rolled over to a priority 2024 build. Had to change my color preference though. I ordered the ’23 pretty loaded out, so the large price increase for the ’24 Lariat (Ford made a lot of formerly optional equipment standard for ’24) didn’t dissuade me since Ford is offering a $2500 private offer and it essentially will even out for me price-wise. Finally notified a couple of weeks ago that it will be built the week of November 20th; hopefully the UAW strike won’t be a large speed bump.
Very much looking forward to driving a new car by the holiday. In 9/22 I was trying to avoid dumping a lot of money into my current 200k mile car…unfortunately that didn’t happen, so now ($8k+ later) I have a solid backup vehicle for our vacation home.
Bummer on the bills on the current car. Hopefully strike expansions don’t delay your delivery.
If they come out with a PHEV I’ll almost certainly order one, and I’d consider an AWD Hybrid.
The only reason for any success in the ev market is government meddling and manipulation. For the vast majority an ev is impractical, myself included. And many are in just plain denial about the downsides.
At best it’s a pipe dream for control freaks
Get off my lawn!
And all those dastardly safety devices! What’s up with that???
OK, I’m a troglodyte, but I will stick with my ICE 2020 Accord EX, 1.5L turbo: the car consistently runs hi 30s to low 40s. It is comfortable, has great range and looks good. Also, it burns clean without simply transferring the source of “pollution” to a huge power plant many miles away.
Plus that doesn’t even account for the “rare earth” mineral mining that scars and pollutes the earth for EV battery manufacture. Said CO$TLY batteries that will need replacing how often? DFO
Yes, drilling for and extracting oil is clean while burning it causes no pollution. Gimme a break. The warranty on my EV’s battery lasts far, far longer than the warranty on your 1.5T engine that if I’m not mistaken has the fuel into oil dilution issues. At least you aren’t one of the anti-turbo doomsayer brigade quoting 40-year old horror stories in that regard. Enjoy your weekly trips across our great country!
In case you missed it: The 100-page lawsuit says the 1.5-liter turbo direct injection engines in 2019-2023 Honda CR-Vs, 2019-2022 Honda Civics and 2018-2022 Honda Accords all suffer from “an identical and inherent” engine oil dilution defect that can lead to unlubricated engine components, reduced efficiency, excess wear, increased upkeep …
Another big story is how the nearly the whole industry in the last few months has decided to support Tesla’s NACS chargers and cables rather than CCS or occasionally ChaDEmo (ChADeMO? CHADemO? Whatever…. It’s about time the industry (including several non-Tesla charger networks) have coalesced around a single standard, rather than having to look for recharging stations with the right kind of connector for your car, or use clumsy adapters. It makes Tesla look good that their charging infrastructure, which has proven the most robust, has gotten the industry’s blessing. Meanwhile, selling electricity could prove more profitable than building cars in the end.
Yes, that’s big too.
A crew has just finished installing an electric car charger outside my local library. I think there might be one Tesla in town. Wonder what sort of connection this charger has?
I still see EV sales as a political stunt by dead-broke governments bluffing in a global poker game with money they doesn’t have.
Many Western countries are headed by administrations that are artificially lowering the real price of EVs. In the US, many states are adding cash on the EV hood too. The governments are all dead-broke. This cannot continue. The only reason we, in the US, are not completely swamped by inflation is because other Western countries also devalued their economies with floods of valueless cash. It is like a game of chicken to see which economic partner breaks first. This will end in a global depression.
Tesla sees this happening and they have been developing an affordable EV that would still be affordable after the budget poop hits the fan. If the number one vehicle being sold is an EV, then the political justification for shoveling out money for each vehicle is effected. Even if the next administration halves that $7,500 – that would have an impact on EV sales.
We have repeatedly seen bubble economies driven by government spending, and we are seeing one here as well. They more these governments spend, the quicker and harder will be the fall.
Detroit is basically doing nothing. Their stockholders are wanting in on this government driven bubble, but there are also many stockholders who recognize that this EV boom is artificially driven. What happens to it after the bubble pops, will need to be seen.
Thanks – that’s my opinion. Like EVs or not, their market price currently is not reflecting economic reality. That will change. I think Tesla will make it, but a lot of other new cool toys will go the way of those little three-wheeled Eugene Oregon manufacturers.
There’s essentially no such thing as a “dead-broke government” if it can keep creating its own currency. Japan’s debt to GDP ratio is 224%, and has been over 200% for quite some years. Yet they’re doing just fine, in terms of their GDP per capita (with a declining population). For the US, it’s 98%, which is considered very sustainable.
Yes, the trend is somewhat worrisome, especially now that the interest rates are much higher. But the solution is pretty easy: increase taxes, by rolling back the unnecessary corporate tax break Trump gave to corporations, and increasing tax (and collections) on the very wealthy (over $400k income). Those two would pretty much solve the issue for the time being.
There’s this thing called global warming. Government’s job (among other things) is to reduce very real threats and impacts like that. That’s what they’re doing. But I realize not everyone agrees, both in principle and in the details of how it’s being done.
“by rolling back the unnecessary corporate tax break Trump gave to corporations, and increasing tax (and collections) on the very wealthy (over $400k income).”
This kind of reasoning always results in higher tax rates, then people scratching their heads why the actual revenue gains (if there are any at all) did not keep track with the projections. Changes in tax rates change the behavior of those subject to the taxes – like multinationals shifting business to other countries or the ultra rich finding ways to restructure their lives to reduce their taxable incomes. The problem is on the spending side.
Not going to say anything further after this, but we need honest, bipartisan agreement on how to better balance the federal budget through a combination of increased taxes AND reduced spending. I hold out zero hope though of seeing this happen in my lifetime (I’m over 70 now).
We don’t need to balance the budget every year but rather to get the deficit down to more reasonable levels.
One example of spending that makes me cringe: the farm bill. How much pork do you think is included therein, pun intended?
Dead-broke governments can keep printing money, but the economic consequences of that thinking causes dead-broke citizenry, the economy depends upon.
When I sold cars, hesitant customers were considered buyers, while “open-minded” customers were considered suckers. Anyone hesitating to purchase new technology is actually measuring the technology up to their needs, which is “buying” the product. It is incorrect to assume that those not buying new technology are closed-minded. Bad salespeople believe that. You do not blame those who do not support your position – you are to blame yourself for failing to convince them.
Thanks, that’s my opinion and I am in the process of “buying” an EV as soon as it meets my needs. Right now – NOPE.
Word.
Back when Tesla originally sold enough EVs to no longer qualify for the $7500 federal EV tax credit (that was non-refundable, i.e. it was only there if a buyer had a tax obligation) back in 2019 or so, their sales did not go down. In fact they even raised their prices after 2020 multiple times until about 2022 when they started to reduce them again by realizing increased production efficiencies and passing some of those saving down to buyers, not something I’ve ever seen any other maker do.
If a manufacturer builds a quality product that open-minded people will take the time to experience for themselves and actually evaluate it on its merits along with a buyer’s actual needs (and desires), then it may sell well if that open-minded buyer determines that it would in fact meet their needs and desires. But yes, if some manufacturers just “get on the bandwagon” in order to take advantage of a particular program, when that program ends and the product has to stand on its own four wheels, then the charade is up. Change is hard for many.
Thanks for this write up. Many of these I was unaware of. Like others I have very little interest in the current automotive offerings so I find myself not well informed for the first time in my life. A big SUV packed with electric gadgets and a giant iPad glued to the dashboard? No thanks. I could be interested in a basic electric hatchback or similar which is just not avaliable here.
I do wonder with the increase in vehicle cost/complexity combined with the drop in real wages if we are seeing vehicle ownership start to drift away from lower/middle class folks. There is also less of an interest in ownership of anything from younger generations as the world moves to a “as a service” models over ownership. Which is a shame as, in theory at least, a basic electric vehicle should be easier to repair/keep going over a more complex internal combustion one.
“I do wonder with the increase in vehicle cost/complexity combined with the drop in real wages if we are seeing vehicle ownership start to drift away from lower/middle class folks.”
Probably, and with reason.
If that happens – and there’s a fairly good chance that it will – then we’ll see mobility revert to what it was like in the early 20th century and before: A luxury for the rich.
I sure hope that doesn’t happen.
I tend to think that is at least part of the goal. Limit prosperity and freedom for all but those at the top.
Not very likely. As the useful lifespan of cars increases, so does the demand for them, even older ones.
But e-bikes are becoming a relevant alternative for some.
Exactly on the longer useful lifetime of cars today. I sold our 2004 Toyota Camry sedan 2.5 years ago on eBay to a buyer in Georgia.
The car was originally bought new by us and then sold to our younger son for use in NYC in 2015.
It had 214K miles on it as of the date of sale to the GA buyer. It was a perfectly presentable car with only a few things wrong with it, one being a “check engine” light on because of reduced catalyst efficiency. This last is not an issue in southern GA where there are no emissions checks.
Sale price: $1700.
Thanks Paul for presenting some real data and facts balanced with good commentary. I think one of the biggest overall themes here is the cost of manufacture. Whether it’s high union labor costs in some places, lack of economies of scale as non-Tesla (and non-Chinese) EV volumes remain low, loss of margin where companies are outsourcing far more of the vehicle content than just tires or piston rings or seats, or just poor value engineering, I feel like only Tesla has really grasped that and in my mind it makes them a brilliant manufacturing company, both with a strategic approach to the value chain and vertical integration, all the way to the sales channel and the charging network, as well as the more mundane Design for Manufacturing details.
I do worry about the repairability of cars as the structural parts get more integrated into single large pieces, but the reality is that I wouldn’t want to be driving a $50k conventional car that had a $30K body repair involving several stamped steel structural parts welded together and painted by a body shop tech.
Aside from Tesla, I think one bright spot on the domestic scene could be Rivian. They’ve made a lot of mistakes, with an unnecessarily complex product with a lot of outsourced parts. But they seem to be learning and the new dual motor designs with in-house motors, adoption of the Tesla charging, etc seem to bode well for them. I don’t know about national sales, but I see ten or twenty Rivian’s for every Lightning. And half of those are the R1S SUV which should be attracting a slightly different buyer than Model X or Y. If they can hang on financially it could work out well, though I admit to bias as I find both of their vehicles very appealing. I want them to succeed 🤞🏻
“I do worry about the repairability of cars as the structural parts get more integrated into single large pieces, but the reality is that I wouldn’t want to be driving a $50k conventional car that had a $30K body repair involving several stamped steel structural parts welded together and painted by a body shop tech.”
You make an excellent point. When my then-only-8000 mile 2014 Subaru Outback was rear-ended by an F-150 doing 45mph and pushed my car into another car, I leaned on my body shop extremely hard to keep taking more of the car apart to find more damage, which they eventually did and it was declared a total loss when at first it had seemed borderline. I had zero desire to drive and transport my family in a less-than year-old car that had had massive reconstruction done to it. The cost of car insurance has a lot less to do with the cost of the cars that are being insured than the cost to fix the humans that are involved in the crash. The cost of the car itself is chump change comparatively.
I would tend to think that any car rear ended at 45mph by a pickup and pushed into another car would be totaled. Who was trying to “save” money? The insurance company?
You might be surprised, the Subaru had lots of damage but didn’t look that bad initially, the at-fault party’s insurer suggested it was rebuildable initlally. Insurance companies use a formula of repair cost to value to determine if it’s a total loss or not. In my case it was an almost new car and the six-cylinder version, i.e. the same car in more basic trim would have been an easier total as the value would have been lower. The body shop was positive that the car would in fact be repaired by someone somewhere and be put back on the road after being sold at auction.
https://www.curbsideclassic.com/cars-of-a-lifetime/coal-2014-subaru-outback-3-6r-limited-oh-we-hardly-knew-ye/
Scroll down to see the picture of the F150, it looks even worse. At least we walked away from it.
If current trends continue, we could soon see the “Top Ten” automotive stories appearing in the appliance section of Consumer Reports.
The Arcimoto story is insane.
Three wheelers are a motorized business stunt.
If they were to take off in a serious way, undoubtedly regulators will call them out for what they are – cars that lack the safety features of a 1950 Volkswagen.
Business closed.
I wonder if that was noted in their prospectus.
Regulation is not an issue at all; there’s a number of other three wheeler on the market. They simply are not regulated, like two wheeled bikes. Which is precisely why they have three wheels. It makes them exempt.
I’ve no idea where Musk’s deep dive for market share with price drops will take him. Tesla forums are loaded with disgruntled folks that bought just before the drops – talk about a depreciation hit.
The Lightning appears to be a great truck, until you load it and put a trailer behind it. Add a chilly day, and, well, you could be left out in the cold. Can the Cybertruck manage to do any better? Will consumer experience with the Lightning dampen enthusiasm for the Cybertruck?
Apparently, Stellantis CEO Carlos Tavares has put out his take that strong hybrids are the way to go with larger vehicles. They would likely make the vast majority of their miles on electric power, but when travel exceeds about 50 miles, the ICE will keep the vehicle useful for large vehicle tasks. It makes sense. The Chevy Volt is the sort of vehicle that is is most appropriate for full electrification, not a vehicle like the Lightning that has to carry around a 1,800 lb battery to keep it (sort of) useful.
Sure seems that would be a better solution than trying to figure out where the lithium will come from to replace the three billion ICE cars currently serving the globe.
Thank you so much Paul for providing this extremely comprehensive article on the state of the world’s electric car progress (or lack thereof for some companies). You won’t find something like this at the old site — mainly a lot of grumbling, especially from the so-called Best and Brightest. Plus I no longer have access to the font of information from Automotive News now that I’ve retired from working at the IIHS.
We’ve been holding onto our 2015 Toyota Camry Hybrid because it’s been super reliable and fuel-efficient (averaging 42 mpg over its 86K-mile lifetime, measured via the old-school method: miles driven by gallons consumed).
I’ve been thinking about going all-electric, but the high prices, exacerbated by the pandemic, have given us pause. I haven’t researched it sufficiently, but because we now pay no federal income taxes due to virtually all current income deriving from SS, we may not be eligible for the $7500 credit.
Teslas are a dime a dozen here in Charlottesville, VA (university town), and I’ve seen several Rivian pickups and a couple of SUVs. The Mustang Mach E is virtually non-existent. Hyundai has a hit with the Ionic 5, and there are a few VW ID.4s running around.
I’m turned off by Musk’s personality and reports of quality issues with Teslas. I’m on the fence so far with Hyundai-Kia, so probably a PHEV from Toyota would make the most sense for us. Being retired, most of our daily driving is easily within the EV range of affordable PHEVs, and for the occasional road trip (mainly to visit our sons and families in the NYC area), we could rely on dino juice and occasional charging. (Our older son has a 2018 Volt with 220-volt charging capability attached to the side of his house.)
This post was much needed by this guy, though I didn’t know it. Very informative. And on many (most?) of the topics I must sheepishly admit that, yes. I’ve been under a rock.
Thanks, Mr. N.
These are interesting stories, for a variety of reasons.
The US companies have been basking in the luxury of high prices caused by supply shortages, whether real or engineered. They have axed inexpensive cars because they are getting near full price for more expensive models. This strategy by the Big 3 has given Tesla plenty of room to drive into popular price classes. I expect the worsening economy will change things, so we should look for discounting by the Big 3 and the addition of cheaper models by everyone.
I don’t trust the numbers coming from China. From what I have been reading, China is on the verge of an economic crash. China is not a normal economy, but one subject to control by a totalitarian government. Everyone tells the government what it wants to hear – until that becomes impossible, which is starting to happen now with failures of large real estate operations there. A big shakeout will be coming in all sectors of that economy.
One Chinese commentator (who now resides in the US) said that “China has built 50 year’s worth of housing in 10 years,” all on borrowed money. That chicken has now come home to roost. With the collapse of the top two developers, each owning more money than the GDP of a majority of UN members, the real estate market has crashed. China now has almost zero % interest rate, in contrast to most other countries, yet people are not borrowing and buying. Deflation is much scarier than inflation. Think about it … If you see prices dropping every day, would you buy anything? People say “China is going through what Japan went through 30 years ago” But there are key differences: 1) Japan’s per capita GDP was 3x what China’s is today. 2) Japanese was/is free and democratic. 3) Japanese government and corporations were/are not in the habit of constantly fudging and lying about numbers.
Thanks for this timely report. Like a lot of forum fans, I don’t pay a lot of attention to current automotive trends and news. I just subscribed to Motor Trend, not because I think that it’s the best auto mag, but because like Hot Rod magazine, (which I subscribed to for most of the last 50 years) it has really low subscription prices. I thought that it was time for more exposure to new models and their technology so that I could engage in informed discussions.
What really surprises me is how low fuel economy is with many popular mid sized vehicles, many are only able to achieve overall mileage in the mid to low 20’s. MT did a long term test of a RAM truck that averaged under 10 mpg!
Like a lot of people, I don’t see that much attraction in spending so much money on a new vehicle when a used vehicle in good condition can fill my needs at a much lower cost. There are a lot of people that will not be able to afford an EV until they drop drastically in cost. Also people that don’t live in a house with a driveway don’t find charging as convenient.
An increasingly relevant aspect of the switch to EV’s is the economic reality of ‘future value’.
Leasing is the most obvious problem. With EV’s becoming more competitive every year, what lease payment will have to be charged by leasing companies in order to guard against the possible slide in the resale value of an ICE SUV over the next 3 or 4 years when they take back possession?
Similarly, how many people are going to continue to be willing to pay 6% interest on a seven year car loan for an ICE SUV, once they start to think about what the resale value of that vehicle might be in 2030?
Yes, a great read about the current state of the auto industry, not only in the US, but globally.
Ford is the one that really seems to be screwing the pooch. The Maverick looked like a surefire hit, especially the sub-$20k hybrid version. But that one didn’t last long; isn’t it over $25k and sans the hybrid drivetrain now? Not to mention the big price increases across the board. That sure doesn’t seem to be helping their once popular EVs, either.
Likewise, one wonders how many cheap Chevy Bolts GM could have sold if they had been able to meet demand when the $7500 federal EV tax credit was reinstated. I dare say it would have been the Bolt, and not the Model Y, as being the biggest EV seller in the US, even with the Bolt’s slow DCFC.
And speaking of the Model Y, does Musk’s continual price reduction of the Model Y remind anyone of how Henry Ford kept reducing the price of the Model T each year until it was the best selling car in the US?
GM could not have increased Bolt production, as it was essentially locked in with a JV with LG, who built the batteries and other components. They could not have increased battery capacity at their plant; as it was, these LG batteries were of course defective and had to be recalled. That set Bolt production back even further. The Bolt was a money-losing “compliance mobile”; increasing production would likely just have increased the losses.
Tesla was constantly expanding their production facilities since the Y came out; it’s now built in Fremont, Austin, Germany and Shanghai.
Increasing production is much more difficult than it sounds.
GM could have increased Bolt production, but there was just way too many variables to do that, the least of which was the Bolt fire/battery recall/replacement situation that GM was just getting over. That diverted a whole lot of new Bolt batteries that could have went into new vehicles.
On top of that, GM had no way of knowing how the Inflation Reduction Act (IRA) was going to pan-out with regard to GM EVs, again, becoming eligible for the full federal tax credit. Even then, no one knew if it would be a permanent eligibility, and that’s what would eventually happen, finally, on April 15, 2023. Bolt sales and demand surged beginning January 1, 2023, and really haven’t abated much since. But April 15 of this year was ‘way’ too late for GM to increase Bolt production significantly.
If GM had a crystal ball and had known about any of this in advance years ago, they surely would have went the route of increasing Bolt production back then (and, yeah, maybe even going to the trouble of building new assembly/battery plants and extending Bolt production beyond 2023). In that scenario, Bolt sales might have ecliplsed Tesla.
But Mary Barra made the best decisions she could on the information available (including that the Bolt’s BEV2 battery was scheduled to be replaced by the modular Ultium platform). It was the right call at the time, even though Bolt supply, to this day, is still lagging behind demand.
You’re missing the key point: GM publicly acknowledged that they were losing $7,500 on each Bolt. That might have come down a bit over the years, but there’s no doubt they were (and are) making each on at a loss. So why expand production and lose more?
The whole point of the Bolt’s existence was to be a “compliance-mobile” meaning that they wouldn’t have to buy zero emission credits from Tesla. The other point was for the PR value, to show the world that GM could build a competitive EV (in actuality, LG builds many of the key components). But as a gen1 EV, its costs were way to high for the Bolt to ever be profitable. That’s precisely why they planned to kill it, because the next generation of Ultium-based EVs are (supposedly) lower cost, and more suitable for higher volumes. The reason the Bolt was given a reprieve is because GM realized that the Bolt had brought in a lot of buyers that would otherwise never buy a Chevy. And the gen2 Bolt will be Ultium-based.
Mary Barra (or any of the other established automakers) was never going to bet the farm on EVs like Musk did. They’re too worried about what the next quarter’s profit statement is going to be. That’s the huge difference; Musk was all-in from day one, and still is. The others are hedging their bets.
Yeah, I’m pretty sure all the “going all EV by 2030” claims were just PR. They can’t be that reckless, can they? Have they fired many ICE engineers yet?
The ‘money-losing compliance EV’ is a mostly valid argument with one caveat: the whole point of them is to be able to sell much higher profit, polluting, gas-guzzlers.
So, theoretically, the money lost on selling a compliance EV is regained (and, hopefully, more) by the profit made on the sale of a big, dirty, poor mpg vehicle, i.e., full-sized ICE pickups and SUVs.
In that regard, producing and selling as many compliance BEVs as possible would not be a bad thing. At least so long as an equal number of more profitable vehicles were sold.
FWIW, GM Authority has just reported that the final date for ordering a Bolt has been extended from Sept 28 to Nov 2. It’s unknown whether this will impact the final date of production, which had also previously been extended to Dec 20.
GM is also stating that Bolt production is on track to meet a goal of 70k units for 2023. That’s a lot of compliance cars to be losing money on.
https://gmauthority.com/blog/2023/10/2023-chevy-bolt-ev-bolt-euv-final-order-cycle-pushed-back-again/
They did state that but never updated it. There has been some suggestions that they were making money before the last price drop and are probably close to breaking even with the last one. But it’s hard to tell without GM saying it.
This, and Hamas/Iran’s attacks on Israel are the two most-depressing things I’ve read this month.
Hamas/Iran is of course more important, but Israel is fighting back, there’s a “unified” government taking action to set things right. Painful, but every hope of a successful outcome.
The state of the automotive landscape is as bleak now as it was in the mid-’70s, where there’s nothing but crap for sale, nothing but crap on the horizon, and our government is making things worse by forcing more crap down our throats, and enabling the crap-makers with tax-funded incentives and crap-friendly regulations.
Maybe we are coming into the new “malaise” era. The good thing is we all survived the last one and things eventually got better.
Thank you for your insights on the current market, Paul, as they are fresh and original, at least among the automotive sites, blogs, and publications I read. Like many here, I look forward to seeing the auto industry transition towards EVs and/or hybrids, but stepped back from the precipice of making that leap myself this year.
Early this year, we lost a car in a collision and needed something right away to replace the totaled vehicle. I was unenthusiastic about buying any of the current offerings, which left me with the feeling as either being somewhat compromised, end-of-the-line representations of the past (I hate start-stop engines and have no need for a truck) or not-quite-fully-baked glimpses of the future (EVs with limited range). We actually had a solid use case for an EV (this was to be a second car and used mostly for getting around town), but a complicating factor is that this was to be my wife’s car, and she wanted something “fun” after driving crossovers for nearly 20 years.
EVs were in short supply at the time, and commanded large price premiums in the DFW area, Texas’ economic and ideological ties to the oil industry notwithstanding. I was hesitant to buy a Tesla, because the first of several major price cuts were rumored to be imminent. Among hybrids and IC vehicles, much of what was on the dealers’ lots consisted of large, fully-loaded trucks (a non-starter for us) and SUVs or midsized sedans (nobody’s idea of fun).
Long story short, we bought a 2023 Mini Countryman, a fun-to-drive car. This was among the last of the 2023 models to be shipped to the U.S. before the factory changed over to manufacturing the all-EV 2024 models. This car is a placeholder and we are fully cognizant that whatever replaces it will likely be some kind of EV or hybrid, hopefully one that is more evolved from the standards of today.
Good call on the Mini; Stephanie has had her eye on those too.
A bit of an aberrant entry this for those who are primarily interested in classics, even of the mundane sort.
I have little to no interest in the new car industry, as old car enthusiasts, does anyone else think that far too much of the worlds talent and limited resources are devoted to the production of different versions of mousetraps with more and more knobs on that could be utilised on much more useful things.
As the band Devo said “freedom of choice is what we have, freedom from choice is what we want”
The question is, can the Chinese be trusted, it is hardly a level playing field from a manufacturing perspective and the green credentials of Chinese electric car production is suspect according to the EU so no, China will not be seeing any of my money; and will Elon Musk ever shut the F@ up
My hobby car is a1960 Rover p4, to make local trips to the shops I have a free bus pass (thanks UK govt), for longer trips for work I have a Honda Civic that has years of life left. Driving to cities and parking is becoming a real pain, the car is becoming the least best option for transportation in many parts of the world
I saw a video on youtube that claimed that Chinese government edicts have warped their EV industry as badly as their real estate market. He said they were overproducing cheap EVs, marking them as sold, then pulling the expensive parts out to put in newer vehicles and trashing what couldn’t be recycled easily. Ghost cities, ghost cars. Sounds crazy, but supposedly in the Great Leap Forward, they melted their farming implements to meet iron production quotas for the military due to fear of Mao, and then starved.
I had to get a different truck recently as the result of an accident (not my fault). I contemplated trying to get an electric vehicle, but the costs are still high for something I’d want – even after incentives and tax credits a Ford F-150 Lightning costs >> $50,000, not including any kind of financing costs. Plus there would be some possibly not insignificant costs to the electrical infrastructure of my house, which is old and in need of upgrading.
Now, granted, I’m not the kind of person who would typically buy a new car anyhow. But I did look into it at least.
I ended up getting an older Ford Ranger (actually a Mazda B-2500) with a 4-cylinder and a manual transmission, at < 1/20th the cost. I would also note the Ford F-150 is actually a rather large vehicle. Same is true of the Rivian and it is even larger and more expensive.
That said, the F-150 Lightning was appealing to me, even given my criticisms.
Seems to me the EV plunge will have to wait a little longer for me.
(Tried to reply to Paul’s comment about the Maverick, above, but for some reason either WordPress or Android or Chrome wouldn’t let me.)
Full disclosure – I ordered a Maverick hybrid in July when I couldn’t find one on a lot for under $10k markup, and yesterday I found out it is scheduled to be built in mid-December. 5-6 months is pretty long, but there are reports of people waiting 18 months, so Ford seems to be making strides.
But there is absolutely no doubt that Ford badly underestimated demand for Maverick in general, but especially for the hybrid. 40 mpg around town (with plenty reports of *much* higher if you’re a little gentle) is pretty attractive, as is the price. Even the $$ Lariats are comparable to a plain Jane CRV. Plus Ford is absolutely on top of their styling game these days, with just enough retro in their designs to not look like everything else, but still modern.. (Compare to GM –Chevy’s Blazer could easily be a Toyota or Mitsubishi or Hyundai/Kia, but a Bronco Sport is instantly recognizable. And the full size Brinco even more so.)
My only beef is that Ford didn’t nip the dealer markups in the bud. It put a sour taste in a lot of people’s mouths that will last for a long time. Three local dealers (all unrelated too) got caught and fined by the state selling ordered Mavericks out from under customers.
Thanks Paul for the very thorough article.
I believe hybrids still have huge potential for those with range anxiety or that live in rural areas. While hybrids are twice as complex as ICE or BEV vehicles manufacturers like Toyota have proven they build hybrids to last a long time before a major service is needed. A coworker just purchased a 2023 hybrid (non-plugin) Camry and gets 50-52 mpg in city traffic and 45-48 mpg at 70 mph highway. That’s pretty awesome mpg for a full size car so I feel hybrids should be mandated in many more vehicles both big and small. The big three seem hellbent on feeding Americans a diet of large and supersize vehicles because they claim that’s the only way to make a decent profit. To counter that BS and prove them wrong I think we should remove those tariffs against China for two years so they can see just how well those small cars and trucks would sell. The one condition is the vehicles from China must meet or exceed current crash test standards. I think doing that would embarrass the crap out of the naysayers.
Thanks for the informative article, Paul. This harkens back to your work at TTAC back in the day, and I find it refreshing.
Regarding the switch to BEVs and purchasing new cars: We presently have a 2009 Pontiac G6 with 176K miles and while mechanically good, rust is taking over and I don’t want to put money into fixing a nearly 15 year old car at this point.
We purchased a new car recently, after much debate and waiting to see how the EV market was going to develop. We went with another ICE vehicle as we couldn’t really parse where EV affordability and technology was going. Now, during this time Tesla started its price reductions (and the Fed raised interest rates in the US), but I don’t think it would have changed our final decision on what to purchase.
We will be facing retirement in a few more years and were looking for something inexpensive enough for us to pay off quickly but still meet our needs as far as we are able to see into the future. I was very interested in an EV, but in my area the infrastructure is not particularly robust.
Though I have a garage with 220V service, I still couldn’t get over the idea that I might take the car out of our area and find myself with the inability to charge. This was made evident when traveling to a family function earlier this year, as some of my family lives quite a distance out in the country, where the charging infrastructure is rather inadequate.
My wife originally wanted a Ford Maverick when they first were announced in 2021. I researched them diligently, and we decided the hybrid version as the best for our current and future needs. However, they are nearly impossible to find on dealer lots in my part of Michigan and the wait times for delivery were beyond what I was willing to endure.
I had considered a Chevy Bolt as an alternative, but those had a waiting list and my wife is not too enthused about EVs anyway. About a year ago I heard about the 2024 Chevy Trax which, has a very favorable starting price and could be equipped with a sunroof which was my wife’s wish. The only thing that is really high tech on the car is the infotainment system, otherwise the car is fairly conventional.
Ironically, we waited five months to purchase one, we almost could have gotten a Maverick within that time. Maybe when my T&C dies, I will look at a BEV again. But for now, I’m motoring on dino juice once more.
Tesla is interesting. As far as EV’s go they had a lot of margin available to drop prices. This will help them maintain a decent market share for a while as others are still struggling to build an EV at a reasonable cost. Alot of this is most likely driven by the low volumes and building new supplier chains for EV parts.Tesla also cut costs like crazy. The stripped out Tesla interiors are as much or more about cost saving than style. Once you have the touch screen anything you take away as a physical button is essentially a cost saving. From a pure financial standpoint it’s amazing Tesla exists their financials in the late teens were looking pretty dire, but true believer investors allowed them to float past that into what they are now.
Looking forward the price cutting on EV’s but not much on other vehicles (thou some rising incentives) seems to point to a softening in the EV market in North America. Which I think is somewhat expected. There is a large portion of the country that either doesn’t want or can’t afford EV’s. I think eventually that will change but I expect we will see some plateaus in demand going forward before they pickup again.
On a side note Stellantis pickups do offer hybrids. The V6 and the Hemi can be had in mild hybrid and they actually seem to sell a lot equipped that way. Also stellantis is now the leader in plug in hybrids in North America. The Wrangler PHEV looks like it will sell around 50k this year, the Grand Cherokee around 40k and the Pacifica around 30k. Which seems to point to Stellantis path in the near term for EV’s.