AD #3403 – EVs Catching On Faster Than Expected; Russia Threatens EU Industrial Base; Ford Tells Dealers To Slash Costs

September 12th, 2022 at 11:46am

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Runtime: 8:37

0:08 Russia Threatens EU Industrial Base
1:02 Ford Tells Dealers to Cut $2,000 In Delivery Costs
1:53 Honda To Reveal Smart ADAS
3:13 Lincoln Corsair Gets Mid-Cycle Refresh
4:17 Hyundai IONIQ 5 N Brings Wicked Performance
5:05 VW ID.5 Concept Made by Apprentices
6:34 Geometry M2 EV Debuts in China
7:09 EVs Catching on Faster Than Expected

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34 Comments to “AD #3403 – EVs Catching On Faster Than Expected; Russia Threatens EU Industrial Base; Ford Tells Dealers To Slash Costs”

  1. rick Says:

    in regards to the 2023 lincoln corsair dropping the 2.3L, what ever came of ford prechamber ignition research has anything come of it? sounds like a good power boost for the 2.0L

  2. ChuckGrenci Says:

    How can Farley ask and get $2,000 off Dealer selling and delivery of new vehicles, when quite a few dealers are adding market adjustments (because seemingly they can’t get product and are charging premiums). Just how much can the buyer absorb from the antics of the manufacturers and dealers because those saving to Ford are going to be transferred to the customer.

  3. George Ricci Says:

    Did Schaeffler give any insight where all the lithium, Cobalt, and Nickle is coming from in the quantities needed by those time frames?


    Ford and all the other OEMs see the benefit in the TESLA sales method. Not once has the TESLA sales method meant a reduction in price to the consumer for literally any TESLA sold. Not even once in the entire history of TESLA. In fact the exact opposite has occurred with staggering price increases to the consumer.

    Did anyone think the OEMs weren’t going to notice how TESLA can permanently shift prices upward on a whim? Especially when TESLA did multiple upward adjustments in just 1 year. The TESLA model is as equally anti-consumer as the dealer model is. It just has a phone app and masks addendum market adjustments(that can be rescinded at any time) as permanent price increases. Just need to add some marketing spin into it with a giga this or mega that.

  5. Kit Gerhart Says:

    I’m surprised they are discontinuing the 2.3 engine in the Corsair. That would be part of why people would spend the extra $9K over the Ford version.

  6. Dave Says:

    Lithium being the 5th most common element in the world, however it has to be remembered that 200 years ago Napoleon when entertaining the King of Siam provided him with cutlery made with the most expensive metal in the world, at that time; Aluminum while he had to use plain Gold while his officers used plain old silver aluminum being quite abundant as an element today and in the past but the electricity to process it the hard point. What will be the future be for Lithium?

  7. Albemarle Says:

    I think Ford are just publicly voicing what most OEMs feel about their dealer network. They are a devil they must live with but don’t control. Tesla can suck up all the increase in retail prices, but Ford can’t.

    Since a dealer is often one of the most successful businesses in a town, it’s easy to see the manufacturer’s frustration. It’s like trying to push on a rope.

  8. Ron Says:

    The EV adoption would be faster if OEM would produce in quantity. The must speed up a 3 to 6 month wait list is too long.

  9. Wim van Acker Says:

    Autoline Team: I am less pessimistic for Europe. Russia can reduce natural gas supply only temporarily: it needs the revenues and there are no pipelines to pump gas currently supplied to Europe to China or India. In 5-10 years they may have alternative customers, but not now. So Russia can may show off by reducing gas supply to Europe or even shutting it off. Just for a short while, because Europe and Russia are interdependent for gas demand and supply.

    Therefore the Western European industrial base will not be crippled. Aluminum plants are not affected, as you stated: those are located close to hydro-electric plants.

  10. Wim van Acker Says:

    @3: Lithium is abundantly available in the world. Nickel and Cobalt are not, and sourced from Russia and some African nations with strong Russian or Chinese influence. Therefore battery producers are developing batteries without those so called conflict metals. Such as California-based Lyten, featured several times on Autoline. Lyten has made significant progress over the past year, when they were presented on this show.

  11. George Ricci Says:

    10. It takes 7 years to bring a new mine online, so abundance is not the issue. I see lots of things which are supposed to be right around the corner, like 5 years ago we would see solid state batteries in 3 years. Where are they? Yes, you will tell me there coming. Until they are in mass production and all the issues are solved, it is all BS.

  12. DanaPointJohn Says:

    I don’t know what goes on outside the US, but here the consumer picks-up the delivery costs on a new vehicle. How is this saving Ford any money?

  13. Wim van Acker Says:

    @11 you have changed the topic to solid state batteries. The topic of comments #3 and 10 was about the availability of Lithium, Nickel and Cobalt.

    With your “Until they are in mass production and all the issues are solved, it is all BS.” you are discussing the viability of solid state batteries with yourself. Have fun.

  14. Kit Gerhart Says:

    How about using more LiFePO4 batteries for cars? They don’t have quite the energy density of other types, but they would be fine for EVs used for commuting, and they don’t have as many materials from “sensitive” locations.

  15. GM Veteran Says:

    I would love to see the data that Farley is looking at. I don’t know why he thinks dealers need to find $2,000 in savings. If a dealer is not price competitive, the market will take care of that. Ford just needs to build vehicles people want and price they competitively.

    Remember, if you don’t like the price of a Chevy Blazer at your local dealer because they marked it up, you can shop other Chevy dealers and have an excellent chance of finding a better deal. With Tesla you can’t do that. Their price increases are in effect at all Tesla sales outlets. You are at the mercy of Mr. Musk, or you can go shop for another brand of EV.

  16. GM Veteran Says:

    The OEMs get some major benefits out of the dealership model. Its why they established it in the first place.

    Inventory: the OEMs get paid for each vehicle when it leaves the plant. The dealer funds the inventory at the dealership. Tesla funds all of theirs. This could get more expensive in time as more competition may lead to Tesla inventory at sales centers in greater volume than they have now.

    Sales and Service: the OEMs do not own dealerships, pay dealership employee compensation or any other monthly expenses like utilities. Tesla bears all of these costs at their sales and service facilities.

    Training: most of the cost of training technicians, body techs, parts and sales personnel is paid by the dealer. OEMs provide it but charge the dealer for it. Tesla bears all of this cost.

    Administration and Liability: all of the admin and paperwork associated with a vehicle sale and financing is the responsibility of the dealer, including fines imposed when their paperwork is not up to snuff. The same goes for lawsuits coming from customers. With Tesla, the company takes on all of that cost and potential liability.

  17. George Ricci Says:

    13. I am simply pointing out the fact that what looks promising in the lab rarely makes it into production. So many issue/problems come out of no were when you try to productionize new methods/technologies. I am sorry if that is too difficult for you to understand.

  18. Roger T Says:

    I think the table shown at the end of the transcript meant to say for the first column 2030 projections from 2018 and the second and third columns 2030 and 2035 projections from 2022, no?

    Don’t think current hybrid sales are quite at 40%.

    If you ask Sandy Munro, Schaeffler is overestimating the transition timeline, it will happen sooner than that. That said, IF the charging infrastructure can lead the way, that’s a big IF.

  19. GM Veteran Says:

    7 – If OEMs are suitably frustrated with their dealers they can change things. They can buy out all of their dealers and then set up their own sales network. It would be hugely expensive. GM spent north of $2 billion buying out Oldsmobile dealers when they closed that division. Also, they would lose the advantages that the dealer model provides to them. (see above)

    The OEMs do have a certain amount of control of their dealers. They use a carrot and stick approach and typically get what they want in the end.

    However, you need to remember that we are not in a typical market climate right now. Anyone can sell cars now. In time the climate will change. Inventory will return as demand comes back into line and the OEMs are loathe to reduce production. When lots are full of cars and finance rates are higher, history shows that OEMs are really bad at selling vehicles. That is when they really like having dealers.

    Years from now even Tesla may wish they had set things up differently as their management looks enviously at the OEMs with dealers.

  20. wmb Says:

    #4.) To your point, as I understand, while a dealership may be privately owned (and I’m speaking about franchise dealers, not B or C lots), like with many other franchises, the property may be owned by the manufacturer. So, say Ford or GM owners the parcel of property the dealership is on, they have little or no control of what the dealer may be doing on it. That said, as many may already know, the manufacturer chargers the dealer not only for the inventory they purchase, but they also charge them for the days that inventory sets on the dealership lot, since they own that parcel of land/lot! In a since, not having inventory both helps and hurts the dealer. With not inventory, the dealer/salespersons have nothing to sell to walk-in customers, but they also are not being billed by the OEM for the inventory that is taking up space on the lot, either! So, IMHO, Ford and their dealers have an opportunity to be creative and build a hybrid system, if you will. Take the advantages of being local and in the neighborhoods of most of their customer base, unlike most Tesla stores and that of many upstarts, yet then still being able to provide valet service to customers. Being in the neighborhood, salespersons can still offer test drives and answer questions, providing local human touch and point of contact for the potential buyer and customers. Then, both OEM and dealer can get out of the discount, cash incentives race! Because the vehicles are built to order, the OEM is only building the vehicles a buyer wants and are more likely to pay the asking price for the vehicle that they ordered. The dealer/salesperson isn’t then pressured to move the metal on their the lot, for they know that all the vehicles that have come in are already spoken for and all they are doing is scheduling a delivery date for the buyer! They can still offer protection packages for tires, rims and especially the electronics/electrical system that come with the vehicles, as well as subscription and connectivity services and other special promotions! This type of approach could work great for the OEMs, the dealerships themselves and customers, but it would cut at those salespersons that are in it to make a fast buck off the customer, at the manufacturer’s expense!

  21. Wim van Acker Says:

    @16 There is no need to feel sorry. It is not too difficult for me to understand. “What looks promising in the lab rarely makes it into production” is simply untrue: I live in the U.S. with advanced mobility, nuclear power, solar power, aviation, aerospace and so on around me.

    Do you live in a cave?

  22. Wim van Acker Says:

    @16 There is no need to feel sorry. It is not too difficult for me to understand. “What looks promising in the lab rarely makes it into production” is simply untrue: I live in the U.S. with advanced mobility, nuclear power, solar power, aviation, aerospace and so on around me.

    Do you live in a cave?

  23. GM Veteran Says:

    12 – Couldn’t agree more. I would love to see the data Farley is looking at. Seems like he is looking to the dealers to help make Ford EVs more competitively priced to the consumer. The OEMs have reduced the profit margin on new vehicles tremendously over the last 15 years. Leaning on them now for more savings makes no sense and won’t benefit Ford, aside from reducing the consumer’s ultimate cost and making a Ford EV a better deal vs a competitive make like Tesla. The Ford dealers might just tell Mr. Farley to keep his eyes on his own work.

  24. GM Veteran Says:

    wmb – you make some interesting points. However, unlike some other franchise businesses, the auto manufacturers do not own the land the dealerships are on, with only a very few exceptions in extremely high cost markets like Manhattan. During my career with GM I called on more than 200 dealerships. None of them were on land owned by GM. While the OEMs will often help facilitate sales of dealerships from an outgoing dealer to a new dealer, they do not usually have any financial involvement.

  25. rick Says:

    i think the mahle pre-chamber jet ignition system is a missed opportunity on chevrolet 2.7L 4 cylinder truck engines

  26. George Ricci Says:

    21. I live/work in Silicon Valley.

  27. Kit Gerhart Says:

    To a customer, dealers are a benefit in two ways. They perform warranty work, and they take trades. Most U.S. states favor dealers over private sellers, by charging sales tax on the “difference,” rather than the price of the new car.

  28. wmb Says:

    #24.) While not having the years of experience of you sir and I mean no disrespect. Maybe the dealership rulers are a little different here, in the state Michigan. Where I have had the privilege of purchasing vehicles from varies Ford, Chevrolet, Chrysler, Honda and Hyundai dealerships. For over 20 years I have worked for two municipalities which, from time to time, I have had to speak with to those who were in charge, at a few of the dealerships operating in the cities that I have worked. With the exception of the Hyundai dealership (which was apart of a local, mega dealership franchise network, which has over 17 dealerships and operating a number of different domestic and foreign brands throughout state), each of them (whether I was dealing with them either personally or professionally), had at one time or another, mentioned that the property was owned by the OEM, but franchise was owned by the person who had the name on the marquee! During the times I was at a number of the dealerships to make a purchase as a private citizen, when it came time to speak incentives, to a fault, the salesperson would go on about how long a vehicle was at the dealership and the need to move the metal. Why some vehicles came with some financing deals and others didn’t! The vehicles that moved quickly off the lot were closer to MSRP, but the others, to move them faster, had much greater cash on the vehicles hood. That the dealers were being charged by the OEM who owned the property per day, per week, per month, for every vehicle on the lot that was not sold. Every parking space an unsold vehicle occupied, they would be charged for it! At each dealership, a version of this was told to me. Maybe this was just ‘salesperson speak’, to game the customer. But, i could see the Big Three strong arming the dealerships to more inventory, especially in the 80s, 90s and early 00s. Now, the OEM could have been charging the $1 or $1000?! I don’t think it was too much, but it was enough to serve as an incentive to sell vehicles as quickly as they came in! On the professional side, when there were requirements that the dealership had to address, one of the biggest push backs were that, while they could see what needed to be done and was willing to do what was asked, since it was not their property, they would have to reach out to the entity that the OEM had in place to deal with issues pertaining to there properties! That entity usually respond very quickly and more than willing to live up to what was being asked of them. All that being said, at least in Michigan, not having inventory at the dealership could save the dealership money, if what I was told was true. Not having to incentivize vehicle purchases, with no doubt make more money for the OEM! As someone else said, there is a destination charge on every vehicle sold, which bills the customer the amount it cost the OEM to transport the vehicle from the plant where it was assembled, to the place it was purchased. Whether they know it or not, tesla does the same thing for all of its purchases! So, I believe there is an opportunity for Ford and his dealerships, to come to terms and establish something that could work best for both of them. The dealerships/salespersons that would be hurt the most, are those who like to do big mark ups way over MSRP.

  29. Lambo2015 Says:

    My take on the dealership model is it will eventually evolve into Brand service centers. I could see EVs being ordered financed and registered all online. Have the vehicle actually delivered to your door like CarMax does or maybe having the option to pick up at the service center. But honestly there is very little value to the consumer for a salesman. The generations today are much happier making purchases online and give very little value to the personal interaction provided by a salesperson.
    There isnt anything a current dealership sales office does that could not be replaced by a good website and online hotline to answer questions. For dealer add-on’s like running boards or specialty wheels or warranty repairs can all be handled by the service center as people will still need service for regular maintenance and collision repair. The sales side is a dying profession and I foresee all the basic brands going this route with maybe the exception of Cadillac, Lincoln, Lexus, MB, BMW etc.. However home delivery may be considered a nice feature for even the luxury brands.

  30. Kit Gerhart Says:

    28 At one time, “destination charge” was actually related to how much it cost to ship the car from the assembly plant to the dealership, but now, it’s the same, whether the car goes to a dealer next door to the factory, or 2500 miles away. Maybe it’s more for cars going from the U.S. mainland to Hawaii or Alaska. Does anyone know?

    I find it interesting that the “destination charge” for cars from Europe is often less than for ones from Kentucky. Maybe the boat ride is factored into the base MSRP.

  31. Bob Wilson Says:

    Nothing about ‘build quality’ in the After Hours on commercial EVs. Are they perfect or something else is more important?

  32. Dtoma Says:

    EV’s adoption may slow due to recent advancements in CO2 capture and conversion into clean burning synthetic gas diesel. Already may be on par with current prices. Also great progress in hydrogen low pressure high volume storage since the military has allowed the use of the technology. People tend to focus on the EV without considering all of the energy, fossil fuels and emissions to actually produce these vehicles/batteries.

  33. Lambo2015 Says:

    30 Kit they take destination costs for the entire country and average it. So that people out west and down south didnt have to pay more simply because they lived further from the assembly plant. (when they were mostly in the midwest). So yea I will pay the same destination charge for a vehicle built 30 miles away as someone in AZ thats 2500 miles away. I guess it fair.

  34. JWH Says:

    30/33 – Years ago I also heard that the destination cost also included the cost to ship components from the supplier plants to the OEM assembly plants, & as already mentioned it is averaged so all customers pay the same destination charge.