Wtf are these crackheads doing? EV’s are insanely simple machines compared to combustion ones. How could you ever fuck your production cost so much as to get losses like that. This feels like a manufactured failure to get bailed out or to stir public opinion on the whole china EV situation.
This is why the news is fixated on banning Chinese cars, because our companies suck
Somewhat Ironically, the tariff increase against Chinese cars is mostly for political show. There are virtually no Chinese cars being sold in the US, and those that are sold are not chinese brands but American brands (e.g. Buick, Lincoln) manufactured in China. The reason there are no Chinese brands on the market is that the existing 25% tariff is already enough to make it very unattractive.
However Biden is hoping to win the support of United Auto Workers and the like, who are all afraid of losing their jobs to Chinese workers getting paid a tenth of what they make or w/e. Trump has been using the same talking points, suggesting tariffs on Chinese cars built in Mexico (I don’t think that’s a real thing at this point, just something that could happen). It’s all political theater.
I bet there’s some magical tax system in play here.
1 billion in imaginary r&d costs split over 1 years sales.
This was the whole point of restructuring. Gaming our tax and legal system to maximize profits. Put all the losses into your LLC.
It’s basically the entire year cost divided by cars sold or something like that yes.
It’s a terrible way to do it.
For example, pre pandemic, Ford was actually just gross margin positive on the sale of the Mach E, which was quite impressive, but it was overall a loss due to all the R&D.
This is the same attack people used against Tesla early on as well. Since the Model S, Tesla was nearly always gross margin positive on their vehicles, but because of the massive R&D were still in the red.
At any moment, Tesla could have dramatically slowed growth and been profitable sooner, but you don’t grow and expand that way, so it was years of Tesla loses $X per car.
It was terrible then, it’s terrible now, it’ll always be terrible.
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What do you mean Pre Pandemic Mach E? Vehicle released December 2020 as a 21 model year.
Sorry my bad then, before the supply chain got Uber fucked by the pandemic.
It was originally gross margin positive. Then the supply chains for fucked and it was no longer gross margin positive.
Then the price cuts started happening after the supply chains resolved and it couldn’t get back there for awhile.
I don’t know if it is or isn’t GM positive today.
It’s expensive moving to the next version of the product that the consumer demands?
Running an innovative business is not all fields of flowers and line-go-up record profit margins?
Who could possibly have guessed other than literally every textbook on economics, finance, innovation or business accounting?
/s
Ford needs to put on it’s big boy pants and figure this out. There’s only so much gas in the ground.
put on its* big-boy pants
Relevant user name.
I do English good. But my keyboard doesn’t two well.
What the heck are they doing wrong? If they sell an EV for 70k and still make a 130k loss on it, what are they doing to make the production cost 200k in the first place?
Buying and running the tools it takes to make the EV, running the factories and training the workers are all very expensive. So the losses implies they projected a LOT higher volume than they’re currently producing so all the expensive equipment sitting idle is spread over the smaller volume of cars. These are called NRE (non-recoverable expenses).
So the losses are not production losses, but a complete failure in the projection? OK, quite possible.
The problem they have is they’re trying to sell it for 200k. Maybe they didn’t try and sell it to so much money they’d actually make money paradoxically.
Ok how about I don’t buy one then and they can just give me $120k instead. Win-win.
That’s what happens when you have to be a loss-leader to secure your position in the market. Even when the government steps in to protect you you still claim it’s a loss even though you’ve been crowned leader.
Is Ford the leader in the EV market?
In reality no, they are not.
I know a few people that work in a Ford plant. Just a week ago, they shut down to retool the place for electric vehicles. Initially expected to take eight months, it’s now about two years.
They might have cancelled some orders from a specific supplier, but it’s not like Ford is turning away from EVs as a whole.
Ford will follow Toyota and make PHEV a good portion of their lineup.
The PHEV F150 and Maverick are perfect trucks. 80 miles will make sure you rarely use gas, and having 425bhp + not having to rely on charging stations will eliminate range anxiety.
I wish ford would do that but I don’t think they will. They’re only bringing the phev ranger to Europe, and iirc started they had no plans to make the maverick a plug in. And the f150 already has the electric version in the lightning.
I think it’s funny this news comes out just after they add a 100% tariff to Chinese EVs. I’d of course not want to see US automotive industry destroyed by cheap Chinese EVs but there’s no way the US cannot compete
