Posted on 02/22/2024 4:53:08 AM PST by bert
Ford CEO Jim Farley and GM CEO Mary Barra said they are open to collaborating with automakers on EV tech to compete with China
The CEOs of leading U.S. automakers Ford and GM on Thursday signaled they are open to considering partnerships to lower the cost of electric vehicle technology to compete with low-cost Chinese EVs looking to the U.S. and European markets.
"If there’s ways that we can partner with others, especially on technologies that are not consumer-facing, and be more efficient with R&D as well as capital, we’re all in," GM CEO Mary Barra told investors at a conference sponsored by Wolfe Research.
Ford CEO Jim Farley also opened the door to collaborating with other automakers on cutting EV battery costs during a separate presentation at the conference Thursday.
The Detroit companies and other Western automakers are facing increasing competition from BYD and low-cost Chinese EV makers that are stepping up their exports of vehicles to Europe, Latin America and Southeast Asia.
FORD’S PROFITS GETTING EATEN UP BY EVS
BYD is weighing the construction of an assembly plant in Mexico that could serve as a platform to ship EVs to the U.S., according to a report by Nikkei earlier this week.
"If you cannot compete fair and square with the Chinese around the world, then 20% to 30% of your revenue is at risk" over the next several years, Farley said.
In its latest earnings report, Ford projected a loss of $5 billion to $5.5 billion on its EV division this year. The company launched a "skunk works" team separate from its main engineering unit that is focused on designing a small, low-cost EV that could compete with BYD’s Seagull model.
Ford is also reevaluating its battery strategy as it looks to make its EV offerings more economical.
"We can start having a competitive battery situation. We can go to common cylindrical cells that could add a lot of leverage to our purchasing capability," Farley said. "Maybe we should do (this) with another OEM (automaker)."
Farley said BYD can produce its small Seagull EV for $9,000 to $11,000. Wolfe Research analyst Rod Lache said he estimates Chinese production costs are 30% lower than Western automakers’ costs.
"Last year, 25% of all vehicles sold in Mexico were sourced in China. The world is changing," Farley said.
FORD CONSIDERS AXING CAR FEATURE THAT COULD SAVE COMPANY MILLIONS PER YEAR
A sign sits outside of Fords Chicago Assembly Plant Ford is projecting a loss of $5 billion to $5.5 billion on its EV division this year. (Scott Olson/Getty Images / Getty Images)
Farley indicated Ford’s goal for a new EV is to make it profitable within the first year, saying he told the company’s engineers, "You have to make money in the first 12 months. If you can’t make money, we aren’t launching the car."
Barra said GM is already well-positioned to begin breaking even on its North American EVs during the second half of this year if it can reach an annualized production rate of 200,000 to 300,000 vehicles and continue to benefit from federal EV subsidies under the Inflation Reduction Act.
BYD vehicles on display in Jakarta, Indonesia China's BYD is shipping more EVs to Europe and is considering ways to enter the U.S. market. (REUTERS/Willy Kurniawan / Reuters Photos)
GM missed its 2023 North American EV production targets in part because of problems manufacturing battery modules.
"I own that," Barra said.
She said GM is now on track to overcome those problems as well as fix software glitches that impacted the launch of the Chevrolet Blazer EV this year.
Barra said that, in China, GM’s brands will focus on premium and higher-priced segments as Chinese automakers focus on mainstream market segments.
Both Barra and Farley know their days in China are over. GM in recent years depended on China for all profits. GM made no profit on vehicle sales of any model in the USA.
Both Ford and GM grew to greatness by absorption of smaller companies. They are now apparently seeing corporate catastrophic failure as a real and inevitable possibility. Merging is the salvation and EV collaberation is the pathway
1 + 1 = 0 in this case.
Even if they merged they could not withstand a frontal assault by China. The Unions would not budge.
GM sought to merge with Ford in 2009 but they were turned down. It wouldn’t have made any difference.................
Both companies have too many old men lacking vision
“”If there’s ways that we can partner with others, especially on technologies that are not consumer-facing, and be more efficient with R&D as well as capital, we’re all in,” GM CEO Mary Barra told investors “
It sounds so well-meaning, but shouldn’t common sense at a default level transcend any “new normal(s)” or is this supposed to be some kind of new global industrial “common sense”?
Applying “the lowest common denominator” to this subject yields three inescapable facts and they are:
1. Current EV/lithium batteries are too heavy.
2. Current EV/lithium batteries are explosive.
3. Current EV/lithium batteries are too expensive.
Given the foregoing 3 facts, Ford and GM should forget, for now, manufacturing even 1 more Tesla type EV. My daughter and her husband have one and realize they can’t give it away.
Western auto manufacturers are in trouble mainly because of restrictions placed upon them by western governments. China’s manufacturing is flourishing specifically because there are none of those restrictions, and the wages are borderline slavery-level.
Tariffs and other importation taxes combined with firm enforcement of vehicular safety standards are the only way to level this playing field, and incidentally the correct and constitutionally mandated method of raising money to operate the fedgov.
We all know that this will NEVER happen, though.
Smart as a brick...
“My daughter and her husband have one and realize they can’t give it away.”
Regarding resale value, let’s say a 10-year EV needs a new battery for $14,000. Is it worth putting that much money into a 10 year old car?
4. Depreciation
How do they plan on competing on labor cost $29, US opposite $4.20 to $19.
Can you say kowtow, boys and girls?
I knew you could!
...and Toonces can drive a car.
People need to realize something...
Environmental policy isn’t about saving the planet any more than CoupFlu policy is about protecting public health.
What this is all really about is impovershing the middle class.
Understand that, and the actions of Deep States all over the globe make perfect sense.
This isn’t lunacy and/or abject stupidity.
It’s unadulterated evil.
It’s all about control over everything you do.
"there are none so blind as those who will not see"
Then there are those so brain-washed with stupidity they don't want to see...
I think they have made a good plan. Basically, he uses it “solely” to commute to work. He’s a lawyer and his office is about 2 miles away on typical city streets NOT expressways. For that, it does a good job, so far.
My daughter, largely because of the news articles I supply her via email, is scared to even get in it. So, he is forced to use it as his car and she uses the Lexus SUV.
Now, I’m working on her to make him put the “bomb” out in the street at night instead of in the garage under their bedroom
To your point about 10 years and $14,000.00. They figure if he can use it 6 years (all short trips) and the batteries don’t have to be replaced, they possibly could break even. That’s a stretch though and they know it. It was just a BIG mistake.
lol, correct but I would call it “accelerated” depreciation. It’s worth no where near what they paid for it a year ago.
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