Ford has committed to spending tens of billions of dollars to comply with government EV mandates. The result? Its EV division lost $1.3 billion in the first quarter of this year, about $132,000 for each sale. Ouch. Other auto makers that have been slower to invest in EVs have benefited from their caution. Ford doesn’t like that and wants them punished.
The EPA’s quotas will also result in higher prices for gas-powered cars, as auto makers seek to offset EV losses.Note that Ford has slashed EV prices to boost sales, while raising prices on some popular gas-powered models. This cost-shift won’t be sustainable as the EPA mandate ratchets up. Ford’s worry is that its EV investments will be for naught if the rule gets blocked in court. Then competitors that haven’t spent as much on EVs will speed ahead.
Ford is supporting the Administration’s regulation because it wants to socialize EV losses across the industry, even if this means consumers can’t buy the cars they want.
Shiny-land, oh Shiny-land, were laws are written by corporate lobbyists.
Actually, Ford’s business plan has been to jack ICE ATP and GP to infinity, regardless what happens with EVs. They don’t care about volume or market share. They will happily close plants and put people out of work, as they narrow their business focus on progressively more expensive, more profitable, models.
The WSJ is a fine paper, but its opinion pages are written clowns who have very little understanding about how business or the economy actually works. The automakers don’t actually care all that much about CAFE standards or tail pipe regulations, what they want is consistency. All the big three have made huge investments in meeting future EV targets. They don’t want that pulled back at this point. They’ve been very candid on this point.
And, when an automaker gets caught leaning the wrong way, he goes crying to the government for protection. Remember the “voluntary import restraints” put on Japanese cars in the early 80s, because people didn’t want the shoddy, gas hogs, that the big three wanted to build?
In the back of my mind is the thought Ford embraced EVs because they were looking at the fat profit margins Tesla used to enjoy. Chasing fat margins is what Ford is about these days, regardless if the car is an ICE or EV.
Here’s a chart of the last 15 years or Ford quarterly profits. Where do you see “more profitable”? Seems like their profits have been rather flat-ish for all that time.
I said that Ford was chasing fat margins on their cars, not that the margin chasing was offsetting the other things Ford is accomplishing, like a high warranty claims expense, because their cars are so poorly designed.
