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Ford’s EV Goals Shift as Adoption Pace Changes Over Time
Ford has revised its electric vehicle (EV) production targets due a change in adoption rates. The company now aims to manufacture 600,000 EVs per year by 2024, a delay from the initial goal of reaching this figure by the end of 2023.
The automaker had previously set a target of producing more than 2 million EVs per year by the end of 2026. However, the company now states that it is uncertain when this volume will be achieved.
Despite the slower pace of EV adoption, Ford’s CFO John Lawler reassures that the transition to EVs is still underway, albeit at a slower pace than the industry expected.
Lawler also emphasized that Ford’s EV spending plan and its profitability goal for its electric vehicle unit remain unchanged. The company is still targeting an 8% operating margin for its EV business and has no plans to reduce its capital spending on the vehicles.
Ford CEO Jim Farley sees the slower ramp-up of EV production as a potential advantage for the company. He believes that the slower pace of EV adoption could benefit early movers like Ford, which already has successful first-generation EVs like the F-150 Lightning and Mustang Mach-E.
Farley emphasized that the shift to EVs is underway and will be volatile. He believes that being able to guide customers through and adapt to the pace of adoption are significant advantages for Ford.
Ford’s Model e division, which focuses on electric vehicles (EVs), saw a significant increase in sales and revenue in Q2 2023, but also experienced a widening of losses.
The company sold approximately 34,000 EVs from April to June, nearly tripling the sales from the first quarter, which stood at 12,000 units. Revenue from Ford Model e sales rose from about $700 million in Q1 to $1.8 billion in Q2.
Despite Ford’s overall profitability in the second quarter, the Model e unit posted an operating loss of $1.1 billion. The company now predicts a loss of $4.5 billion from its Ford Model e division in 2023, up from the previously estimated loss of $3 billion.
Ford faced downtime at its plant in Mexico, where the Mustang Mach-E is produced, leading to a slip in EV sales in the second quarter. Consequently, Mach-E sales are down 20% year-to-date. However, sales of Ford’s electric truck more than doubled to 4,466 in Q2. Ford has completed the capacity expansion for the Mustang Mach-E, suggesting sales should start to pick back up in the second half of the year.
The company also announced that it will offer LFP batteries in the Mustang Mach-E and the Lightning in 2024, which will help lower costs. Ford will be the first OEM with an LFP plant in North America.
The company has increased its full-year guidance for adjusted operating profits to between $11 billion and $12 billion, up from the previous range of $9 billion to $11 billion. This increase is attributed to improvements in the supply chain, higher volumes, new Super Duty trucks, and lower commodity costs.
Tesla’s ‘Model T Moment’: Ford CEO’s Take on the EV Market
Ford CEO Jim Farley compared Tesla’s current situation to Ford’s early days with the Model T. He stated that Tesla’s ongoing price war could be a challenging moment for the EV market leader.
Farley believes that Tesla’s heavy discounting to stimulate demand is a “sugar high” that continues to deteriorate the elasticity. He added that as prices are cut, fewer people are signing up, leading to the commoditization of the product.
Tesla has been achieving record production and delivery numbers in recent quarters. However, the company is also facing shrinking market share and falling profit margin.
Farley distanced Ford from Tesla by highlighting his plans to electrify commercial vehicles, larger, three-row crossovers, pickup trucks, and high-performance vehicles. He stated, “We don’t want to make commodity products. We want to participate in the part of the market where Ford knows the customer really well and we can innovate on their behalf for things that they don’t know they need.”
Despite the competition with Tesla, Farley admitted that Tesla remains his biggest all-electric competition, along with major Chinese auto players like BYD and Geely.
Farley emphasized the need for vertical integration in the age of electrification and reducing the industry’s dependence on China’s battery supply chain. He said, “We now pretty much vertically integrate all the raw material purchases. We’re going to the mine and buying the raw materials and then arranging for the processing — all the way to our battery plants, that’s all new.”
The ultimate goal for Ford is to produce more affordable EVs that are not just generic but innovative and cater to the needs of the customers.
The Emergence of the US ‘Battery Belt’: Battery Cell Production to Skyrocket by 2030
The US government has enacted the Bipartisan Infrastructure Law and the Inflation Reduction Act (IRA) to boost electric vehicle (EV) sales and reduce dependency on China’s EV battery supply chain.
A “battery belt” is expected to form around traditional automotive industry clusters in the US. By 2030, the country’s battery cell production capacity is projected to exceed 900 GWh, sufficient to power about 12 million electric passenger vehicles, if the average pack size was an arbitray 75kWh.
In 2022, the US only contributed 6% to the global battery cell production capacity, and its share in mineral refining and processing was around 1%. Without a local battery supply chain and expanded production capacity, the US risks heavy reliance on overseas, particularly Chinese, battery supply.
The IRA provides tax credits for car buyers purchasing EVs produced or assembled in North America. It also extends tax incentives to battery companies establishing manufacturing facilities in the US.
Since the IRA was passed, investment in the US automotive battery and EV sector has surged to $60.2 billion. Almost 90% of this investment is directed towards battery production.
Seven states in the US are expected to achieve annual battery production capacities exceeding 50 GWh. Notably, traditional motor industry hubs connecting Michigan and Georgia are forming a burgeoning EV battery belt.
Within this battery belt, several battery plants can be found, such as Ford’s BlueOval battery park, operating as a joint venture with SK On, General Motors and LG Energy Solution’s formed Ultium Cells, and Stellantis expanded StarPlus Energy joint venture with Samsung SDI. The three major South Korean battery manufacturers have also established their respective production lines within this battery belt.
UK’s Electrified Vehicle Production Soars to New Heights in First Half of 2023
UK car production rose by 11.7% in the first half of the year to 450,168 units, marking the best first half since 2021.
Production of hybrid electric (HEV), plug-in hybrid (PHEV), and battery electric vehicles (BEVs) increased by 71.6% from January to June, reaching a record total of 170,231 units. This represents more than a third (37.8%) of all cars produced so far this year.
The European Union (EU) remains the UK’s largest export market.
Sunwoda Sets Sights on Hungary for New EV Battery Plant
Chinese battery cell manufacturer Sunwoda has announced plans to construct a factory for electric vehicle batteries in Hungary. The company intends to invest around 250 million euros in the plant.
The Hungarian investment promotion agency HIPA confirmed the location of the Sunwoda plant in Nyíregyháza, northeastern Hungary. The factory is expected to be operational by the end of 2025.
Details about the planned production capacity have not been disclosed yet. However, Sunwoda will raise about one-third of the sum from its own funds, with the remaining amount covered by a bank loan. The total investment includes the purchase of land, construction, and procurement of equipment.
Sunwoda has not revealed the intended customers for battery cells from the Hungary plant. The company stated that its activities in Europe aim to better serve international customers, expand its foreign business, and increase its global market share.
If Sunwoda settles in Nyíregyháza, it will join a growing list of Chinese battery companies investing in Hungary, including CATL, Eve Energy, Huayou Cobalt, and BYD. Other international electric vehicle industry players, such as BMW, EcoPro BM, Mercedes, and Audi, also have investments in Hungary.
In China, Sunwoda’s customers include VW’s new partners Xpeng, Mercedes, and GAC. Dacia also relies on Sunwoda cells in the Spring electric car built in China.
Volkswagen Commercial Vehicles Hits New Record with BEV Sales in Q2 2023
Volkswagen Commercial Vehicles (VWCV), a division of the Volkswagen Group, reported a 41% increase in global vehicle sales during Q2 2023, reaching 101,500 units. The total volume for the first half of the year was 198,700 units.
The company’s all-electric vehicle sales have seen a significant boost since the launch of the MEB-based Volkswagen ID. Buzz model in Europe last year. In Q2, VWCV’s all-electric vehicle sales reached approximately 6,900 units
The Volkswagen ID. Buzz is available in two main versions in Europe: the ID. Buzz Pro (passenger version) and the ID. Buzz Cargo (cargo van version), both equipped with an 82-kilowatt-hour (kWh) battery. A long wheelbase version with a larger, 91-kWh battery pack is expected to be available in North America in Q3 2024.
During the first half of the year, VWCV sold over 12,000 all-electric vehicles, marking a significant increase year-over-year and accounting for more than six percent of the total volume.
Elon Musk’s Disapproval: A Top Reason for Tesla Owners Switching Brands, Survey Reveals
A new survey of 5,000 Tesla Model 3 owners reveals that disapproval of Elon Musk is the top reason for selling their electric vehicles and choosing another brand.
Since Musk acquired Twitter, he has been more vocal about his political and social views and has shared controversial conspiracy theories. This has led to a shift in perception about Musk, particularly among people on the left side of the American political spectrum.
Despite concerns about his behavior negatively affecting Tesla, Musk has dismissed these, citing his increasing Twitter follower count as a measure of his popularity.
Bloomberg conducted a comprehensive survey of 5,000 Tesla Model 3 customers, with a significant focus on Musk. Among Model 3 owners who sold or replaced their cars for a vehicle from another brand, “disapproval of Elon Musk” was the top reason.
However, it’s important to note that the survey also found that 87% of Model 3 owners are considering a Tesla for their next vehicle. This means a relatively small percentage of people are actually moving away from Tesla overall, and only about one in five of those people are doing it because of Musk.
The survey results were largely positive for the Model 3, with most owners expressing satisfaction with their purchase and the performance of their cars.
While Musk’s increased political activity is having a negative impact, it’s minimal compared to the 87% of Model 3 owners still considering a Tesla for their next vehicle. Only 2.7% of Tesla buyers are moving away because of Musk, according to this survey. However, in Tesla’s world, that still equates to 50,000 vehicles per year or a few billion dollars.
Panasonic, Tesla’s Partner, Contemplates Supplying EV Batteries to Subaru
Panasonic Holdings, a key supplier of electric vehicle (EV) batteries to Tesla, is considering providing batteries to Subaru. Both Japanese companies are expected to announce their plans to seek a supply agreement on EV batteries soon.
This potential deal follows a similar announcement made by Panasonic with Mazda Motor in June, with plans to start shipments in the latter half of the decade.
Panasonic is aiming to expand its global market share in the face of growing competition from Chinese and South Korean companies. The company currently supplies almost all of its EV batteries to Tesla.
Panasonic’s new 4680 lithium-ion battery cells, which are set to ship in 2024, offer roughly five times the capacity of the earlier 2170 cells.
Panasonic plans to expand production capacity, mainly in North America, where it operates a battery plant with Tesla in Nevada and is building another facility in Kansas. A decision on building a third facility, in either the U.S. or Canada, will be made by the end of the fiscal year in March 2024.
The 2026 Mazda MX-5 Miata: An Electrified Future Awaits
Mazda has confirmed that the next-generation 2026 MX-5 Miata will be electrified. However, the company has not specified the form of electrification, whether it will be a fully electric vehicle (EV), hybrid, or plug-in hybrid.
The entire Mazda lineup is expected to go at least partially electric by 2030. This means that the next-gen Miata, if it is to survive past 2030, needs to take this necessary step in its evolution.
The Mazda Miata has a long-standing reputation as a fun, affordable roadster with excellent driving dynamics. An electrified model would ensure its viability well into the future.
Mazda is likely to introduce a hybrid or plug-in hybrid Miata before developing an all-electric variant.
Mazda is working with Rohm Co. to develop electric powertrains and has signed an agreement with Envision AESC to develop batteries. These contracts could impact the next-generation Miata, but a hybrid version of the roadster seems more likely.
The small size of the Miata could make it challenging to package a battery with sufficient range. A heavy battery pack would negatively impact performance, and pure EV hardware would likely result in a significant price increase.
Are Electric Cars Still Cheaper to Run Than Petrol and Diesel?
Even amidst the ongoing energy crisis, recharging an electric vehicle (EV) is, on average, still significantly cheaper than refuelling a petrol or diesel car. However, the cost difference varies from one country to another.
A Transport & Environment (T&E) analysis of household electricity prices in EU capitals and weekly petrol and diesel prices shows that driving 100 kilometers with an average electric car in September 2022 cost about €6.50 if the car was charged at home. Driving the same distance with a petrol car was on average 80% more expensive, and with a diesel, 50% more expensive.
Meanwhile, drivers saved up to 117% by recharging instead of refuelling in Spain and a staggering 170% by plugging in instead of filling up in Poland.
The price hike Europeans have to take into consideration remains due to the continent’s overreliance on fossil fuels in general and Russian gas in particular. The best way out of this would be a massive increase in renewable energy sources. This would not only bring down electricity prices in the medium and long term but is also the only real way Europe can secure its energy supply in an increasingly unpredictable geopolitical environment.
Hyundai & Seoul University Open Battery Centre
Hyundai Motor Group has opened a joint battery research centre with Seoul National University (SNU) on the university’s main campus in Seoul. The collaboration aims to create the basis for research and development of novel battery technologies.
The focus of the research will be on next-generation batteries that can significantly increase the range of electric vehicles and shorten charging times. Technologies for monitoring battery status and innovative process technologies will also be explored.
Hyundai plans to conduct 22 joint research projects in four areas, including lithium metal batteries, solid-state batteries, battery management systems (BMS), and battery process technology. Of these projects, 14 deal with lithium metal and solid-state batteries.
PHIL ROBERTS / ELECTRIC FUTURE
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