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Runtime: 9:43
0:00 Ford’s Business Unit Profit Walk
1:12 Why Ford Model E Is So Deep in The Red
2:20 Ford Says BlueCruise Spanking GM Super Cruise
3:56 Zeekr Unveils Sliding Center Screen
4:42 Lithium Prices Cratering in China
5:27 CATL Skeptical of Solid-State Batteries
7:07 VW Group Could Bring Cupra To North America
7:50 VW Pledges 15 Years Support for Android Auto
8:16 Hyundai-Kia Tow Hitch Harness A Fire Risk
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FORD’S BUSINESS UNIT PROFIT WALK
As we reported yesterday, Ford is changing how it reports its financial earnings. Instead of doing it on a regional basis, like North America, Europe or China, it will report by three business units: Ford Blue, which is its ICE business, Ford Model e, which is its BEV business and Ford Pro, which is its commercial trucks and vans. And now we’ve got some pro-forma ideas of how those units did over the last couple of years. In 2021, Ford Blue made a $3.3 billion profit. Ford Pro made $2.7 billion. And Ford Model e lost $900 million. Last year Ford Blue made $6.6 billion, Ford Pro made $3.2 billion. And Ford Model e lost $2.1 billion. This year Ford Blue is expected to make $7 billion. Ford Pro should come in around $6 billion and Model e will lose $3 billion.
| FORD BUSINESS UNIT EBIT PROFIT | |||
|---|---|---|---|
| 2021 | 2022 | 2023 | |
| Ford Blue | $3.3 B | $6.6 B | $7 B |
| Ford Pro | $2.7 B | $3.2 B | $6 B |
| Ford Model e | -$900 M | -$2.1 B | -$3 B |
WHY FORD MODEL E IS SO DEEP IN THE RED
Obviously, those are not good numbers for Model e, but here are a couple of things to keep in mind. Ford is investing heavily in EVs right now, especially with the giant manufacturing complex in Tennessee that it calls Blue Oval City. That plant will not even come on line until 2025, so the costs are piling up before it even makes its first electric pickup truck. By the way, internally they refer to that truck as T3. Ford says that by the end of this year its EVs will be close to making a contribution margin, which means they take all the revenue generated by their EVs and subtract all the variable costs like materials, warranty, and freight. Whatever money is left over is the contribution margin. By 2026 Ford says it will be building 2 million EVs a year and that Model e will generate an 8% EBIT margin. And because it will now be reporting all these numbers publicly we’re going to know every quarter if it’s making good on its promise.
FORD SAYS BLUECRUISE SPANKING GM SUPER CRUISE
OK, let’s keep the spotlight on Ford for the moment. It claims it’s kicking GM’s butt when it comes to selling hands-free driving. We’re talking Ford Blue Cruise versus GM Super Cruise. Sammy Omari, the executive director of ADAS at Ford, tells Autoline that last year only 40,000 customers bought GM Super Cruise, while 180,000 customers bought Ford Blue Cruise. He claims that Ford’s system is half the cost of GM’s, and that Ford customers are doing more hands-free driving. We reached out to GM for comment, and while they didn’t dispute Ford’s numbers they pointed out that GM will have SuperCruise available on 22 models globally by the end of the year. All I can say is that you’ve got to love the intense rivalry between these two cross-town competitors. They just love to put a boot in the other guy’s face every chance they get.
ZEEKR UNVEILS SLIDING CENTER SCREEN
It wasn’t that long ago when automakers used to brag about how many cup holders they had in their cars. Today, it’s all about how big their screens are. Geely’s premium brand Zeekr is showing off a giant 14.6-inch screen in its upcoming model X. It’s mounted on a rail, so it can slide between the driver and front passenger. And it has a plug for a game controller to play video games. The Zeekr X is equipped with a 66-kWh battery, which provides 500 to 560 kilometers or 310 to 348 miles of range, depending if you get the RWD or AWD version. And Zeekr will officially unveil the X next month.
LITHIUM PRICES CRATERING IN CHINA
Lithium prices in China are plummeting. They’re down 34% over the last month and are half of what they cost in November. Lithium is now going for about $17 a pound. Analysts expected prices to come down, but not this fast. And it’s all because sales of EVs in China, while still growing, are not growing nearly as fast as they were before. You know that price war that Tesla kicked off? Well it’s not just with EVs. Now, car companies are cutting the prices of their ICE cars, and that’s luring customers away from electrics. Lithium prices are also falling in the US and Europe, but not nearly as fast as they are in China.
CATL SKEPTICAL OF SOLID-STATE BATTERIES
But if you’re a battery company, what are you going to do? You’re going to keep on making batteries. And CATL announced it’s going into mass production with a new battery chemistry it calls M3P. CATL isn’t saying a lot about these batteries except that they have more energy density than lithium iron phosphate batteries and are cheaper than nickel cobalt ones. It says M3P will deliver a driving range of 430 miles or 700 kilometers, though it didn’t specify the size of the pack or in what kind of vehicle. But if a typical EV has that kind of range it will be a game changer. One other interesting note. Robin Zeng, the CEO of CATL, says they don’t see a technically feasible way to make solid state batteries that are competitive with what it has now. Now, maybe that’s a self-serving comment. But when the biggest battery company in the world says it doesn’t see a way to make solid state batteries viable, we should at least pay attention.
VW GROUP COULD BRING CUPRA TO NORTH AMERICA
The Volkswagen Group might bring yet another brand to North America. It already has VW, Audi, Porsche, Lamborghini, and Bentley, and in 2026 it will launch Scout. And next on the list could be Cupra. That’s the premium brand of Spanish automaker SEAT, which is part of the VW Group. It wants to jump into the North American market by 2030, with electric vehicles based on the VW Group’s next-gen SSP platform. Cupra’s CEO says he believes Americans will love the automaker’s design and performance but they don’t want to launch vehicles just yet because it need to establish the brand in Europe first.
VW PLEDGES 15 YEARS SUPPORT FOR ANDROID AUTO
Android Auto and Apple CarPlay are a great way for drivers to use their smartphones while they drive. But cars last far longer than phones, which means the car’s infotainment system could be wildly out of date in just a few years. That’s why Volkswagen is pledging to support Android Auto for 15 years, which is what it considers the lifetime of a vehicle.
HYUNDAI-KIA TOW HITCH HARNESS A FIRE RISK
We’ve seen automakers have to tell owners to park cars outside because of engine or battery fires. But this is a new one. Hyundai and Kia are telling more than 570,000 SUV and minivan owners to park their vehicles outside and away from structures because the tow hitch harness can catch fire. You heard that right, the tow hitch harness. Apparently, a short circuit can occur if water leaks into the hitch’s circuit board. Poof, it can go up in flames! So, Hyundai and Kia are telling owners to park outside until they can get fixed. This includes the Hyundai Santa Fe, including the hybrid and plug-in hybrid and the Kia Carnival.
But that’s it for today’s report, thanks for watching and have a great weekend.
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Seamus and Sean McElroy cover the latest news in the automotive industry for Autoline Daily.
