| From: Savant | 7/18/2023 9:19:21 AM | | | | | | Ford slashed prices on its electric F-150 Lightning pickup truck by up to nearly 17% Monday, the latest sign that swelling inventories and fierce price competition are softening the market for the technology the auto industry is betting its future on.
Ford Motor said Monday that the reductions, which effectively dropped the Lightning's starting price by almost $10,000 to $49,995, were the result of lower material costs and the company having more factory output. Some versions will get a steeper price cut than others.
The Lightning is one of Ford's highest-profile EV launches yet and is key to its growth plans as it aims to transition more of its lineup away from the gasoline-powered vehicles that continue to drive the bulk of its profits.
Automakers globally have been investing hundreds of billions of dollars to create new electric models, build battery factories and construct new EV plants. The capital binge -- in part prompted by tightening carbon-emissions requirements -- has over the years generated enthusiasm among investors seeking a growth opportunity in the wake of Tesla's meteoric rise in stock value.
Along the way, auto executives have touted strong consumer interest in their latest EV entries, as the companies set ambitious targets for converting their lineups to electrics. Now, Ford's Lightning price cut is the latest development raising questions about the strength of the budding EV market.
The pace of sales overall on EVs -- while much stronger than the broader car market -- slowed in the first half of this year. Meanwhile, some car companies are already reporting excess inventory, a reversal of a year earlier when many newly released models had multimonth wait lists.
Some automakers also have been cutting prices on some top-selling EV models.
Tesla -- which had 60% U.S. market share in electric vehicles this year through June, according to Motor Intelligence -- reported a surge in second-quarter deliveries that was helped by sharp price cuts and discounts rolled out earlier this year. Also over the weekend, Tesla began production of its Cybertruck nearly four years after the prototype was introduced.
Ford in January responded to Tesla's price cuts by lowering the price on its Mustang Mach-E electric SUV, a direct rival to Tesla's top-selling Model Y. The Dearborn, Mich., car company reduced prices yet again on the Mach-E in May.
When first introduced, the Lightning had a starting price tag of around $40,000. However, Ford several times hiked the sticker price during a period of strong demand and to help offset higher expenses related to materials and the battery inputs.
Shares of Ford fell 5.9% Monday, following news of the EV pickup's price cuts.
Ford Chief Executive Jim Farley has expressed reticence about price cuts on EVs, citing concern that it hurts resale values and brand image. Ford has been able to raise Lightning prices over the past year in part because there are few EV truck options on the market.
"There's a limit on how far we'll go," Farley said of the company's price cut strategy at a Wall Street Journal event in May. "I think it's a worrying trend."
EV pricing has softened throughout the year as some automakers have followed Tesla's lead. Industrywide, the average price buyers paid for an EV decreased nearly 20% from June 2022 to last month, according to research firm Cox Automotive. For gas-engine vehicles, prices have remained steady over the same period, increasing slightly to $48,808.
Electric cars have begun to back up at U.S. dealerships. There were 92 days of unsold EV inventory at the end of June, a measure of stock availability based on recent sales trends, compared with a 51-day supply across all types of vehicles, according to Cox.
The inventory numbers don't include Tesla, which sells directly to consumers. In the first quarter, the value of Tesla's finished goods -- a measure that reflects unsold vehicle inventory and those in transit to customers, among other products available for sale -- increased to roughly $4.6 billion, up from less than $1 billion the year before, securities filings show.
Boosting sales of the EV truck has become even more important as Ford aims to significantly increase production. Ford has twice increased its factory output target for the Lightning in the past couple of years and now aims to build about 150,000 electric trucks a year at its plant in suburban Detroit.
Tesla, too, is aiming to beef up the rate at which it churns out EVs, recently applying for approval to double the size of its factory near Berlin in order to produce up to one million EV cars a year.
The auto industry is under pressure to sell more EVs in part because of stiffening government regulations, not only in the U.S. but also in Europe and China. The Biden administration in April proposed some of the nation's toughest-ever restrictions on car pollution, laying out new rules that analysts say would require about two-thirds of all new vehicles sold be EVs by 2032.
Ford is already losing money on the EVs it sells. It projects that this part of the business could lose $3 billion this year, a figure that it expects to be offset by the profits earned on its gas-engine business.
Tesla, which continues to dominate the electric-vehicle market globally, has been aggressive in its efforts to grow sales, even if it has come at the expense of near-term profitability.
Throughout the year, it has released a series of price adjustments that have effectively taken down the cost of its vehicles between 14% and 28%, depending on the model. Tesla has more wiggle room to lower prices because its operating margins are higher than those of its rivals, including Ford.
Industrywide sales of electric vehicles in the U.S. surged by 50% in the first half of the year, cooling from a 71% rise in the year-earlier period.
Ford's EV sales increased 12% in the first half of the year, but executives say the growth rate would have been higher if the two plants building the Mach-E and F-150 Lightning weren't temporarily shut down for expansions.
-- Will Feuer contributed to this article.
Write to Nora Eckert at nora.eckert@wsj.com |
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| From: Glenn Petersen | 7/27/2023 7:22:21 PM | | | | | | Ford raises full-year guidance after solid earnings beat
PUBLISHED THU, JUL 27 202312:00 PM EDT4
UPDATED AN HOUR AGO
Michael Wayland @MIKEWAYLAND
CNBC.com
KEY POINTS
-- Ford Motor on Thursday raised its 2023 guidance after second-quarter earnings significantly beat Wall Street expectations, boosted by strong pricing and demand for the automaker’s traditional vehicles.
-- Ford increased its full-year adjusted earnings forecast to a range of between $11 billion and $12 billion, up from a prior forecast $9 billion and $11 billion.
-- EV adoption, however, is taking place more slowly than the company expected, in part because of higher costs.
DETROIT — Ford Motor on Thursday raised its 2023 guidance after second-quarter earnings significantly beat Wall Street expectations, boosted by strong pricing and demand for the automaker’s traditional vehicles even as adoption of EVs took hold slower than the company expected.
Ford increased its full-year adjusted earnings forecast to a range of between $11 billion and $12 billion, up from a prior forecast $9 billion and $11 billion. It also upped its expected adjusted free cash flow to a range of $6.5 billion to $7 billion from earlier guidance of $6 billion.
There was pressure on Ford to raise its guidance after crosstown rival General Motors raised its yearly guidance Tuesday for the second time this year.
Ford finance chief John Lawler said vehicle demand and pricing were “holding up” better than the company anticipated at the beginning of the year for its traditional businesses. However, he said, electric vehicle adoption is taking place more slowly than the company expected, in part because of higher costs.
Ford’s traditional business operations, known as Ford Blue, earned $2.31 billion during the quarter, while it’s Ford Pro commercial business earned $2.39 billion. Its “Model e” electric vehicle unit lost $1.08 billion from April through June.
The company said it now expects to lose $4.5 billion on the EV business this year, widening losses from roughly $3 billion a year earlier.
Here’s how Ford did during the second quarter, compared with what Wall Street expected based on average estimates compiled by Refinitiv:
Adjusted earnings per share: 72 cents vs. 55 cents expected
Automotive revenue: $42.43 billion vs. $40.38 billion expected
The automaker reported net income of $1.92 billion, or 47 cents per share, substantially up from a year earlier when it earned $667 million, or 16 cents per share.
Ford said its adjusted earnings before interest and tax, or adjusted EBIT, jumped to $3.79 billion, up from $3.72 billion a year ago. Its adjusted margin dropped to 8.4%, from from 9.3% in the year-ago period, amid increased production and sales.
Total revenue for the quarter was $45 billion, up 12% from $40.2 billion a year earlier.
It’s the second quarterly report in which the automaker broke down its financial results by business unit instead of by region.
Ford Motor (F) earnings Q2 2023 (cnbc.com) |
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| From: Julius Wong | 8/10/2023 10:07:08 PM | | | | | | GM, Ford, Stellantis slide as union president tosses proposals in the dustbin
Aug. 10, 2023 4:37 PM ET
Stellantis N.V. (STLA), GM, F
By: Christiana Sciaudone, SA News Editor
79 Comments
 Bill Pugliano/Getty Images News
General Motors Company (NYSE: GM), Ford (NYSE: F) and Stellantis N.V. (NYSE: STLA) slid amid worries that a strike or big union wage increase may be imminent.
It probably didn’t help that the United Auto Workers union president tossed STLA’s contract proposals in the literal garbage on Tuesday.
GM was down 5.8% while F fell 4.5% on Thursday. STLA was down 1.8%.
Tensions remain high between manufacturers and the United Auto Workers union as contract negotiations continue. Should a contract not be agreed upon, the union could strike next month.
The UAW is reported to be pushing for at least a 40% pay increase over the four-year contract, which would include a 20% jump in wages from the start.
STLA broke a pledge not to seek givebacks in this round of talks, UAW President Shawn Fain said in a statement. On Tuesday, Fain jettisoned STLA’s contract proposals into a trash can.
Last week, GM traded shots with the UAW ahead of the September 14 expiration of the current four-year labor contract. The company said it expects to offer unionized workers higher wages, but warned that granting the United Auto Workers' contract demands for large pay rises would hurt its ability to make sound business decisions.
Stellantis ( STLA) is the lead negotiator with the UAW, but the union has also presented demands to General Motors ( GM) and Ford Motor ( F).
The UAW demands would add more than $80B to each of the biggest U.S. automakers’ labor costs, Bloomberg reported, citing people familiar with the companies’ estimates.
When it reported earnings recently, GM's updated guidance did not include potential disruptions that could arise from a UAW strike. |
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| To: Savant who wrote (211) | 11/29/2023 1:43:36 PM | | From: OldAIMGuy | | | | Ugh. My '33 street rod sounds better all the time. They can surveil me if they can catch me!!!
It's time to tell Big Brother to mind his own business and budget and leave citizens alone.
OAG |
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