The first step in fixing a problem is recognizing the problem in the first place. I think that of all the major Detroit automakers, it’s probably Ford that is the best at recognizing the problem, even if the company isn’t that close to a solution. Is Ford’s CEO the only one who gets it or is he being blinded by too much gear?
Today’s installment of The Morning Dump is all about the future, even if the only thing I’m thinking about is the Astros’ game against Detroit’s own Tigers happening today. This will be difficult for me. I want the Astros to beat them, but, at the same time, I understand that the Tigers are a much better story.
It’s the same for Tesla and BYD in China. It looks like both companies had a great Q3 and I’m leaning towards an American company that is printing overseas. However, I want Tesla to refocus on affordable products, which is where BYD excels. If Ford has a great future, what about the rest of Detroit’s automakers? Well, Stellantis has to bring back almost all of its plug-in hybrid SUVs, and GM is still paying for its Cruise debacle. So not great.
Well, I have a whole day of work to do before the first pitch, so let’s go.
Enthusiastic products are ‘Our Business’
I’ve been thinking about writing “The Bull Case for Ford” as a TMD for a while, based on the fact that the automaker is in what I think might be the best position to win the future. Why not? Every time the idea pops into my head, the company does another recall or puts out another questionable product and I decide not to.
Looking broadly at what used to be Detroit’s Big 3, I think you would have liked to be Stellantis during the pandemic. Her costs were low, her products were cheap to make, and she made a ton of money. Right now, I think you’d rather be General Motors, which has a diverse EV portfolio and is still making great trucks and profitable small crossovers. So why is the future shaped like a blue oval?
The last time I decided to write this post I was in England looking at a bunch of fast Fords that I grew up loving. It is clear that at the heart of this brand are some amazing and iconic cars. And then I walked over to the Ford Capri EV stand. I haven’t driven the Capri, but I’ve driven VW MEB platform cars before, and they’re fine. One dressed up as a crossover with some cues borrowed from vintage Capri just doesn’t do it for me.
Ford CEO Jim Farley did a great interview with Car magazine at a launch for the new MEB-based European Explorer and it’s giving me some hope. I’ll start with the part everyone seems to be paying attention to:
“We’re getting out of the boring car business and into the iconic vehicle business,” he tells me. “We’ve always competed in the heart of the passenger car market, which hasn’t worked out too well for the Mondeo, Focus and Fiesta. They were loved by many customers, but they could never justify shelling out more capital – unlike commercial vehicles.’
[..]
Ford never funded enthusiast products – they were always a side business. Now with the Mustang, Raptor and Bronco, they’re our business,” says Farley.
Having driven the Puma ST, I agree that it’s a fun vehicle and not just another boring crossover, although the fun versions don’t seem long for this world. The long-rumored Mustang Raptor also makes an appearance, and Farley seems to hint that we’ll be seeing it sooner rather than later, and that we’ll be seeing more RS-badged cars. Farley also says that Ford can “take on Porsche” with the Mustang and that more money will be invested in that brand, which sounds good.
The MEB bit has always bothered me though. Ford has touted its skunkworks team as trying to develop an inexpensive electric platform to underpin the company’s next generation of EVs, but is that just throwing ideas at the wall and waiting to see what sticks? ?
If there’s any hope to take from this interview, it’s in Farley’s calm admission that the MEB game with Volkswagen was a short-term solution to the problem of getting an EV platform to Europe, and that he understands that China and Tesla are the real competitors and that beating them requires a solution simply built by Ford:
“If your bet is the digital experience as a differentiator, you can’t use someone else’s electrical architecture. If I use MEB, then another architecture in China, one in North America and another for export, it’s different software. Software to be written in individual module for propulsion, braking, steering, seats. whether [Ford] is very committed to digital differentiation, it is impossible to have that complexity.
“One of my biggest bets as CEO is our platforms, including our electrical architectures. There will be places where we work with each other, like MEB. But in the future this will be more difficult, not easier.’
The ‘No more boring cars’ line gets the headlines and I couldn’t resist it either. But it is the quote above that is the key. If an automaker is to survive, it needs more than a distinct brand identity for its products. If Ford wants to sell at any volume, it needs a digital experience and a platform unique to Ford. It doesn’t really have that now. General Motors makes the Ultium, and we’ll see if the cheaper Equniox EV is a success.
If there’s a case for Ford, it’s that it will be able to develop a scalable and affordable platform that performs like a Tesla and looks like a Ford. The bear case is that it is very difficult. It’s the hardest thing Ford has done in 120 years. I’m not sure it can pull it off, but unlike Stellantis or even Volkswagen, I can at least articulate what a future Ford looks like.
This is nothing.
Will Tesla or BYD sell more EVs in China in Q3?
You can never count out Tesla because it is probably the most flexible large vehicle manufacturer in the world. It only makes a small number of products and has enough of a war chest to throw out crazy discounts and deals to make the volume any time it wants.
China is Tesla’s most important market, and it’s also the most difficult place to be an electric car maker. Competition is fierce and consumers are wary of spending money given all the ongoing economic uncertainty. Tesla’s big scam, in addition to cutting prices, has been offering discounted insurance. So far it seems to be working.
Domestic automaker BYD also played the discount game and was rewarded with a strong first half of the year. What BYD does offer is a more diverse range of cars and super cheap EVs like the BYD Seagull, which has a nice interior and good range for the equivalent price of a pack of Wrigley’s Doublemint gum (ok, about $10k, but not far).
We’ll soon find out who was on top in BEV sales (BYD almost certainly sold more cars since it also sells hybrids), but there’s some early data to consider
According to CnEVPostBYD sold a total of 164,956 passenger BEVs in September, an increase of 9.1% year-on-year. Its PHEVs were even more successful, reaching 252,647 vehicles per month. In total, BYD sold 419,426 plug-in vehicles during the month. This brings BYD’s total BEV sales to 443,426 units in the third quarter.
Now we’re just waiting for Tesla to report, although we do know that the company is expected to sell more than 460,000 BEVs in the third quarter globally.
Stellantis Recalling 194,000 Jeep Plug-in Hybrids
Earlier this month I wrote about an impending recall of Jeep PHEVs that were catching fire while parked. The comeback is now coming.
from Reuters vIA Automotive News:
The Italian-American automaker is recalling some 2020 to 2024 Jeep Wrangler models and 2022 to 2024 Jeep Grand Cherokee plug-in hybrids. The issue involves a battery component, the company said.
Parent company Chrysler said the fires occurred when the vehicles were parked and turned off. He estimates that 5 percent of the affected vehicles may be defective.
Stellantis said the vehicle’s risk is reduced when the battery’s charge level is depleted, and said owners are advised to refrain from recharging and should park away from structures or other vehicles. The company said a solution is imminent.
I like 4xe, and it’s been one of the bright spots in a lackluster year for Stellantis, so that should do the trick a bit.
GM pays $1.5 million fine for lack of disclosure
Almost exactly one year ago a Cruise Robotaxi in San Francisco was off duty when it was involved in an accident that resulted in the Cruise vehicle dragging a pedestrian 20 feet to the side of the road. This was clearly a big issue, exacerbated by Cruise’s decisions to withhold information from regulators, leading to the revocation of his self-driving license, forcing him to temporarily shut down his taxi service and seeing his executive team or leave or be fired.
Cruise vehicles are back on the road, but the company isn’t done with the fallout just yet. from Reuters vIA Detroit Free Press:
The National Highway Traffic Safety Administration said Monday that General Motors’ self-driving car unit Cruise will pay a $1.5 million fine after failing to disclose details of an October 2023 fatal crash involving a pedestrian.
Under the agreement, Cruise must submit a corrective action plan to NHTSA on how it will improve its compliance with serious incident reporting and will face expanded reporting requirements for at least two years.
GM president Mark Reuss said it would take five years to regain trust, so just four years to get there.
What am I listening to as I type TMD
Scottish producer/artist SOPHIE was amazing and her tragic death is an incalculable loss to music. If you’re not familiar with it, I suggest this profile/review of SOPHIE’s posthumous self-titled album by our old colleague Jia Tolentino.
The big question
Can Ford do it?