While all the headlines were about Ford’s “affordable” midsize EV pickup to be built in Louisville, buried was another delay in their huge, greenfield, plant in Tennessee.
What is being said in this report should send shudders through any Ford shareholders, about another impending Farley foul-up.
Steve
Farley not only borrows Tesla’s Unboxed Process but also Elon Time?
The Captain
What I’m trying to reconcile is Ford can’t get “Blue Oval City” running, but they commit Billions more to another EV truck plant. So, are they really that poor at planning, or are they looking at Lighting sales and deciding an F-150 EV isn’t what the market wants, but maybe the midsize is, but they don’t want to write off the Tennessee plant, so they keep spending money on it, without finishing it, so they don’t need to explain a multi-Billion write off to shareholders.
Steve
Steve, you are looking at the microcosm level but the issue is macrocosm, a paradigm shift, ICE to EV disruption, flip-flopping incumbents, not just Ford but Hertz, VW, Toyota and, many others except China.
The issue was well documented by Clayton Christensen’s theory of disruptive innovation. Essentially the old guard defending their turf against innovation which creates chaos. The best solution yet seems to be Lockheed’s Skunk Works to keep the warring factions apart.
Farley tried it by splitting Ford into two divisions, Ford Blue and Ford Model e. Looks like it didn’t work well enough.
The Captain
I would think that would be difficult when the spending reaches billions of dollars a year. There are bound to be conflicts over money.
DB2
Farley split Ford into three divisions: one for ICE consumer vehicles, one for EVs, and one for commercial vehicles. (he was probably listening to McKinsey again) The commercial vehicle division is, by far, the most profitable…probably because GM and Strabismus are the only competition. The EV division is losing buckets of money, some $5.5B/year, according to an article I read yesterday.
Whichever “cosm” you look at, Farley is a buffoon. This article on 24/7 Wall St throws shade on his entire EV program. One thing jumped out at me. Farley was bragging about the thousands of jobs the Louisville plant will “create”. This article states it more accurately “The plan will “preserve” 2,200 jobs at Ford’s Louisville Assembly Plant”. Actually, no. The Escape SUVs (known in the EU as the Kuga) the plant has been producing are popular. The streets around here are crawling with them. Farley said a couple years ago, he wanted to drop the Escape, because it was dragging down his average transaction price (ATP) and average GP per vehicle. So, while GM moves production of the Equinox SUV to the US, Honda and Nissan increase US production of their SUVs in that segment, Ford drops it’s entry, to fluff up the metrics Wall St looks at. He replaces a popular model with one that will probably be as much of a flop as the Lighting (15,860 sold this year, through July, vs 93,805 Escapes). Most of those “jobs saved” will probably spend a lot of time laid off.
https://247wallst.com/investing/2025/08/12/fords-new-ev-plan-falls-apart/
Steve
The thought crosses my mind, that Farley may try a bait and switch ploy with the new “$30,000 pickup” When the Maverick first came out, it was hybrid only, and started at $20,000. A lot of people wanted them, at that price, but you couldn’t hardly find one to buy. Now, there are plenty of Mavericks in dealer stock, but, in four years, Farley jacked up the price nearly 50%. Now it doesn’t pull down his ATP and GP metrics as badly as it did at $20,000.
A “bait and switch” strategy would work like this.
customer runs into dealership: “show me that $30,000 EV pickup”.
dealer: “we don’t have any. If you want one, put down a 20% down payment, and we’ll put you on a list. You might get a truck in six months, or a year.”
dealer: “of course, we have Lightings in stock. you can have your EV pickup today”
customer: “good grief that thing is expensive, I can’t afford that”
dealer: “what if I told you the payments on a Lightning can be lower than on the smaller truck"?”
customer: “???”
dealer: “if you put $5,698 down on a Lightning, and financed for 84 months, the payment would be $653. If you put the same amount down on the smaller truck, and financed for 36 months, the payment would be $746. See? You can have a Lighting today, and pay less per month”.
“Bait” people with the $30,000 price, to get them in the dealer, then “switch” them into a $55,000 truck.
by the way, those payment rates are taken off of Ford’s web site, for a Lighting financed for 84 months, and a $30,000 Maverick, financed for 36.
Steve
Well of course. $25 mil is barely enough to buy a medium grade CEO these days. You need to offer billions to get one of those ‘top tier” candidates the consultants tell you that you need.
Get with the program. What are you, stuck in the 90’s?