4 ms·

I think Ford will pull into second by the end of the year. GM is in second, but as you pointed out, GM is really slow.

by _ea1k 3y ago

brianwawok 3y ago
As far as I can tell Ford is still losing money on every EV sold (while Tesla is making 20% margin). Not sure how much they can grow if they can’t flip to profitable.
- jjoonathan 3y ago
  Are they still losing money if you take out fixed costs? Or are they "losing money on every EV" in the sense that the first car off a $5B production line is a $5B loss (modulo depreciation schedule)?
  - simondotau 3y ago
    Yes. They're losing money as in negative profit margin per unit. The more units they sell, the more money they lose.
    - Tagbert 3y ago
      Are you basing that on their recent financial report where they showed a $3B loss? That was not an operational cost (cost of sales). It was a capitol cost (infrastructure to build and equip factories). That is not what would normally be thought of as a loss per unit.
      - 93po 3y ago
        Sources online don't say definitively, so it's hard to really know. Ford says a large portion of the loss per unit is engineering costs. They also say the expect positive margins in 2026. I imagine if it wasn't a loss beyond R&D expense they'd proudly proclaim as much, and they aren't.
- neogodless 3y ago
  Ford's ICE division is still quite profitable, so that supports them in the meantime. Why do you assume they "can't flip to profitable" on their (quite young) EV division?
  - brianwawok 3y ago
    What are their reasons for not being profitable? Is it volume (they need to double volume), or is it the vast inefficiencies in their network (3rd party supplier glut, dealerships, etc). I am not sure a manufacturer with a dealer network and union assembly could ever match price with a no-dealer no-union manufacturer.
    - itsoktocry 3y ago
      >I am not sure a manufacturer with a dealer network and union assembly could ever match price with a no-dealer no-union manufacturer. Are you saying that Tesla can only make money by having a relatively underpaid workforce? Do you think that's sustainable? >vast inefficiencies in their network (3rd party supplier glut, dealerships, etc) Wait, you think the automotive supply chain is inefficient? JIT auto manufacturing is a modern marvel... Dealers? That's a tough one. Lots to improve, but you can't eliminate customer service. I'm not sure being beholder to the manufacturer is great for consumers, either.
      - cogman10 3y ago
        > Wait, you think the automotive supply chain is inefficient? JIT auto manufacturing is a modern marvel... It's super efficient for a the current high complexity vehicles we have. It really struggles, though, when you deviate from the formula. This is pretty evident with the earlier ford evs like the ford focus. Where the only way they could get a battery in is by slapping it into the trunk. The skateboard model of evs is WAY more efficient but requires significant retooling. And, at this point, is pretty much all inhouse standards. There's nobody (AFAIK) manufacturing a standard battery pack module. Every EV manufacture has been left to making their own standards there. That's what has driven up the cost more than anything. Huge portions of the manufacturing line need to retool and that's a long slow processing. In the meantime, companies like telsa were able disrupt by doing the less efficient ground up approach. As EVs become more common and standardized, this will of course change and tesla's ev manufacturing will end up a liability rather than an asset. But until that happens, they get some pretty nice profit margins that will be hard to beat.
- itsoktocry 3y ago
  >while Tesla is making 20% margin They have 20% gross profit margins, while capitalizing costs that other companies expense. You can't compare the numbers.
  - brianwawok 3y ago
    I am not sure this matters. The point is Tesla is making money per EV sold, and Ford is losing money per EV sold. I don't care if the Tesla number is 20% or 14% or 31%... what matters is the more Ford makes, the more they lose - and I don't yet see how they are going to flip that.
    - alphabettsy 3y ago
      How you do your accounting absolutely matters. See Enron.
      - brianwawok 3y ago
        I’m arguing on the internet not filing taxes.
agloe_dreams 3y ago
GM is downright handing it to them. They just killed the Bolt, their only volume model right now.
- neogodless 3y ago
  Too early to tell (as it isn't yet available), but the Chevrolet Equinox EV should basically be a Bolt EUV with a (subjectively) better looking face and more name recognition. Similar range/price.
- supportengineer 3y ago
  Every Bolt and Volt owner I’ve met really liked the cars.
  - cogman10 3y ago
    Yeah, roughly the cost of a leaf, better range, and not ugly. They were close to the perfect commuter cars (I very nearly went with the Volt, but went with a model 3 in 2018 instead.).
  - agloe_dreams 3y ago
    I test drove a second gen Volt when we were looking for a second car, Wife preferred an SUV but I was in love with the Volt. Wildly cool car that is shockingly fun to drive.
  - hedora 3y ago
    I rented one. My only concern is that it was made by GM, and I've had uniformly negative experiences with them in recent years. It made me think they might be moving in a reasonable direction after all, but they proved that thought wrong in the last month or two. Oh well. Too bad they couldn't sell the plant + Bolt designs to some other company, like when The Expanse moved to Amazon.
- cogman10 3y ago
  I think we are seeing the effects of a supply chain strain around battery production. GM is killing the bolt in favor of trucks. I'm sure they'd still want the bolt but likely trucks are more lucrative and batteries hard to come by. My guess is 10 years before that battery crunch eases up.

I think Ford will pull into second by the end of the year. GM is in second, but as you pointed out, GM is really slow.

by _ea1k 3y ago

I think Ford will pull into second by the end of the year. GM is in second, but as you pointed out, GM is really slow.

As far as I can tell Ford is still losing money on every EV sold (while Tesla is making 20% margin). Not sure how much they can grow if they can’t flip to profitable.

jjoonathan 3y ago
Are they still losing money if you take out fixed costs? Or are they "losing money on every EV" in the sense that the first car off a $5B production line is a $5B loss (modulo depreciation schedule)?
- simondotau 3y ago
  Yes. They're losing money as in negative profit margin per unit. The more units they sell, the more money they lose.
  - Tagbert 3y ago
    Are you basing that on their recent financial report where they showed a $3B loss? That was not an operational cost (cost of sales). It was a capitol cost (infrastructure to build and equip factories). That is not what would normally be thought of as a loss per unit.
    - 93po 3y ago
      Sources online don't say definitively, so it's hard to really know. Ford says a large portion of the loss per unit is engineering costs. They also say the expect positive margins in 2026. I imagine if it wasn't a loss beyond R&D expense they'd proudly proclaim as much, and they aren't.
neogodless 3y ago
Ford's ICE division is still quite profitable, so that supports them in the meantime. Why do you assume they "can't flip to profitable" on their (quite young) EV division?
- brianwawok 3y ago
  What are their reasons for not being profitable? Is it volume (they need to double volume), or is it the vast inefficiencies in their network (3rd party supplier glut, dealerships, etc). I am not sure a manufacturer with a dealer network and union assembly could ever match price with a no-dealer no-union manufacturer.
  - itsoktocry 3y ago
    >I am not sure a manufacturer with a dealer network and union assembly could ever match price with a no-dealer no-union manufacturer. Are you saying that Tesla can only make money by having a relatively underpaid workforce? Do you think that's sustainable? >vast inefficiencies in their network (3rd party supplier glut, dealerships, etc) Wait, you think the automotive supply chain is inefficient? JIT auto manufacturing is a modern marvel... Dealers? That's a tough one. Lots to improve, but you can't eliminate customer service. I'm not sure being beholder to the manufacturer is great for consumers, either.
    - cogman10 3y ago
      > Wait, you think the automotive supply chain is inefficient? JIT auto manufacturing is a modern marvel... It's super efficient for a the current high complexity vehicles we have. It really struggles, though, when you deviate from the formula. This is pretty evident with the earlier ford evs like the ford focus. Where the only way they could get a battery in is by slapping it into the trunk. The skateboard model of evs is WAY more efficient but requires significant retooling. And, at this point, is pretty much all inhouse standards. There's nobody (AFAIK) manufacturing a standard battery pack module. Every EV manufacture has been left to making their own standards there. That's what has driven up the cost more than anything. Huge portions of the manufacturing line need to retool and that's a long slow processing. In the meantime, companies like telsa were able disrupt by doing the less efficient ground up approach. As EVs become more common and standardized, this will of course change and tesla's ev manufacturing will end up a liability rather than an asset. But until that happens, they get some pretty nice profit margins that will be hard to beat.
itsoktocry 3y ago
>while Tesla is making 20% margin They have 20% gross profit margins, while capitalizing costs that other companies expense. You can't compare the numbers.
- brianwawok 3y ago
  I am not sure this matters. The point is Tesla is making money per EV sold, and Ford is losing money per EV sold. I don't care if the Tesla number is 20% or 14% or 31%... what matters is the more Ford makes, the more they lose - and I don't yet see how they are going to flip that.
  - alphabettsy 3y ago
    How you do your accounting absolutely matters. See Enron.
    - brianwawok 3y ago
      I’m arguing on the internet not filing taxes.

agloe_dreams 3y ago

GM is downright handing it to them. They just killed the Bolt, their only volume model right now.

neogodless 3y ago
Too early to tell (as it isn't yet available), but the Chevrolet Equinox EV should basically be a Bolt EUV with a (subjectively) better looking face and more name recognition. Similar range/price.
supportengineer 3y ago
Every Bolt and Volt owner I’ve met really liked the cars.
- cogman10 3y ago
  Yeah, roughly the cost of a leaf, better range, and not ugly. They were close to the perfect commuter cars (I very nearly went with the Volt, but went with a model 3 in 2018 instead.).
- agloe_dreams 3y ago
  I test drove a second gen Volt when we were looking for a second car, Wife preferred an SUV but I was in love with the Volt. Wildly cool car that is shockingly fun to drive.
- hedora 3y ago
  I rented one. My only concern is that it was made by GM, and I've had uniformly negative experiences with them in recent years. It made me think they might be moving in a reasonable direction after all, but they proved that thought wrong in the last month or two. Oh well. Too bad they couldn't sell the plant + Bolt designs to some other company, like when The Expanse moved to Amazon.
cogman10 3y ago
I think we are seeing the effects of a supply chain strain around battery production. GM is killing the bolt in favor of trucks. I'm sure they'd still want the bolt but likely trucks are more lucrative and batteries hard to come by. My guess is 10 years before that battery crunch eases up.