Electric vehicles have not been produced in the United States quite as many legacy automakers expected. Or more realistically, it has not yet been achieved.
The US market is certainly not on track to reach 45% electric vehicles by 2030, as Ford says it is planning. Now, despite billions of dollars invested in manufacturing and R&D, it has happened I’m starting to back away from an all-electric future It’s now setting its sights on hybrids, long-range electric vehicles, and cheap gas cars, too. But shifting away from current plans is a costly process.
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Welcome back to Critical materialsYour daily report on everything related to electricity and technology in the field of cars. Also on board: China is cracking down on a new car price war, and Hyundai is tapping veterans BMW and Porsche to up its technology game. Let’s jump.
25%: Retiring Ford’s electric car will cost $19.5 billion
Photo by: Ford
Today, about 17% of Ford’s global production volume comes from electric vehicles. This means mild hybrids, plug-in hybrids, and electric vehicles. It aims for this number to reach 50% by 2030, but this depends on significantly expanding its efforts from fully supporting an electric car-focused future to one that prioritizes hybrid cars instead.
This is what Ford announced yesterday. The F-150 Lightning EV is deadThe next model will be a long-range electric vehicle with a gas engine. The next-generation all-electric F-150 and a new electric truck have been canceled. A battery factory will be used to make energy storage systems for artificial intelligence data centers instead. The immediate focus is on gas and hybrid vehicles.
It’s a significant reduction after Ford’s two electric models — the Lightning and Mustang Mach-E — have continued to sell well, but are widely unprofitable.
But in the automotive industry, changing course is difficult and expensive. The pivot will cost Ford nearly $20 billion in “special items” due to the need to turn around its business efforts over the next half-decade, according to the latest financial guidance Ford issued Monday.
CNBC Outline of details:
The Detroit automaker said most of these charges will occur during the fourth quarter. That will be followed by $5.5 billion in cash to be collected through 2027, the bulk of that amount to be paid next year, Ford said.
(…) The charges announced on Monday, including an $8.5 billion write-down of electric vehicle assets, are linked to major changes in Ford’s business plans.
Ford says it tracks its customers’ purchasing preferences. “We evaluated the market, and we made the call,” Ford CEO Jim Farley said in an interview with CNBC. “We follow customers to where the market is, not where people think it will be, but where it is today.”
However, this is a complete reversal from the Biden years, when Farley and other auto industry CEOs welcomed tax incentives for electric vehicles and plans to make batteries here in America. Two weeks ago, Farley stood behind President Donald Trump and praised weakening fuel economy regulations. like Car News In other words, “What a difference management makes.”
It’s important to note that Ford’s move is not about declaring the death of electric vehicles. The automaker is still pinning its hopes for the future on A new EV platform starts with a $30,000 electric truck Scheduled in 2027.
Instead, Ford recognizes this Building electric vehicles is expensive And the costs, which are passed on to the consumer, are not something customers want to spend money on. This is true now more than ever, Excluding the $7,500 tax credit to support sales Regulatory certainty becomes shaky at best.
Perhaps a better way to look at it is to acknowledge that the first draft of modern electricity was a bit optimistic and that consumers aren’t ready to jump in headfirst. The next rewrite will be more careful with hybrids of all kinds that will bridge the gap between combustion and battery electric – well, assuming that Recent changes in CAFE standards cause no change in that either.
At least, that’s the current hope. Who knows where the auto industry and Ford will be in five years.
50%: China takes strict measures against vehicle prices
Photography: BYD
China’s new car market has turned into a blazing pit of discounts that has driven the cost of new cars into the ground. This may sound great for consumers, but for automakers — especially the country’s 100 EV startups — it’s a test of resilience. Those who can afford to lose do so, and Those that cannot perish.
Needless to say, Beijing is now getting involved. The government realizes that this kind of behavior is not in anyone’s interest, and has proposed a set of rules that would prevent manufacturers and dealers from selling new cars at a loss. Car News He explains:
The State Administration for Market Regulation announced a set of proposed guidelines late on December 12, including measures that would prevent manufacturers from pricing cars below the cost of production, and prevent dealers from offering discounts or rebates that would effectively lower car prices below cost.
Shares of BYD and other Chinese electric car makers, which had been relying on discounts to support sluggish demand, fell on Monday as the move signaled greater scrutiny of the industry. Although China has publicly shamed automakers for more than six months over the “rat race” and warned about the industry’s financial health, prices have continued to fall.
No matter how much you think the cheapest new cars in China cost, you are almost certainly underestimating. In June, the average transaction price for the giant BYD was only $16,480. That same number fell nearly 7% in October to just $15,340. For comparison, the average transaction price in the United States was $49,766 in October, according to Cox Automotive.
The real problem is not just cost, but the huge excess capacity of China’s new car market. Its automakers build far more cars than they can sell domestically, leading to schemes such as “Zero Mile Used Electric Cars“And a large number of exports. As regulatory bodies begin to take strict action against them Those Problems, brands highlighted their blunt survival tools: discounts.
The ultimate goal is to stop the bleeding. But if consumers are already accustomed to waiting for the next discount to arrive, the problem of excess capacity may get worse before it gets better.
75%: Hyundai appoints Porsche and BMW veteran to lead technology
Photo by: Hyundai
Hyundai has been killing it lately. From software to electric cars and even the new Magma line of high-performance Genesis cars, the Koreans have figured out how to transform a brand’s image from a bargain basement to a market leader in just a few decades.
There is now a change in its executive leadership. Manfred Harrer, a veteran engineer at Genesis and across a handful of German brands including Audi, BMW and Porsche, is being moved to a senior position within Hyundai’s leadership team to become the brand’s latest weapon in software-focused vehicles.
Now, Harrer has been working with Hyundai for more than two years under its Genesis brand. He led the brand’s technology development unit within Hyundai’s R&D division during his tenure and has his fingerprints all over the Magma sub-brand, which is being refocused as a way for the luxury brand to take on German rivals such as BMW’s M division. Harrer’s new role will not be about turning corners, but rather another way to beat the competition.
Hyundai has decided to appoint Harrer as head of R&D who will oversee the technology-focused development of the brand as the brand shifts its efforts towards prioritizing software-defined vehicles.
Given his tenure at Apple where he worked on the now-defunct Apple Car and across the Volkswagen Group brands, Harrer has a culture from both companies that feeds into his leadership style. With any luck, it could help the Korean automaker stay ahead of key technologies like connected software and autonomous driving.
100%: Where did legacy automakers go wrong with electric vehicles?
Photo: Mac Hogan/InsideEVs
Legacy automakers are having a tough time with electric vehicles. From sluggish sales to a complete pullback on spending, major combustion-first brands are feeling the pinch of spending money on switching from ICE to EVs. Meanwhile, newer electric-first startups, such as Tesla, Rivian and Lucid, are forging ahead despite potential consumer pushback.
Where did legacy automakers go wrong, and what is the right way forward? Is it a return to hybrids? EREVs? Or should Ford have just made better and cheaper electric cars? Let us know in the comments.
