When Not Making an “Investment” Pays

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Ford’s plan was to limit which Ford dealers could sell Ford EVs to those that agreed to “invest” large sums of money in alterations to the dealerships’ facilities – such as building out EV-specific service bays and adding on-site/high-voltage DC “fast” chargers for customers’ use. Dealers that made the “investment” would be part of Ford’s new Model e network, riffing on the Model T and implying an equivalence in forward-thinking smartness.

Dealers that didn’t make the “investment” would become second-class Ford dealerships that didn’t get EVs to sell.

For which those dealers are probably thanking their lucky stars – given how difficult it has become to sell EVs (and not just Ford EVs). Those that did make the “investment” not only lost the money they spent but gained an inventory of devices buyers don’t want that cost them – and Ford – money.

$100,000 per device, according to Ford. Not counting the costs of all that “investment.”

The solution? Try to sell more devices by sending devices to all Ford dealers. Including the ones that didn’t “invest” in them.

“We want to make these great vehicles more accessible to everyone,” said Marin Gjaja, who is  chief operating officer for Ford’s EV business.

This will certainly help clear the glut of devices Ford – the company – has had to stockpile because Model e dealers that made the “investment” are already overflowing with devices they can’t sell. But it’s bad news for Ford dealers that didn’t make the “investment” – that will now likely be stuck with devices as part of their allotment, which is industry-speak for the mix of new vehicles (and now, devices) a dealer gets from a manufacturer each month.

Ford dealers – any-brand dealers – want to get vehicles that sell rather than sit. The sooner they sell, the better. Because the longer a vehicle sits on a dealer’s lot, the more it costs the dealer in interest. Dealers are in fact the first owners of new vehicles; they buy them from the manufacturer – they take out short-term loans at interest – with the object of selling the vehicles they stock up.

Ideally before the next interest payment time rolls around.

“Great vehicles” don’t sit. There is no glut of Mustangs or F-150s, both of which are great vehicles – as evidenced by the eagerness of people to buy them.

With devices, the pressure to sell is compounded by the problem of keeping them charged while they sit. As readers of this column already know – and as people who already own EVs can attest – a device left unplugged will lose charge because devices are always burning power, even when they aren’t moving. The device’s battery must be kept from getting too cold when it is cold outside – and too warm when it is hot outside. This is necessary to prevent damage to the battery – and possibly to whatever’s near the device, such as your house, by reducing the risk of its battery spontaneously combusting.

That’s why devices have what are styled thermal management systems – which are essentially a heating/cooling system for the device’s battery. It’s like having a second AC/heat system. One that’s always running and so always burning power. Left unplugged overnight on a cold night, a device will typically have lost 10-15 miles of the range it had when parked the evening prior. It’s like having a pinhole leak in the gas tank of a vehicle that isn’t a device – except it can’t be fixed. All that can be done to avoid the loss is to keep the device plugged in when not being used.

Which is an interesting thing in that vehicles with engines burn no power when they are parked and so “emit” nothing when they are parked.

Devices don’t “emit” anything either.

But their burning of power while parked does require more power to be generated (and so, gasses “emitted”) elsewhere. Does it matter to the “climate” whether the “emissions” come from the tailpipe or the smokestack?

So much for “zero emissions” devices.

To staunch the trickle-loss of charge arising from just sitting, dealers must regularly “top off” their fleet of sitting devices. Hence the need for the “investment” in “fast” chargers. Else the dealer would have lots of difficulty keeping its inventory of devices charged up because of the time it takes to charge a device up. A single 30 minute test drive can suck 30 percent or more of the charge out of a device’s battery and that doesn’t leave much when a fully charged battery doesn’t endow the device with much range to begin with.

Devices also depreciate at hair-raising rates because of spreading awareness about the cost of replacing a device’s wilting battery pack. Instead of losing 30-40 percent of its value over the course of five or so years – as is typical for vehicles that have engines – devices with batteries are losing that much (or more) of their original value after as little as one year. This is one of the latest reasons for the ebbing of buyer (and lender) as well as dealer enthusiasm for devices.

A 2024 device that’s still sitting on the lot by fall – which is only a few months from now – is in peril of having to compete for the dwindling number of potential device buyers who will prefer a 2025 (model year) device. The latter devices are already being manufactured, even though it’s only midway through calendar year 2024. That’s just how the business has always worked.

The problem is the business has changed.

The government now mandates – effectively – what must be made. But it hasn’t yet mandated what people must buy. They still have the freedom not to – and so long as they have that freedom, devices are going to remain a harder sell.

Especially for the dealerships that “invested” in selling them.

. . .

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32 COMMENTS

  1. I sold cars out of a Chrysler-Plymouth-Dodge dealership from ’85 to ’89. It was a tough time, post bailout, selling umpteen versions of the K-Car and rebadged and slightly restyled mid-size Volare’s and Aspens renamed 5th Avenues and Diplomats (Plymouth’s version name escapes me at the moment) against actual full size GM and Ford products. Point of this lengthy screed is, even when a vehicle was on the lot for far too long, the saying was “there’s an ass for every seat.” Eventually, they sold. New point as regards EV’s: Those asses may never arrive.

    • When your prospective new device will likely incinerate your ass, it won’t do much for creating repeat customers….

      Or getting new customers interested in buying one!!!

    • Big M
      Awesome comment. Dang… you SOBs always beat me to the punch.
      Sorry I’m old and.. was diagnosed with “Chronic Alarm clock.. distress syndrome “ ..
      I was told it was a terminal condition…
      Oh well .. And so it goes

    • Hi Marty,

      A measure of our times is that those ’80s-era K-Cars are looking pretty good in the rearview – and the 5th Avenues and Diplomats even more so. I bet they’d sell quickly today.

  2. If I were a dealer that ‘invested’ in Ford’s e-certification and spent big bucks on satisfying Ford’s specs of such, and then Ford allowed the dealer 20miles away to buy EV’s without the certification, I would send Ford the invoice for e-certification.

  3. I bought a 40 lb bag of rye seed to use as a cover crop, that was two years ago. Used about half, will seed some more for cover crop in another part of the garden.

    This year, I have a rye crop that is ripening and will harvest the rye crop at the end of July to early August. Might get a couple of bushels and maybe a peck or two more.

    Rye wants to grow no matter what.

    The luck of the Irish, I suppose.

    All organically grown, make a mash, distill it, rye whiskey.

    The weather is not so hot these days, not one day in the 90 degrees range so far. Not normal for May and June in other years.

    It’s almost summer and it feels like winter. I’ve seen warmer days in January.

    Uff da. Must be in Greenland or something.

    • d…
      The “rye planting “… explains a lot …

      It appears you comment while experiencing “St Elmo’s Fire”…..aka (ergot)
      I got it 👍 Forget sending me your mushroom omelette recipe

      • Fear and loathing in electric vehicle wasteland. It’s a wild ride, a trip into fantasy land.

        Eating ergot laced rye bread will cause wild hallucinations in witches in New Salem.

        Mild stuff compared to Jimson weed root. You’re in for a wild ride. Hunter Thompson might have experienced moonflower, nobody really knows these days.

        There is a reason for a Hopi medicine man.

        Jimson weed root did/does tame the most unruly Hopi brave, gives him food for thought.

        It is in the books and in the book, Drugs from Plants, by Trevor Williams.

        Water hemlock grows along the river banks everywhere you go.

        Looks and tastes similar to celery, you’ll die if you eat some. In two hours or less, you’ll be dead.

        Know your plants.

        Fully aware of the nuance. And, no, I don’t eat the ergot. Farmers did go out into their rye fields and collect the ergot back in the old days.

        For medicinal purposes. People aren’t stupid.

        • You rock!
          And a happy Machineel tree harvest to you 👌…
          Those “beach apples “ .. are “yummy “….
          “Bet you can’t eat more than one.”😂😂

  4. You know, the safe and effective investment that these dealers made would have really paid off if it weren’t for those goddamn EV-hesitant drivers out there.

    We’ve been very patient with the Un-EV’d drivers causing our planet to boil, but our patience is wearing thin!

  5. Where is this all heading? It looks like people who wanted EV’s have EV’s and the market isn’t willing to soak up too many more. Meanwhile, the EPA cranks down on CO2 “pollution”, so there are only a few years, less than one product design cycle, for cars to average 51mpg and trucks to average 35mpg. Neither of these is achievable without selling many EV’s. To that end, the EPA also redefined the multiplier for MPGe to make MPGe higher for all EV’s which would help with those averages.

    Something’s gotta give, and I’m having a hard time predicting what it will be.

    • We’re way past due for a real economic collapse. A stupid war should just about do it.

      I don’t think any of these initiatives will see the light of day.

    • “..there are only a few years, less than one product design cycle, for cars to average 51mpg and trucks to average 35mpg. Neither of these is achievable without selling many EV’s.”

      This is achievable with selling fewer ICEs.

  6. I doubt their “sales” would markedly increase if they decided to give them away. It’s obviously an over saturated market. I certainly wouldn’t take one.

  7. EeeVee meltdown in Germany:

    ‘The figures for the registration of new electric cars in Germany are looking increasingly awful. In May 2024, the Federal Motor Transport Authority (KBA) reported that it had registered only 29,708 vehicles with electric motors.

    ‘That is 30.6% down on the result for the same month last year.’

    https://tinyurl.com/yeywz76x

    Who coulda knowwwwwwwed? Actually, it’s precisely what you’d expect after putting brain-damaged leftist clowns in charge of your freaking country. JHK explains:

    ‘Germany, the Euro club’s biggest economy, stood by listlessly while America blew up its supply of affordable natgas (the Nord Stream pipelines), which was an act of war by us against Germany. Apparently, [Chancellor] Olaf Scholz went to our CIA station in Berlin for a haircut one day and came out with a lobotomy, staring blankly through the whole affair like a Hinterwälder steer on the killing floor. Meanwhile, goodbye industrial economy! Nice knowing you. Looks like it’s back to the fourteenth century, living on rough black bread, sleeping with the cattle under your house for heat in winter, fighting jihadis inside your town walls.’ — James Kunstler, ‘The United States of Go Figure,’ June 17, 2024

  8. I remember way back when when Ford had some electric vehicles in use in California. The EV’s had nickel-metal hydride batteries in them, Rangers. Some were lead-acid batteries, lease holders liked them, then Ford wanted them back. Most were in California. 1998-2002 were the years.

    90 miles of range, just drive to work and back, go for a joy ride out in the country for 50 miles, have some fun in the sun.

    Sun, surf and sand, what else is there?

    You’ll be able to make it back home dancing a jig.

    Electric vehicles are a niche market for suburban life, they can work.

    Not going to drive an EV from coast to coast, it’ll be toast.

    And my soul cries out for rest and the end is not in sight – Amazing Rhythm Aces, The End Is Not In Sight

  9. “The only two functions in a business are marketing and innovation. All the rest are costs.” – Peter Drucker

    “I reject your reality and substitute my own” – Adam Savage, self-mocking*

    EV “innovation,” inside the walled garden of the design studio, is pretty neat stuff. Looks high-tech, all sorts of new buzzwords like KW instead of HP, MPGe (with the cool 2000s lower case ‘e’), etc. That 0-60 time that no one will ever notice thanks to cops on every corner and nervous mergers on the ramps. And simpler to design too. No high pressure fuel rail. No oil sump. Just cables to route. Batteries and drivetrain on “the skateboard” makes it easy to exchange out whatever is hot, be it a minivan or a pickup truck. Great stuff.

    As for selling them, that’s marketing’s problem.

    Objections? That’s why you have sales people.

    Physics? Well, that’s your lying eyes!

    * https://youtu.be/AqSDQ5mR1gU?si=x0vEWSCPJDbGKdtH

    • Adam Savage spoke at the Dallas Fan Expo last weekend. His allotted hour — following immediately after William Shatner no less — was way too short.

      Yes, I paid for an autograph. “Don’t try ANFO at home.”

  10. People who STILL belieeeeeeeeeeeeve the BS narratives that EVs are somehow better for the environment than regular gas powered automobiles are chumps. They’re probably the same people who are STILL wearing face diapers everywhere, on their TENTH COVID shot (per the latest recommendations by the CDC), still believe the BS narratives about COVID and the mRNA jabs, are still “Ridin’ with Biden”, think that January 6th was an INSURRECTION, think that Trump only became President because he “Colluded with Putin”, think that nuclear war is good (particularly if it wipes out BILLIONS of CO2 emitting humans), think that NATO & these world leaders pushing war aren’t insane, think that shutting down small farms & forcing people to eat bugs and frankenfood will “Saaaaaaaaaaaaaaaaaaaaave the planet”, think that reelecting the Biden Thing will “Saaaaaaaaaaaaaaaaaaaaave Democracy”, etc.

  11. More PR baloney from EeeVee maker Fisker, which filed for bankruptcy late yesterday:

    “Fisker has made incredible progress since our founding, bringing the Ocean SUV to market twice as fast as expected in the auto industry and making good on our promises to deliver the most sustainable vehicle in the world.” — Automotive News

    https://archive.ph/b6Jja#selection-7837.63-7837.287

    Likewise, your humble correspondent has made incredible progress, giving up his crack habit twice as fast as expected in the rehab industry and making good on his promises to stop beating his wife, stealing from the till and shitting in the street. *pats self on back*

  12. The comparison between the Model T and Model e is unwittingly funny.

    Both were / are homogenous, bland, and devoid of personality.

    At least the Model T was useful. Could be a car, a truck, a farm tractor, a power source, etc. Eevees have no such joy.

    • Having owned a 24 model T roadster pickup, I would heartily disagree. She was neither bland nor devoid of personality, and by the time I was playing with her 60 years after she was made, she was neither common nor homogenous.

      The model T made modern America what it was by the 50s and 60s, the envy of the world, with its freedom of travel and cheap mobility. The powers that be hated and feared the model T for its corrupting influence, it had a back seat away from the family chaperones, it allowed the congregation to roll don the road a few miles to get a drink after the local tyrants made dry towns and counties. They allowed the locals to head a few miles away from the local shop for a better deal, and away from the early enforcers’ jurisdiction and cages and Billy clubs. It brought real freedom at a very affordable price.

      The EV is the antithesis of all that.

  13. “We want to make these great vehicles more accessible to everyone,” said Marin ‘Lady’ Gaga, who is chief operating officer for Ford’s EV business. — Reuters

    Public Relations 101: spin an ugly setback into a Great Leap Forward.

    ‘Dealers who did invest hundreds of thousands into the machinery and programs Ford required are feeling burned now that EVs will soon be available to all,’ reports Reuters.

    Yeah — kinda like how peeps lined up at football stadium parking lots in early 2021, after registering for scarce slots, to get ‘vaccinated.’ Volunteers to run these shows were recruited by offering them early access to ‘vaccines’ — a VIP shortcut to the front of the line. Now they can’t give that shit away.

    EeeVees were another covid-era delusion. Jim ‘Lightning’ Farley actually expected lines around the block to buy them, as a few privileged personages were admitted through the velvet ropes, hollering ‘Take my money — PLEASE!

    And so another extraordinary popular delusion takes its place in the annals of the madness of crowds. So far it hasn’t occurred to Ford’s Model e division to deliver every Lightning pickup with a free Segway and a Hula hoop — two other fads which had their 15 minutes of fame, then receded into the background Kultursmog.

    If only Ford could deliver Mach-e ‘Mustangs’ [sic] with a dozen cans of InstaCharge™ in the frunk. Canned electrons, bitchez — greatest thing since cold fusion in a jar! Don’t handle them with wet hands, or while standing in a puddle.

    • Hmmm, that Segway could be just the ticket for getting 10 miles further after the Lightning bricks out at the side of the road.

      And who needs Instacharge ™ when you simply need some used coffee grounds for your Mr Fusion?

    • Give away two free electric oak trees (Quercus electrophorum, op. cit.) with every new eFord. Plant trees to charge your car! How gloriously Green it will be! Be sure to thank His Fordship for his ineffable Vision. ICE cars are for Savages.

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