Ford says EV unit losing billions, should be seen as startup | Hacker News Reader

Ford says EV unit losing billions, should be seen as startup

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24 pointsrntn20 comments

That is a naive/odd way to look at RD spend and factory building - especially when without it one goes the way of horse carriages.

Although since most businesses have long ago slashed their R&D for short term stock gains, it makes sense from a corporate american perspective despite being naive.

Is it conceptually different than saying "I lost 10K this year; I put 10k in a 2-year treasury note."

I was just thinking this, that it's kind of pathetic that they have to remind people that R&D takes time to pay off.

They may feel a need to remind people (especially shareholders) of that right now because Ford seems to have "written off" much of that R&D at this point because Ford's immediate next two models (and presumably several unannounced models beyond that), the EV versions of the classic SUV Ford Explorer and cross-over Ford Puma, are switching to VW Group's MEB modular EV platform (that all of the VW ID series models are built on, as well as Audi and other VW Group brands).

(That is a really interesting "strategic partnership" to watch right now. Early previews suggest the Ford Explorer may be the best use of the MEB platform to date, and Ford using the Explorer badge on it may be the sign that they expect to sell a lot of them.)

Disclosure: I own a Mach-E. Except for minor niggles, touch wood, it's been great.

The Mach-E and F150 architectures were stop-gaps, and pretty good at that.

* One, it still is not completely clean sheet, and thus has a lot of unnecessary complexity in wiring and body parts - which pushes up unit costs.

* Two, it's a 400V architecture that really doesn't like a lot of electrons flowing through it all at once. As a result it throttles charging speeds and acceleration pretty brutally.

* Yet, weirdly, Ford's electronics are quite a bit better than VW. No one is at Tesla levels, but VW's electronics is just bad. Quite a few YouTube reviewers have detailed this.

> Yet, weirdly, Ford's electronics are quite a bit better than VW. No one is at Tesla levels, but VW's electronics is just bad. Quite a few YouTube reviewers have detailed this.

In-car infotainment and things like that? Yeah, VW has an interesting reputation from their "experiments" and failures across the ID line. That was definitely one of the reasons that early previews think that Ford's Explorer may potentially out-sell VW's own MEB efforts if for no other reason than because the in-car non-battery electronics are Ford's sleeker, more battle-tested things. (VW is certainly looking to improve things in the near term, they've been in the process of moving out of "experiments" and towards Android Automotive.)

Have they worked on this in recent years? I don't know how VW's are but a relative of mine had a Ford (I believe 2018) and the infotainment system was absolutely abysmal. I wrote off ever owning a Ford because of that thing. It felt like a joke.

Yes, Ford has gone through a major revision since 2018.

But also, VW's ID.4 especially is notorious for having one of the worst ever designed, which is definitely saying something.

They really want D&P (development and profit), or D&$

It’s unfortunate that the tax credits are as restrictive as they are. A large portion of eligible vehicles are going to end up manufactured in Mexico instead of the U.S. anyways, and it’s created an artificial barrier for Hyundai who is probably shipping the best EVs on the market right now but can no longer compete in terms of price.

Mexico production is included in the tax credits. GM lobbyists made sure that "American made" meant "North American made" (as opposed to "USA made") in the new credits.

I believe Hyundai's current issue with the tax credit is something else.

They pulled a bunch of models out of their ass in pretty short time so I'm sure their spend on R&D and tooling is astronomical. I'm not surprised they're not profitable at this point. Those product lines have to actually get produced for awhile to be in the black.

Relatedly, Ford's next few models are going to share VW Group's MEB platform and buying someone else's platform likely isn't cheap either. (But that move does help explain how Ford is expecting to go from two EV models to an expected 8-12 in just a couple of years turnaround.)

Its interesting to compare it to Tesla.

At the same volume, Tesla had a -20% EBITA, Ford has -40%. Ford once do 2 million EVs in 5 years. Tesla did 1.4 million in that time. Ford is targeting 8% margin, Tesla had 16% margin.

So Ford expects to grow the EV business at an really, really high rate. I question weather that will actually be possible. There will be quite the battle over the supply chains in the next 5 years and literally every company has announced pretty high targets.

What will also be interesting to see is when will the traditional business really start to do badly and shrink.

Chart Ford's EV production ramp waveforms relative to Tesla.

Just because something is a curve doesn’t make it a waveform.

The terminology is funny here, because samples on a time axis are not arbitrary curves, and if the samples were of some physical property, we'd call them waveforms.

I'm curvy, am I a waveform?

Tesla turned a profit in 2019 and on. It was negative 2013 to 2018, so almost 10 years. How much of the lost billions was money given to Ford by the US government?

> 2013 to 2018, so almost 10 years

Huh? That's literally half of 10 years.

I was referring to the 10-year period from 2013 to 2023. Yes, it was only about 6 years before they turned a profit with 2019 to 2022/23 being profitable. I said 'almost', since the data I was viewing ended 2022.

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