For low-cost, mass-market electric vehicles, lithium-iron-phosphate (LFP) batteries are a clear favorite. They skip pricey materials like nickel and cobalt, offer reasonable energy density, better thermal stability and last far longer.
U.S. automakers want to build them here, but they can’t do it without federal subsidies and China’s help. Now, as those subsidies are under the woodchipper, Ford’s joint battery plant with Chinese battery maker CATL in Michigan is on shaky ground. That could spell trouble for its affordable EV plans.
Bill Ford, is ringing the alarm bells over the potential demise of the manufacturing credits.
Bill Ford is ringing the alarm bells that their wild-eyed pursuit of the fat profit margin that Tesla used to report is about to blow up in their face. Ford committed $5.6B to it’s “Blue Oval City” plant in Tennessee, to build 300-500,000 (reports vary) electric F-150s per year. Their current “Lighting” plant in Dearborn is sized to build 150,000/year, but it barely runs one shift. It was closed entirely for two months last winter. And that was before the BBB spiked all the EV incentives and subsidies.
fwiw, over the last few days, I have had a feeling Ford is going to report really bad sales next week. Decided to take my profit and move on.
On the bright side, the F-150 Lightning is outselling the Cybertruck.
The Lighting has the advantage of being an actual, functional, pickup, rather than a tithe to a cult.
I saw a piece last night, that showed a storage lot crammed with unsold Teslas, right next to a storage lot crammed with Fords. Ford’s inventory. at last report, was about double the industry norm.
Anything that needs subsidies, by definition, is not economically viable. Do they ask taxpayers if they want to fund something from which they reap no direct benefit?
Maybe. But maybe not. For EV cars/trucks especially there is a big inertia for people to just continue buying ICE cars. The initial cost is lower but the fuel costs (home charging) and maintenance costs are higher than EVs. So it is reasonable to believe that the average consumer needs a nudge towards buying an EV.
Additionally, due to range anxiety (real or imagined) this is only helped by advancing the technology and building more chargers. Both of these things requires a critical mass of lots of companies making EVs and lots of demand for the fast chargers…thus more nudges required here (to the car companies and to the fast charger businesses to scale up).
As long as there’s a way to borrow more money, there’s no discipline pushing efficiency.
There seems to be a large number of people with this job description: my job is to say no, with one exception . And what is the exception, the one circumstance where the answer is invariably yes?Borrow more money? Yes, a thousand times yes.
In theory, we’re supposed to invest our surplus capital in new technologies that increase productivity and efficiency, but that’s not what happens in the real world.What actually happens is we squander surplus capital, energy and labor on inefficiency, until we’ve consumed the surplus.
Inefficiency is profitable to those soaking up surplus money, but it’s not actually productive, nor does it serve the public interest.
But there’s always one solution when surpluses dry up: borrow more money.And this is how we arrive at this chart of total debt: $102 trillion.
“Did the US government subsidize the microchip industry in the 1970s?”
Yes, the U.S. government provided support for chip development in the 1970s, though not through direct subsidies in the same way as the CHIPS Act of 2022. The government played a key role in fostering the industry through research and development investments, providing reliable customers (particularly in the defense sector), and creating a demand environment that spurred economies of large-scale production
“Did the US government subsidize the microchip industry in the 1980s?”
Yes, in the 1980s, the U.S. government provided subsidies and support for chip development, primarily in response to concerns about the competitiveness of the U.S. semiconductor industry, particularly compared to Japan. This support included initiatives like [Sematech], a research consortium of U.S. chipmakers, and trade measures
‘Has any country ever developed a chip or semiconductor industry without using subsidies?”
No, no country has developed a thriving semiconductor industry without significant government support in the form of subsidies, incentives, or other forms of public investment. The semiconductor industry is characterized by extremely high development and manufacturing costs, along with complex technological challenges, making it a risky endeavor for private companies alone
The kids in school were discussing going to Europe during the Summer vacation. I told my dad I wanted to go along. He replied, “Go ahead.” I don’t remember my exact words but it was along these lines, “Dad, the problem is that I don’t have the money.” His exact reply, “Mit geld ist es kein kunst.” (With money it is not art.)
Years went by and with his help I got a job at IBM. His hotel was just around the corner from IBM and IBM executives were frequent guests.
One evening, after dinner, I said to my dad, “I would like to buy a car.” He replied, “Go ahead.” I don’t remember my exact words but it was along these lines, “Dad, the problem is that I don’t yet have the money. to pay for the car.” His exact reply, “Mit geld ist es kein kunst.” (With money it is not art.)
Some time later I tried to get a loan, not sure what for, and I was asked for my credit references. “What is that?” I asked. When an Encyclopaedia Britannica sales rep came by I asked if I could buy it on credit. “Sure, no problem.” Now I had my credit references! As I recall, I only made one purchase on credit, a Dodge Dart.
There was a lot of inertia behind VHS, but then DVDs came along. People didn’t need convincing with subsidies to make the switch. Clearly the situation with EVs is murkier. There is also a significant percentage of EV buyers who switch back to ICE, which I don’t recall happening with DVDs and VHS.
Maybe the US auto market isn’t and shouldn’t be a priority for EV makers? We have low gas prices, low population density, and very high miles driven per person (with a corresponding longer trip length).
That works out to a 1% per year growth rate in market share. Which is fine but isn’t setting any world records. It’s not that there isn’t a market in the US, but it’s clearly not what was expected (by both policy and industry types) just a few years ago.
Indeed. Having them available for those who want them and can afford them is different than making them a priority and having others pay (through subsidies) for their purchase.
LOL
Yep.
I had the same sort of discussion with my dad around age 13 or 14. I received $1 allowance a week. And no possibility of a loan from parents based on future allowances. Pops “I guess you need a job.”
And there was a plethora of part time & odd jobs available in my neighborhood. I took to working like a duck to water. As a teenager I always had plenty of cash.
When I was in university I signed up for an Exxon credit card which arrived at my parents home. When I was home one weekend they flipped the OPENED envelope on the kitchen table. They pointed out the interest I would be charged for not paying off the gasoline bill monthly AND they would NOT bail me out if I misused the credit card.
As you can see I had ample evidence of child abuse and a felony charge for opening my US mail. But being the bigger man I let it slide.
My parents monetary policy was form by their being 9 & 10 in 1929 and living through the depression.
Yep True. It was the government picking & choosing which jobs were more important.
In other industries the US government blithely allowed clothing and tech, pharma & some auto manufacturing jobs slide into China or Mexico.
Not surprising, politics interfering with economics.
