Ford Creates Separate EV and ICE Businesses

[PandaBear]

Ford will invest billions into the e Business Unit. If the e BU fails, it could be curtains for Ford.

More like borrow the money to build e Business, then cash out the stock price increase before they even have to deliver profit yet. Basically the game is you have to be a clean sheet startup with no baggage, no profit, no revenue, but a big vision, to become a unicorn startup and make billions out of thin air.

 

[OVERKILL]

Contray to what some think, I do believe that other automakers entering the EV market is a good thing. Competition will keep all of them on their toes.

I was just pointing out how Ford's plan may sound good at first glance, they, like other legacy automakers will really need tens of billions of dollars in capital and an effort similar to what the US launched with our manufacturing might to win WWII in order to catch up. Is that even possible today ?

Ford expects to sell 2 million EV's by 2026 in what will really be their sophomore effort. By 2026 Tesla will likely have another 4 factories rolling out vehicles that have long had the bugs worked out of them. And will easily sell 3 or 4 million per year. Maybe a lot more if they put some effort into producing a very inexpensive EV for the emerging market in Asia and the Indian subcontinent.

Well, they are already doing interiors better than Tesla, so there's that.

As I pointed out in the BMW EV thread, BMW is currently grappling with the issue of everybody who wants a BMW likely already having one, so they have a fight on their hands trying to convert other brand buyers or encouraging existing buyers to upgrade. This is the position that most major brands are in. That's not an issue Tesla has yet, they are still in growth and expansion mode but at some point market saturation for those who desire one will put them in the same place that all the other marques are in right now. I have no idea when that will happen, but it is inevitable.

 

[CKN]

It's quite obvious that Ford is setting up to sell their BEV, EVs etc., with as little dealer involvement as possible. That's the writing between the lines......

 

[Job]

I see Ford commercial vehicles every day. transit buses, local government fleets, emergency vehicles, even Amazon branded delivery vans. Huge big vans getting hard use. I wonder sometimes why Ford isn’t higher in the valuation. That’s a huge income stream they have. I don’t know if they still make farm equipment but they make a wide variety of products all over the world.

 

[E365]

 

[avacado11]

I’m surprised Ford doesn’t separate from their EV devision so they can do direct sales. It wouldn’t be part of Ford anymore, thus not fall under franchise laws. It would solve all dealer mark ups.

 

[wpod]

Ford will invest billions into the e Business Unit. If the e BU fails, it could be curtains for Ford.

A Chinese corp will buy them up at a steep discount.

 

[PimTac]

I’m surprised Ford doesn’t separate from their EV devision so they can do direct sales. It wouldn’t be part of Ford anymore, thus not fall under franchise laws. It would solve all dealer mark ups.

Nah, Ford will set up separate dealerships across the USA. That’s the American way.

 

[JeffKeryk]

A Chinese corp will buy them up at a steep discount.

The EV business venture will make or break companies depending on how well they execute. I believe Ford will be fine.
CEO Farley has "right sized" the company and is doing the right things. Or at least saying the right things. He recently lambasted the dealerships for jerking up prices of the Mustang Mach-E and Lightning.

Ford made the Lightning much closer to a "ground up" vehicle than manufacturers who have taken the compromise approach. I admire that.
I like ex VW CEO Diess as well. Someone will snap him up.

In business, you grow or you go. Every product has a lifecycle.

 

[javacontour]

How ironic would that be considering the big 3 was fighting so hard against the direct to consumer model.

More likely the other way around, but not for a looong time, maybe 20 years until heavy trucks can reliably and cost effectively go electrics.

I'm not an accountant but I've heard having separate divisions helps with tax loss harvesting where if one performs poorly, you can take credit for losses in the higher performing division, allowing you to save taxes. I probably didn't explain that correctly but I'm sure there are many financial benefits.

Are they fighting it because they don't like it, or fighting it because they are locked into it with a dealer network and don't want to compete against new entrants who are not bound by dealership franchise agreements.
I suspect many automakers would love to get out of the dealership model if they thought they could void the current contracts.

 

[JeffKeryk]

Are they fighting it because they don't like it, or fighting it because they are locked into it with a dealer network and don't want to compete against new entrants who are not bound by dealership franchise agreements.
I suspect many automakers would love to get out of the dealership model if they thought they could void the current contracts.

This would immeadiately increase profit margins. Immeadiately.

 

[LowMilesLesabre]

Well, they are already doing interiors better than Tesla, so there's that.

As I pointed out in the BMW EV thread, BMW is currently grappling with the issue of everybody who wants a BMW likely already having one, so they have a fight on their hands trying to convert other brand buyers or encouraging existing buyers to upgrade. This is the position that most major brands are in. That's not an issue Tesla has yet, they are still in growth and expansion mode but at some point market saturation for those who desire one will put them in the same place that all the other marques are in right now. I have no idea when that will happen, but it is inevitable.

I think OVERKILL is onto something here. Tesla was (and currently sort of still is) the MAIN game in town if not the only. They are making lots of hay while the sun shines, but do not count out the old "Big 3" or the rest of the world's legacy car makers. For all of their sins and screwups (too many to log here), traditional car makers DO have lots of infrastructure, lots of access to capital, folks who research future trends and demographics AND over a century of understanding how complex car making is. Large corporations (especially those publicly held) never move super fast, but once they do, watch out! It's sort of like how the car market in N. America was after WW II ended. There was so much pent up demand for new cars, literally all brands could sell every car they could produce. But once the market stabilized, it was not long before we sadly lost many of the "Independent" or non Big 3 car makers (ergo Studebaker, Packard, Kaiser, etc). I think Tesla has had a great run and likely will continue for a while, but hard competition for the EV car consumer is just now warming up. Its going to get tougher to sell cars to folks just because they are EV's because EV's will be much more the norm with at least one car per household as people move into a transition period where they will own at least one ICE and one EV given the current charging/range limits of EVs. The transition will also buy some time as grid infrastructure and battery tech need that time to evolve as well. Will Tesla survive? Meh!, maybe, or perhaps its owner will grow bored and sell it? Or merge it? The possibilities are endless, as they say!