Losing $100k per “Sale”

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Ford just announced it is “cutting back” on battery orders for its battery powered devices – i.e., its electric vehicles – because it is costing Ford $100,000 to “sell” each device it makes.

Cutting back?

How about cutting bait?

Ordinarily, that’s what Ford – that’s what any car company – would have done already. It is why Ford stopped trying to sell Edsels, which did actually sell. Just not very well. Ford stopped making Edsels because it wasn’t selling enough of them to make it worth making more of them. Similarly, GM isn’t making Pontiac Azteks – or Pontiacs – anymore, either.

But never before has it cost this much to “sell” a vehicle.

A 2024 Ford F-150 Lightning lists for $54,995 (to make it sound better than $55,000). If Ford loses $100k on each “sale” of this device after recovering the $55k someone paid to buy the device then the true cost of making this device is in the range – so to speak – of $155,000.

Put another way, to make a modest 3 percent profit on this device, Ford would have to price it closer to $160,000 – and that is something more than merely a money-flush. It is what detectives call a clue as to what this is ultimately all about. That being to price almost everyone who cannot afford to spend six figures on a device out of driving.

Reason it out.

Why else would Ford – and all the others – continue to make devices they are well-aware are money flushes? Big corporations are not generally run by stupid people, although there are exceptions to that. But don’t make the mistake of thinking that running a corporation into the ground is stupid when there’s money in it for those doing it. The CEO of Ford, Jim Farley, is paid a sum comparable that paid Mary Barra, who is the head of GM. Both are paid more than $20 million annually – and that buys a lot.

Cooperation, for instance.

Both Ford and GM were co-opted after the near-collapse of each back in 2008-2009. The price they both paid to stave off collapse was their cooperation with the forces that have been at war with everything Henry Ford (and Alfred P. Sloan) set in motion more than a century ago. The industry was not reorganized. It was reconstructed. Kind of like the South – by the North – after the South failed in its bid to separate itself from a “union” that was held together by force rather than affection, let alone consent.

As it remains, today.

VW was reconstructed, too. And it is now very cooperative. The industry as a whole has become extremely cooperative. This turnaround has not been as abrupt nor as obvious as a parking brake 180 performed by pulling up on the brake lever (which almost no politically correct new cars have anymore) so as to lock the rear wheels and then by cranking the steering wheel hard over, so as to get the car to come around and end up facing the opposite direction.

But it amounts to the same thing.

The industry no longer seems much interested in selling vehicles to people who want to buy them and can afford to buy them – the two things that are necessary to sell a vehicle and without losing money on the deal. The industry seems very interested, on the other hand, in complying with whatever fatwas are hurled by the regulatory ayatollahs who control the federal apparat. Superficially, this makes a poltroonish kind of sense – in the sense that poltroons don’t like to make waves.

They love to be seen as  . . . cooperative.

But when cooperation is suicidal then other motives are probably in play. They include not being personally affected by this cooperation; indeed, profiting from it. When you are paid $20 million in one year – or for that matter, $10 million – then you know that it won’t be difficult for you to pay $160,000 for a device. Or, if you prefer, a vehicle such as the brand-new 1960s Mustangs made by small-batch manufacturers that are exempted from all the “safety” and “emissions” regulations that ran the 1960s – and 1970s and 1980s and 1990s and 2000s-and-up – vehicles (and engines) off the road.

Just like those who can afford to fly privately do not have to deal with being groped by low-IQ government goons.

You’ll have no worries – so why would you worry about whether others do?

Maybe the leadership of the big car companies does not think this way consciously. Maybe neither did Marie Antoinette. Who – never having had to worry about missing a meal – could not conceive of anyone else having to worry about missing one.

Isn’t there plenty of cake to go around?

. . .

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43 COMMENTS

  1. It is scientific illiteracy that is responsible for the (limited) “success” of EVs today–until these same scientific illiterates find out about extended charging times and limited range. Basic scientific principles are not taught in schools, being replaced by “touchy-feely” environmentalism, gender-bending grooming and how humans are destroying the planet (yeah, right).
    It is my humble opinion that us boomers are of the last generation who took science and technology seriously, with a hunger to know how and why things work. Us boomers had electrical and mechanical systems that we could work on and improve on ourselves. Basic scientific principles were taught in school and reinforced with hands-on experimentation.
    In today’s climate (and the climate of two previous generations) experimentation on the level of the 1950s and 1960s is seen as “too dangerous”. I can remember the chemistry sets of the day being sold with toxic compounds which could be used for nefarious (and fun) purposes. Such sets are banned today.
    Today’s prime example of the public’s scientific stupidity being pushed by political considerations is that of electric vehicles, most people (even supposedly “educated” types) enthusiastically jumping on the bandwagon despite the major deficiencies and problems these vehicles have.
    Let’s look at the technical side of electric vehicles vs. ICE (internal combustion engine) vehicles. Range is a large factor in the desirability of ICE vehicles vs. today’s electric vehicles. One can fuel up an ICE vehicle in approximately five minutes and be on his way.
    Not so for electric vehicles. Quite often electric vehicle charging stations are few and far between, which contributes to “range anxiety”. For short hops and city driving, electric vehicles can be an ideal solution, but for extended “road trips” forget it.
    Electric vehicle batteries lose power even when the vehicle is not in use. (This is akin to a gasoline vehicle with a leaky gas tank). Add to that, cold weather and the use of accessories (air conditioning, heat, lights, etc) will reduce range considerably. Electric vehicles may be somewhat suitable for a California climate, but will fail in sub-zero Michigan winter snow and ice.
    Batteries can be charged only to 80% of full capacity as overcharging will reduce battery life considerably. “Fast charging” is also detrimental to battery life. It’s all about time and convenience vs. battery life.
    Gasoline and diesel fuel has an large energy content (density) in a small package, something that, in their present stages of development, electrical vehicles cannot achieve.
    Let’s make a comparison…gasoline contains approximately 33.7 kwh per gallon. A gallon of gasoline weighs approximately 6.1 lbs. The typical ICE vehicle can hold about 15 gallons of gasoline with a weight of approximately 90 lbs. total, with a total energy content of approximately 500 kwh.
    High-end electric vehicles have an energy capacity of approximately 120 kwh. This is equal to less than four gallons of gasoline. The typical electric vehicle has a 75 kwh battery pack, equivalent to approximately 2 ½ gallons of gasoline.
    Keep in mind that the battery pack weight is well over 2000 lbs (1 ton) and still has a limited energy capacity compared to gasoline. The typical electric vehicles weighs approximately 2 ½ tons (5000 lbs.), having to haul around a heavy battery pack. This also contributes to “wear and tear” on other automotive systems such as brakes and tires. (Yes, I am aware that regenerative braking exists and is a part of electric vehicle technology).
    From an environmental standpoint, lithium is nasty stuff, reacts with water violently and is much more volatile than gasoline. Electric vehicle accidents are much more hazardous than those of ICE vehicles. Water cannot be used to put out a lithium battery pack fire.
    Yes, gasoline is dangerous, but we have learned to control it and live with it successfully for over 100 years.
    Most of today’s generation do not understand basic scientific principles; hence the enthusiasm for electric vehicles which are “not yet ready for prime-time”. The inability of today’s generation to understand basic scientific and engineering principles is responsible for their gullibility and ignorance.

  2. This article was updated last November. Perhaps it needs updating again. With Ford’s announcement, how will all these EV battery plants under construction and on the drawing board make it into production? It looks like, to use an old phrase about not quite making it, they’ll be cooked in the squat.

  3. ‘Maybe the leadership of the big car companies does not think …’ — eric, selectively quoted

    EeeVee Mary’s Folly:

    ‘Chevrolet Malibu production will end in November as the factory that builds it, the Fairfax Assembly Plant in Kansas City, Kansas, is reconfigured to build a new generation of the Chevrolet Bolt EV.

    ‘With the Malibu’s demise, GM’s Chevrolet brand will sell only trucks, SUVs, and the Corvette in the US. Chevrolet stopped making its Mustang competitor, the Camaro, last year.

    ‘The last generation of the Malibu was first introduced in 2016, making it much older than competitors such as the relatively popular Honda Accord and Toyota Camry.

    ‘The Malibu was introduced in the 1960s as a more luxurious version of the Chevrolet Chevelle, called the Chevelle Malibu. By the 1970s, it had become its own distinct model. The Malibu model line ended production in 1983 but was brought back again in 1997, and has been in production since then.’

    https://www.kcra.com/article/chevy-malibu-ending-production/60749522

    Corvair — dead
    Impala —– dead
    Chevelle — dead
    Monte Carlo — dead
    Camaro —– dead
    Malibu —– dead
    GM —– brain dead

    ‘Maybe that’s all I really am, a lapper of ****, the slavish mouth for some woman’s ****. Eat! And so be it! Maybe the wisest solution for me is to live on all fours! Crawl through life feasting on *****, and leaving the righting of wrongs and the fathering of families to the upright creatures! Who needs monuments erected in his name, when there is this banquet walking the streets?’ — Philip Roth, Portnoy’s Complaint (1969)

  4. The people running corporate america are there to help destroy the nation, and the under-class. They’re doing exactly what they’re supposed to do, and getting rich in the process, as is always the case.

    • Yes but they are stupid. They will end up as chinese slaves together with underclass they despise. Every time countries elites tried to kill upward mobility of lower classes country went to shit.

  5. ‘Call it the Kobayashi Maru economy. By keeping interest rates too low for too long, the FED put itself into a no-win scenario.’ — ReadyKilowatt

    Funny, the Kobayashi Maru dilemma was mentioned by the incoming chief justice of the Arizona Supreme Court, in a chat we had last month on the sidelines of a public meeting. She brought it up in a high school class, she said, in reference to the court’s recent no-win abortion decision — and saw a sea of blank adolescent faces.

    ‘Do any of you get the reference to the Kobayashi Maru?’ she asked the sea of kids. Only the three teachers raised their hands.

    RK is right: despite an extremely stimulative fiscal deficit amounting to 7% of GDP, formerly only seen in the depths of recession, corporations are saying in earnings calls that consumers are cutting back. U of Michigan Consumer Sentiment collapsed in last Friday’s report. Meanwhile, the US fedgov’s debt trap will ratchet interest expense from $1.0 trillion to $1.5 trillion this year, simply from old lower-rate debt rolling into new higher-rate debt.

    Consumers aren’t supposed to fold in an election year (though it happened in 1980, 2000 and 2020). The CHIPS ‘n Sciency Act and the Inflation Reduction Act are blasting out hundreds of billions worth of pork, but the economy just isn’t responding to the defibrillator paddles. Thus Captain Biden’s Kobayashi Maru dilemma: go full WW III on Russia and the Islamic world, or else watch the economy carry on sliding into a humdinger recession and asset price collapse.

    At this late date, with the iceberg already looming over the Titanic’s bow, the choices open to auto execs are: sit on the tilting dining deck as the band plays Nearer My Gold To Thee; or, shove the women and children aside to commandeer a lifeboat. Either way, EeeVee Sunset is nigh.

    Every night when the sun goes down
    Just another lonely boy in an ICE town
    And no more EeeVees runnin’ ’round …

    — Eagles, Tequila Sunrise

  6. Wow, those Mustangs are amazing. $300k for the 68 CobraJet is a tad out of my budget, however.

    So much insanity across so many industries right now. I feel like I’m missing something. I’m old enough to have seen many car companies make retarded business decisions, but I’ve never seen one gleefully commit seppuku.

    • A third possibility is that Mary and Jim drank a whole pitcher of mescaline-laced EeeVee Kool-Aid and, in their molecular fervor, saw a gleaming Xanadu:

      Solid-state batteries, cheap as dirt, rechargeable in five minutes, and with 900 miles of range.

      EeeVees with 40 percent fewer parts than ICE vehicles, cheaper to produce, and superior on every functional metric.

      Like the flying cars they promised us by 1985, Mary and Jim’s solid-state, $25,000 EeeVee fever dream didn’t materialize by 2025 either. Who coulda kno-o-o-o-o-o-w-e-d?

      In Xanadu did Lightning Jim
      An EeeVee pleasure-dome decree:
      Where Fed, the dollar river, ran
      Through caverns measureless to man
      Down to a sunless sea.

      — Samuel Taylor Coleridge, Kubla Khan

      • There might have been affordable EV’s from China, but the Biden thing just closed that door by imposing huge tariffs on any EV’s imported from China. Yet more evidence that it never was about the “climate” but just a means of getting more control of the serfs.

        • Hi Mike,

          It increasingly became obvious that this demented push for “EVs for all” from the Biden Thing was NEVER about the “climate” or “Saaaaaaaaaaaaaaaaaaaaafety” when they ignored the fact that EVs have a FAR GREATER “Carbon footprint” than gas vehicles, plus the fact the Thing has all but ignored spontaneous combustion from the batteries. He might have the same indifferent attitude to that that he did to people paying more and more for groceries in a recent CNN interview.

  7. Ford is the only company reporting this info. They could very easily not report it. The reason they do it is that they are gaslighting you on behalf of the regime. Same as telling you right on the box, “these face diapers don’t stop respiratory illness” yet requiring you to wear one to “stop the spread.” You are to be insulted and injured.

  8. Ironically I’m watching a 23-year old episode of “How it’s Made”. Original air date was March of 2001. The first segment was about a super new Lithium metal polymer battery that would power eeeveees and hybrids alike. Hindsight is 20/20. And a real bitch.

  9. The Bribem thing probably told Ford he’s got their backs, and they fell for it. Ford will make up their loses in volume. If that doesn’t work, they can fall back on the To big to fail thing. The Ford dealer near us is as full as its ever been.

  10. One million Lightning F-150s will have a loss of 100,000,000,000 dollars.

    Then after building them at a 100 billion dollar loss, time for the bailout. On the bright side, Ford can book 55 billion dollars in Lightning sales.

    If they would think about it for a second, don’t build any of them, dot gov can grant Ford 155,000,000,000 dollars and call it a wash.

    If you want to build back better, that is how it can be done.

    If the idiots in charge can spend 1,000,000,000,000 dollars too many in 100 days, then Ford can lose and still profit.

    The lunatics are in charge, the asylum is packed to the rafters.

  11. As I’ve said before elsewhere here, and will say yet again, EVs are political products, not economic products. EVs are only being made because Uncle is making car companies make them and because people want to virtue signal by driving them—not because there is significant demand for them by the car-buying public at large. And those members of the car-buying public who do buy EVs are rich enough, or pretend to be rich enough, to buy them in the first place, live in homes/apartments with charging stations, and/or have second or third vehicles they can drive when driving EVs isn’t possible or practical—and there aren’t many of those.
    Car companies know their political products aren’t sustainable, but they don’t care—on count one, they’re basically throwing chum at the shark of government hoping it will eat them last; and count two, as mentioned, they’re expecting a bailout if things go south—neither of which will happen.

    • How true. All who want one and the fewer still who can afford one, already have one. It’s a saturated market.

      • The fact that government continues to relentlessly push “EVs for all!” despite the problems with them that are increasingly becoming impossible to hide should be a pretty good indication that there’s a larger, more sinister agenda afoot than what is being stated by these “World improvers”. It’s almost like when they were pushing and continue pushing “COVID jabs for all!” despite it becoming impossible to hide the problems with those “vaccines” that Patrick Wood (editor in chief of technocracy dot news) says should be called GMOs instead of vaccines.

  12. I read somewhere that the Chevy Malibu was being retired and the plant would be retooled to make Chevy Bolts. Somewhere there’s a comment I could make about discontinuing a so called midsize car and replacing it with a subcompact which catches on fire occasionally but I’m at a loss on how to express it.

    • Its interesting that we don’t see near as many examples of people falling out as they ‘died suddenly.’ Either big/Pharma has succeeded spectacularly in strong arming the media and white washing the evidence away, or, people just stopped taking the poison at the fever pitch they were lapping it up in 2020-2022.

      Either way it raises doubts in my mind. Was it more about compliance than population reduction? By know we should have seen much higher numbers of dead. Or it could just be like everything else, anything the government touches turns to crap. Killing people being what excites Governments the most, perhaps they really aren’t that good at it.

      • Mostly everyone I know took the Covid “vaccine”. No one has gotten ill, or worse, died. Agree: “By [now] we should have seen much higher numbers of dead.”

        • EVERY person I know who has taken the “jab” has seen previous illnesses supposedly “cured” come back with a vengeance. From certain easily-treated cancers to guillain-barr syndrome to other easily treated diseases they are all coming back.
          Let’s not forget 18-year-olds with hearts that look like they are from a 90-year-old and the extensive, “stringy” blood clots that many undertakers report in their “customers”.
          Nope, I’m a “pureblood” and intend to stay that way…

      • I read the local obituaries and the number of young people (20-60) dying “suddenly” with no other major health issues isn’t astronomical but it is magnitudes higher than pre-‘21. A friend of ours died of cancer at 50 in ‘18 and it was such an extremely rare kind of thing hundreds of people from our small community attended the funeral. Now, every week I read of one or two younger people (among many oldsters, of course) dying suddenly. No one asks any questions, it was just “their time.” Who could know for sure? They count on that and we will never be told the truth. I have my suspicions, though. Oh, and don’t forget the injuries and cancers.

  13. “But they said there was going to be a break-thru battery!” -Everyone who bet big on EVs.

    The scapegoating will begin, probably after the fall sElection (when that big recession all the signals are pointed to finally begins). And then the excuses. The scientists will blame the manufacturing engineers. The manufacturing engineers will blame the materials scientists. The marketing department will blame the government. The government will blame the consumer. And no one will blame God and sir Isaac Newton for making the universe this way. Because everyone paid attention to the particle physics minutia while ignoring the reality of the bigger whole.

    Turns out, only Moses could get water from a stone, and he paid for it dearly. I’ll bet he blamed God for the abbreviated trip to the promised land, maybe late in the evening after prayers and a few glasses of wine.

    Should we feel bad for the malinvestment? Should we point and laugh at their self-imposed misfortune? Or should we take this opportunity to educate, to once again point out the fallacy of government and central planning? How, yes, just because something might be possible in theory, wishing won’t make it reality. And that the best way to allocate scarce resources is by allowing market price to be the measure. We’ll need to have our ducks in a row, and be ready for that overeducated fool in the back row, the emotional zealots and those who are heavily invested (and doubling down). But we have reality on our side, even if the rose colored Vision Pro goggles distort and hide it from the true believers.

  14. @Eric – Disney is conducting a final purge of Brer Rabbit and friends from the parks this Spring with the opening of the Splash Mountain replacement attraction in Anaheim and Orlando.

    The Country Bears and, specifically, Tex Ritter, are next up for reeducation in Florida. They’ve been long gone in California.

    The timing of the Country Bears announcement was interesting — exactly 20 years after John Ritter, Tex’s son, passed. I’m wondering if there was some contractual obligation which had to be honored.

  15. The US economy is bleeding out, and car makers are helping it along. Too stupid to realize that if the US economy dies, there will be no US car makers. It’s like the car makers all got together and asked “how can we destroy our market?”, and found an answer.

    • They’re still behaving like the big three are the only game in town. Sure, there’s tariffs and bans, but look at all the different car brands. Then realize that the dealers are all consolidated, but they all have the same overhead of having different buildings, sales teams, service departments and now edicts from manufacturers and government to carry products that, due to physics and legislation, are identical. This cannot be a long-term solution. Badge engineering or branding will only take you so far when you’re selling a commodity like a 2.5L turbo-four SUV. Oh, the all-wheel drive system is a little different, or the dash has different shapes, but it’s the same vehicle. Right down to the paint choices (since PPG is the supplier for everyone).

      The unions and government are acting like they’re still dealing with the big three, too. They got their big contract out of Ford, but then F laid off hundreds (thousands?). Government issues mandates that could probably be absorbed by 1960s GM, but not the highly leveraged payday loan bank GM became in the 90s. And consumers just walk over to the Toyota building next door, find the same milquetoast product offered, and walk away.

      I noticed my neighbor just bought a Buick. The only reason I knew it was a Buick was because I recognized the badge on the grill. The only reason I knew it was new was because of the temporary plates. Otherwise it could have been a Kia, or a Toyota, or a BMW, or a Chevy. I would have been hard pressed to tell you who made it without the three-shield logo.

      • The big three are the only game in town left when it comes to half ton pickups with V8s, real work vehicles.

        Unfortunately the work trucks were fetishized and prices increased into the stratosphere in order to crate a revenue stream to support R&D on the all EV future.

        • Except they are no longer “real work vehicles”. The bodies are fragile, the beds are only 5 or 6 feet long, and so high off the ground you can’t reach into them. Glad I no longer have need for one.

          • Scrappers don’t want to fill pickup trucks full of scrap iron, aluminum, etc.

            They buy an all steel trailer, which is about the size of a full size 8′ pickup box.

            If you want to haul materials, you buy a small trailer that can be unloaded easily.

            What you see these days.

            Remove the pickup truck box and buy a flatbed with rails.

          • I just pitched up a 88 F150 with 300 and 5spd. Single cab, 2wd, long box, no AC, roll up windows with wing windows. It’s the most excited I’ve been about a new to me vehicle in some time. It’s just pure and honest.

            • Congratulations! The 300-6 is one of the greatest engines ever made. I have a 79 F150 flatbed with the 300 and a 4-spd.

      • Indeed! I have a silver 2005 Honda Accord. I have to park it next to a light standard or cart corral so I can find it when I come out of the store, because it doesn’t look much different from a new one.

  16. How many people read Automotive News? No very many; compared to what is “trending” on social media and the MSM.

    If that headline was blasted across the country like “The Cases, The Cases” people might just pause and wonder what the heck is going on. But, if these inconvenient facts can be simply ignored there will be no uprising of the peons.

    Yes, as Karine Jean-Pierre would tell you the economy is booming under the Biden Administration. The problem is that booming you hear is bombs falling on the nation’s finances.

    • You can’t stay in business giving money away. These CEO’s think the government will bail them out because the government is pushing EV’s now but later they will push mass transit and bicycles. Then what? Long live Studebaker!

      • Bail them out with what, Rik? Just print more monopoly money? The fiscal cliff has been looming for a few decades but GloboCap [h/t CJ Hopkins] has ignored the signals in their quest for a planetary strip mall.

        • If you get the money before everyone else, you can buy up all the hard assets at today’s prices. Buying and selling happen in milliseconds, and you don’t have to wait for your turn or to land on that square either. That funny money doesn’t have to stick around more than a few minutes in your account before you can move it out to something valuable. Downside is you run out of stuff to convert it to, so you have to starting buying down market. Things that shouldn’t be investments become valuable. Antique cars, middle-class housing, farm land… no one on Wall St should be at all interested in these things, but here we are. And because they’ve bid up the price the value has to be maintained, effectively shutting out anyone who could actually put a modest suburban home or family farm to good use, turning them into renters and peasant farmers if they decide to play along.

          • Everyone is invested in corporations buying up middle-class housing through their pensions (the few that are left) and 401(k) plans.

            Check your retirement plan statements and prospectus, particularly if you are with Vanguard.

            Doing taxes this year, I was really surprised that ~ 10% of the dividends I received from my non-sheltered VTSMX came from REITS, essentially middle-class housing owned by the fund.

            Some of the trusts hold surprising amounts of military off-base housing, paid for by the new, more generous allowances. Things that make you say “Hmmm…”

            • Call it the Kobayashi Maru economy. By keeping interest rates too low for too long, the FED put itself into a no win scenario. If interest rates would have been allowed to float to their natural level, with an increasing number of retirees looking for stable value, would have naturally reduced money and allowed for the economy to demand higher interest for long term credit -and subsequently lower prices for assets like homes. But instead Greenspan, Burnake and Yellen were too chicken to let the correction happen. Now that they’ve steered us well into the neutral zone the inflation attack has begun. So now they’re left with the un-winnable scenario: raise interest rates into a rising valuation market, making things worse. This has effectively frozen out the real estate market, with people holding low or no mortgages staying put and markets still getting top dollar for limited supply. If you’re buying with cash, it gets harder. If you’re leveraged with a high interest mortgage, you’d better be earning top dollar for your labor and be in a stable position, like a government job.

              • A government job. Like a member of the military who needs incentive to look the other way while the Commander-in-Chief shuffles his way into a nuclear war.

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