The article does clarify that these are losses at the division level, not necessarily a loss in terms of direct costs being greater than revenue from unit sales. Basically, the overhead of capital...
The article does clarify that these are losses at the division level, not necessarily a loss in terms of direct costs being greater than revenue from unit sales. Basically, the overhead of capital and plant, future R&D, etc, significantly exceeds the contribution margins for each vehicle.
They need to sell more in order to defray these costs across more units.
One could also assume that the company knew this was a possibility while they were ramping up production and sales. If people aren't buying, then that division wouldn't be profitable. The whole...
One could also assume that the company knew this was a possibility while they were ramping up production and sales. If people aren't buying, then that division wouldn't be profitable. The whole point is that until they sell more, in won't offset the investment.
Lowering prices is one way to incentivize sales, but I don't think most people really understand the benefit of EVs yet. It's changing, but slowly and in an economy where loans are harder for people to afford.
I think Ford is willing to press on with short term losses for R&D because they can guarantee that the market will need millions of EVs in the next 5-10 years. California and the EPA both...
I think Ford is willing to press on with short term losses for R&D because they can guarantee that the market will need millions of EVs in the next 5-10 years. California and the EPA both implemented rules that will necessitate EV offerings over ICE offerings in the next decade. Ford has to go overboard on R&D today, because they are trying to make EVs that are on par with or surpass the functionality and pricing of the ICE cars available today.
They've hit a problem with the Lightning in that its great for what a lot of people use trucks for, which is nothing, they just like driving a truck. But for those who actually use a truck for...
They've hit a problem with the Lightning in that its great for what a lot of people use trucks for, which is nothing, they just like driving a truck. But for those who actually use a truck for pulling a trailer, its REALLY not good at that. Real world tests show that its only got about a 90 mile range while pulling a holiday trailer or any heavy trailer. So if you cant recharge at your campsite, you can go 45 miles from home. Not impressive enough to buy an expensive EV and ditch a gas/diesel for that little range.
You got 2 comments as to why in terms of engine efficiency, but I'll also provide another point of view as a truck owner. Towing a trailer still does have a pretty large impact on mileage/range....
You got 2 comments as to why in terms of engine efficiency, but I'll also provide another point of view as a truck owner. Towing a trailer still does have a pretty large impact on mileage/range. My F-250 can get about 20mpg on the highway empty, but when towing, I average 12-14mpg. But, my range on a 26 gallon tank is about 500 miles to begin with instead of the 300ish for an EV truck. Additionally, it takes me about 5 minutes to fill up at one of the hundreds of gas stations that I'll pass on my trip instead of 30 minutes at one of the few EV stations along my route that may or may not support my vehicle / be available for me to use / actually be operational.
The lack of charging infra is tied with price for #1 as to why my next truck is also unlikely to be an EV. It needs to make financial sense (it doesn't), and it needs to not be a pain in the ass (it currently is for the way that I use it).
In addition, so far most EV charging stations are not pull throughs. So if you're pulling you may have to unhook your trailer depending on where your charge port is located. No one wants to do...
In addition, so far most EV charging stations are not pull throughs. So if you're pulling you may have to unhook your trailer depending on where your charge port is located. No one wants to do that on a vacation trip in particular, especially with cranky kids who are already asking 'are we there yet?' lol.
EVs are much more efficient than gas cars. Of the energy contained in gasoline only about 12% to 30% actually goes towards moving the vehicle. An EV is about 60% to 73% efficient. When towing with...
When towing with a gas car, even if the extra weight and drag from wind makes the car use more energy, the extra energy wasted is so small compared to the rest of the inefficiencies that you barely notice it. In an EV where the car is designed around using energy efficiently, the energy loss from towing a trailer drastically reduces the energy efficiency of the system.
Towing has the same energy expenditure impact on both types of vehicles, but since EVs waste so little energy, the extra energy requirements makes a bigger impact to range.
One of the big reasons is that they're much more susceptible to weight and/or aerodynamic drag because without those encumbrances, they're very efficient. While an ICE vehicle only converts about...
One of the big reasons is that they're much more susceptible to weight and/or aerodynamic drag because without those encumbrances, they're very efficient. While an ICE vehicle only converts about 30% of gasoline's energy into motion, the rest is heat and friction loss, so adding more weight/drag to already inefficient vehicle doesnt affect it that much - its already inefficient. But adding weight/drag to an EV drops its energy efficiency substantially, so the loss of range isn't just 15%, it can be more like 50% or more.
Really if you can only afford one car, a gas/electric hybrid makes the most sense, but EVangelists seem hell bent on Battery Electric Vehicles or nothing, as if there is only ONE right way to move away from ICE vehicles. Currently there's not a lot of selection for hybrid trucks, especially not one's big enough for true hauling capability.
Hybrids actually are less work to maintain than pure gas cars. The electric motor takes part of the load off the engine, so the oil lasts longer. The electric motor also takes away part of the...
Hybrids actually are less work to maintain than pure gas cars. The electric motor takes part of the load off the engine, so the oil lasts longer. The electric motor also takes away part of the load off the brakes, so your brake pads last longer.
The actual hybrid components are definitely expensive if they break, but car manufacturers include pretty generous battery and powertrain warranties to cover that. Having a hybrid car out of warranty can be riskier, but a hybrid car with a warranty will be easier to maintain than an equivalent normal gas car.
Lowering prices might help increase the number of units sold, but they'll obviously still need to make enough profit on each unit to recoup their investment costs. It's pretty obvious that they...
Lowering prices might help increase the number of units sold, but they'll obviously still need to make enough profit on each unit to recoup their investment costs. It's pretty obvious that they expected sales to be better given how much they've had to scale back production due to softening demand.
Currently, cost is only one of the downsides of EV ownership. This doesn't help them either, given that many people currently don't want to own an EV for reasons beyond cost.
It could also be learning curve like for airframes, where you know your cost to produce to build, factoring all overhead, is more than you sell each unit for, but you know costs will go down with...
It could also be learning curve like for airframes, where you know your cost to produce to build, factoring all overhead, is more than you sell each unit for, but you know costs will go down with assembly efficiencies, scale efficiencies, and more units sold.
What I'm dubious about is the CEOs claim that their next model will cover its own costs.
For the EV market I see this as a net positive in the long-term. Affordability is one the biggest reasons folks don't consider an EV when they need to buy a car.
And its revenue plunged 84% to about $100 million, which Ford attributed mostly to price cuts for EVs across the industry.
For the EV market I see this as a net positive in the long-term. Affordability is one the biggest reasons folks don't consider an EV when they need to buy a car.
The article does clarify that these are losses at the division level, not necessarily a loss in terms of direct costs being greater than revenue from unit sales. Basically, the overhead of capital and plant, future R&D, etc, significantly exceeds the contribution margins for each vehicle.
They need to sell more in order to defray these costs across more units.
One could also assume that the company knew this was a possibility while they were ramping up production and sales. If people aren't buying, then that division wouldn't be profitable. The whole point is that until they sell more, in won't offset the investment.
Lowering prices is one way to incentivize sales, but I don't think most people really understand the benefit of EVs yet. It's changing, but slowly and in an economy where loans are harder for people to afford.
I think Ford is willing to press on with short term losses for R&D because they can guarantee that the market will need millions of EVs in the next 5-10 years. California and the EPA both implemented rules that will necessitate EV offerings over ICE offerings in the next decade. Ford has to go overboard on R&D today, because they are trying to make EVs that are on par with or surpass the functionality and pricing of the ICE cars available today.
They've hit a problem with the Lightning in that its great for what a lot of people use trucks for, which is nothing, they just like driving a truck. But for those who actually use a truck for pulling a trailer, its REALLY not good at that. Real world tests show that its only got about a 90 mile range while pulling a holiday trailer or any heavy trailer. So if you cant recharge at your campsite, you can go 45 miles from home. Not impressive enough to buy an expensive EV and ditch a gas/diesel for that little range.
Why is towing so much harder for EVs than ICEs?
You got 2 comments as to why in terms of engine efficiency, but I'll also provide another point of view as a truck owner. Towing a trailer still does have a pretty large impact on mileage/range. My F-250 can get about 20mpg on the highway empty, but when towing, I average 12-14mpg. But, my range on a 26 gallon tank is about 500 miles to begin with instead of the 300ish for an EV truck. Additionally, it takes me about 5 minutes to fill up at one of the hundreds of gas stations that I'll pass on my trip instead of 30 minutes at one of the few EV stations along my route that may or may not support my vehicle / be available for me to use / actually be operational.
The lack of charging infra is tied with price for #1 as to why my next truck is also unlikely to be an EV. It needs to make financial sense (it doesn't), and it needs to not be a pain in the ass (it currently is for the way that I use it).
In addition, so far most EV charging stations are not pull throughs. So if you're pulling you may have to unhook your trailer depending on where your charge port is located. No one wants to do that on a vacation trip in particular, especially with cranky kids who are already asking 'are we there yet?' lol.
This video is also a good explanation about why EVs have trouble with towing.
EVs are much more efficient than gas cars. Of the energy contained in gasoline only about 12% to 30% actually goes towards moving the vehicle. An EV is about 60% to 73% efficient.
When towing with a gas car, even if the extra weight and drag from wind makes the car use more energy, the extra energy wasted is so small compared to the rest of the inefficiencies that you barely notice it. In an EV where the car is designed around using energy efficiently, the energy loss from towing a trailer drastically reduces the energy efficiency of the system.
Towing has the same energy expenditure impact on both types of vehicles, but since EVs waste so little energy, the extra energy requirements makes a bigger impact to range.
One of the big reasons is that they're much more susceptible to weight and/or aerodynamic drag because without those encumbrances, they're very efficient. While an ICE vehicle only converts about 30% of gasoline's energy into motion, the rest is heat and friction loss, so adding more weight/drag to already inefficient vehicle doesnt affect it that much - its already inefficient. But adding weight/drag to an EV drops its energy efficiency substantially, so the loss of range isn't just 15%, it can be more like 50% or more.
Really if you can only afford one car, a gas/electric hybrid makes the most sense, but EVangelists seem hell bent on Battery Electric Vehicles or nothing, as if there is only ONE right way to move away from ICE vehicles. Currently there's not a lot of selection for hybrid trucks, especially not one's big enough for true hauling capability.
One issue with hybrids is that you’ve now got twice the number of things to maintain and that could break.
Hybrids actually are less work to maintain than pure gas cars. The electric motor takes part of the load off the engine, so the oil lasts longer. The electric motor also takes away part of the load off the brakes, so your brake pads last longer.
The actual hybrid components are definitely expensive if they break, but car manufacturers include pretty generous battery and powertrain warranties to cover that. Having a hybrid car out of warranty can be riskier, but a hybrid car with a warranty will be easier to maintain than an equivalent normal gas car.
Lowering prices might help increase the number of units sold, but they'll obviously still need to make enough profit on each unit to recoup their investment costs. It's pretty obvious that they expected sales to be better given how much they've had to scale back production due to softening demand.
Currently, cost is only one of the downsides of EV ownership. This doesn't help them either, given that many people currently don't want to own an EV for reasons beyond cost.
It could also be learning curve like for airframes, where you know your cost to produce to build, factoring all overhead, is more than you sell each unit for, but you know costs will go down with assembly efficiencies, scale efficiencies, and more units sold.
What I'm dubious about is the CEOs claim that their next model will cover its own costs.
For the EV market I see this as a net positive in the long-term. Affordability is one the biggest reasons folks don't consider an EV when they need to buy a car.