AD #3533 – Lithium Prices Crater In China; Ford BlueCruise Spanking GM Super Cruise; Hyundai-Kia Tow Hitch Harness A Fire Risk
March 24th, 2023 at 11:58am
Listen to “AD #3533 – Lithium Prices Crater In China; Ford BlueCruise Spanking GM Super Cruise; Hyundai-Kia Tow Hitch Harness A Fire Risk” on Spreaker.
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Runtime: 9:43
0:00 Ford’s Business Unit Profit Walk
1:12 Why Ford Model E Is So Deep in The Red
2:20 Ford Says BlueCruise Spanking GM Super Cruise
3:56 Zeekr Unveils Sliding Center Screen
4:42 Lithium Prices Cratering in China
5:27 CATL Skeptical of Solid-State Batteries
7:07 VW Group Could Bring Cupra To North America
7:50 VW Pledges 15 Years Support for Android Auto
8:16 Hyundai-Kia Tow Hitch Harness A Fire Risk
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FORD’S BUSINESS UNIT PROFIT WALK
As we reported yesterday, Ford is changing how it reports its financial earnings. Instead of doing it on a regional basis, like North America, Europe or China, it will report by three business units: Ford Blue, which is its ICE business, Ford Model e, which is its BEV business and Ford Pro, which is its commercial trucks and vans. And now we’ve got some pro-forma ideas of how those units did over the last couple of years. In 2021, Ford Blue made a $3.3 billion profit. Ford Pro made $2.7 billion. And Ford Model e lost $900 million. Last year Ford Blue made $6.6 billion, Ford Pro made $3.2 billion. And Ford Model e lost $2.1 billion. This year Ford Blue is expected to make $7 billion. Ford Pro should come in around $6 billion and Model e will lose $3 billion.
| FORD BUSINESS UNIT EBIT PROFIT | |||
|---|---|---|---|
| 2021 | 2022 | 2023 | |
| Ford Blue | $3.3 B | $6.6 B | $7 B |
| Ford Pro | $2.7 B | $3.2 B | $6 B |
| Ford Model e | -$900 M | -$2.1 B | -$3 B |
WHY FORD MODEL E IS SO DEEP IN THE RED
Obviously, those are not good numbers for Model e, but here are a couple of things to keep in mind. Ford is investing heavily in EVs right now, especially with the giant manufacturing complex in Tennessee that it calls Blue Oval City. That plant will not even come on line until 2025, so the costs are piling up before it even makes its first electric pickup truck. By the way, internally they refer to that truck as T3. Ford says that by the end of this year its EVs will be close to making a contribution margin, which means they take all the revenue generated by their EVs and subtract all the variable costs like materials, warranty, and freight. Whatever money is left over is the contribution margin. By 2026 Ford says it will be building 2 million EVs a year and that Model e will generate an 8% EBIT margin. And because it will now be reporting all these numbers publicly we’re going to know every quarter if it’s making good on its promise.
FORD SAYS BLUECRUISE SPANKING GM SUPER CRUISE
OK, let’s keep the spotlight on Ford for the moment. It claims it’s kicking GM’s butt when it comes to selling hands-free driving. We’re talking Ford Blue Cruise versus GM Super Cruise. Sammy Omari, the executive director of ADAS at Ford, tells Autoline that last year only 40,000 customers bought GM Super Cruise, while 180,000 customers bought Ford Blue Cruise. He claims that Ford’s system is half the cost of GM’s, and that Ford customers are doing more hands-free driving. We reached out to GM for comment, and while they didn’t dispute Ford’s numbers they pointed out that GM will have SuperCruise available on 22 models globally by the end of the year. All I can say is that you’ve got to love the intense rivalry between these two cross-town competitors. They just love to put a boot in the other guy’s face every chance they get.
ZEEKR UNVEILS SLIDING CENTER SCREEN
It wasn’t that long ago when automakers used to brag about how many cup holders they had in their cars. Today, it’s all about how big their screens are. Geely’s premium brand Zeekr is showing off a giant 14.6-inch screen in its upcoming model X. It’s mounted on a rail, so it can slide between the driver and front passenger. And it has a plug for a game controller to play video games. The Zeekr X is equipped with a 66-kWh battery, which provides 500 to 560 kilometers or 310 to 348 miles of range, depending if you get the RWD or AWD version. And Zeekr will officially unveil the X next month.
LITHIUM PRICES CRATERING IN CHINA
Lithium prices in China are plummeting. They’re down 34% over the last month and are half of what they cost in November. Lithium is now going for about $17 a pound. Analysts expected prices to come down, but not this fast. And it’s all because sales of EVs in China, while still growing, are not growing nearly as fast as they were before. You know that price war that Tesla kicked off? Well it’s not just with EVs. Now, car companies are cutting the prices of their ICE cars, and that’s luring customers away from electrics. Lithium prices are also falling in the US and Europe, but not nearly as fast as they are in China.
CATL SKEPTICAL OF SOLID-STATE BATTERIES
But if you’re a battery company, what are you going to do? You’re going to keep on making batteries. And CATL announced it’s going into mass production with a new battery chemistry it calls M3P. CATL isn’t saying a lot about these batteries except that they have more energy density than lithium iron phosphate batteries and are cheaper than nickel cobalt ones. It says M3P will deliver a driving range of 430 miles or 700 kilometers, though it didn’t specify the size of the pack or in what kind of vehicle. But if a typical EV has that kind of range it will be a game changer. One other interesting note. Robin Zeng, the CEO of CATL, says they don’t see a technically feasible way to make solid state batteries that are competitive with what it has now. Now, maybe that’s a self-serving comment. But when the biggest battery company in the world says it doesn’t see a way to make solid state batteries viable, we should at least pay attention.
VW GROUP COULD BRING CUPRA TO NORTH AMERICA
The Volkswagen Group might bring yet another brand to North America. It already has VW, Audi, Porsche, Lamborghini, and Bentley, and in 2026 it will launch Scout. And next on the list could be Cupra. That’s the premium brand of Spanish automaker SEAT, which is part of the VW Group. It wants to jump into the North American market by 2030, with electric vehicles based on the VW Group’s next-gen SSP platform. Cupra’s CEO says he believes Americans will love the automaker’s design and performance but they don’t want to launch vehicles just yet because it need to establish the brand in Europe first.
VW PLEDGES 15 YEARS SUPPORT FOR ANDROID AUTO
Android Auto and Apple CarPlay are a great way for drivers to use their smartphones while they drive. But cars last far longer than phones, which means the car’s infotainment system could be wildly out of date in just a few years. That’s why Volkswagen is pledging to support Android Auto for 15 years, which is what it considers the lifetime of a vehicle.
HYUNDAI-KIA TOW HITCH HARNESS A FIRE RISK
We’ve seen automakers have to tell owners to park cars outside because of engine or battery fires. But this is a new one. Hyundai and Kia are telling more than 570,000 SUV and minivan owners to park their vehicles outside and away from structures because the tow hitch harness can catch fire. You heard that right, the tow hitch harness. Apparently, a short circuit can occur if water leaks into the hitch’s circuit board. Poof, it can go up in flames! So, Hyundai and Kia are telling owners to park outside until they can get fixed. This includes the Hyundai Santa Fe, including the hybrid and plug-in hybrid and the Kia Carnival.
But that’s it for today’s report, thanks for watching and have a great weekend.
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Comments (16)
March 24th, 2023 at 12:31 pm
Wouldnt parking it outside allow water to enter the hitch harness more easily than if parked in the garage?
March 24th, 2023 at 12:45 pm
So let’s see Ford made or predicts to make 17B on Blue by the end of the year another 12B from Pro and LOSE 6B On model e. So what happens when that big E factory finally starts up and no one is still buying them ? Are they going to keep throwing good money after bad to appease the green terrorists ? 2030 2nd 2035 are not that far away and unless governments completely ban all ICE including those that currently exist There is no way this will do anything but bankrupt every company.
March 24th, 2023 at 1:00 pm
1 The fire would be more likely to spread to the garage if the car’s in the garage. I suspect that is the reason for the recommendation.
March 24th, 2023 at 1:30 pm
@2 Why would nobody buy Ford e vehicles when they start up their plant?
Ford invests to appease its shareholders, not green terrorists, whoever those may be.
March 24th, 2023 at 2:09 pm
@4 Look at the current take rate on EVs on this very board it has been reported as anywhere between 1 And 6 % and that is for ALL producers. If that doesn’t dramatically increase Either by natural or forced means they will lose their shirt. Green Terrorists are the Greta Thunberg’s of the world trying scare and threaten everyone into this eco-nirvana all the while ignoring that China pollutes at a rate worse than us and are building 2 coal power plants a week , Have the 2nd biggest economy ,but are considered a Developing nation and therefore exempt from the Eco standards that western nations are held to. If they were serious about climate and pollution they would hammer the hell out of China and India which have next to no standards . The faster everyone realizes the only green that they worry about is money (yours) the better off we’ll be. Bring every nation up to the highest standards regardless . Pollution is pollution it isn’t any cleaner because of a geographic boundry.
March 24th, 2023 at 3:11 pm
5 Don’t 3 or 4 of the “regulars” here have EVs? I’ve heard a Model 3, two Mach-Es, and a Bolt or two mentioned. That means commenters here have a much higher take rate for EVs than the national average.
March 24th, 2023 at 3:44 pm
6. I will agree with you. Although we have had our Bolt since spring 2017, every week in casual conversation with strangers (small town) I come across a person who has never heard of the model or that there are electric cars. And that’s not surprising. I understand there are people who watch American football instead of hockey! Imagine that.
March 24th, 2023 at 3:49 pm
I would like to think that 120 years ago there were probably a huge percentage of people that were quite adamant that they would never trade their horse and buggy for a gas powered buggy. Well, all those people are gone now and in 50 years all the people that say they will not give up their ICE vehicle will be gone and forgotten also. The future has a way of coming whether you like it or not.
And just for clarity I am not an greeny. I currently drive a F150 & F250. But I will buy an electric when I can finally go to a dealer and get one off the lot without being robbed.
March 24th, 2023 at 4:00 pm
@5 the take rate on this board is statistically irrelevant. The U.S. market is just 10-15% of the global market so is a factor but not a major factor, either.
China’s argument is: “80% of greenhouse gases built up have been caused by Europe and the U.S. while they became rich. Don’t tell us that we have to stay poor after you have polluted the planet. We want a transition phase during which we can build up wealth.” A valid point in principle as far as I am concerned. The cut-off point is key, of course, so I hope that our representatives negotiate well on our behalf. In the meantime China is aggressively building up a green energy industry: after we have invented solar panels they have become the largest producer of those panels. They have three times more installed wind power generating capacity than we do and continue to build rapidly. Their own OEMs are 100% BEV. And so on.
In the meantime we have a significant part of our population in denial of climate change and our precarious oil situation. Producing 18% of world oil production while having 2% of proven global oil reserves under out land and water will be our downfall IMHO. The major oil reserves are in hostile countries’ hands with the exception of Canada, but Canadian oil production lies with privately and publicly held companies which sell to the highest bidder to maximize their shareholder value.
Dream on, XA351GT.
March 24th, 2023 at 4:53 pm
9 …and most of Canada’s oil is from tar sands, which uses a lot of energy just to get out of the ground and process.
March 24th, 2023 at 5:05 pm
#2, 5.) If I’m not mistaken, the reason Ford is building the ‘E City’ plant, is due to the fact that they can’t build enough Lightnings at it current plant. The have deposited for the Lightning that stretch’s years, with this new plant intended to reduce some of that pressure, as well as to be the introductory point for the next generation of the Lightning! Add to that, they are supposed to be doing a full-size SUV from the Lightning platform and the new plant will no doubt be the home for that vehicle too (and probably BEV versions of the F-250 and 350 as well)! So I don’t question there being demand for vehicles from that new plant, but think that their build estimates may be on the low side. What it seems to mean is that when the “E” side starts to make enough money to support itself, Ford I’d projecting that it will make about 3B dollars in its first year. Or about as much in profits, or more, as the “Blue” side did just a few years prior! What is even more interesting is that, when you compare that (and again I know we are talking estimates and we’ll have to wait and see if this actually happens) with Tesla, the Model S had been on the market for 7-8 years, the company began to make a profit just selling vehicles alone. If Ford’s projections hold true, it seems that they may have started earning a profit from their EV sooner, while not selling emissions credits, as Tesla did in the early days to stay afloat. Tesla was then as still is now, the King when it comes to stocks and the cost of its shares. Again if the projections hold true, it shows the potential benefits a legacy OEM may have over startups, with their manufacturing experience and expertise, as they begin to build EVs on a large scale. While upstarts may be nimble and not have to relearn, or unlearn, processes so as to move/respond more quickly, they don’t have the manufacturing background that established OEM’s have. The next several years are going to be exciting times for legacy auto makers, as well as new upstarts that are just entering the auto motive market. Tesla is still turning the auto industry on its head all over the world, and it will be exciting to see how automakers the world over will respond to these new challenges!
March 24th, 2023 at 7:55 pm
John,
Good seeing you on Daily!
Comment: Who cares about Cupra? Looks just like all the other BEV CUV’s! Tell them to park it in Europe! LOL.
March 25th, 2023 at 8:33 am
could the fact that the price of lithium is coming down in China, be as a result of the country’s leadership playing a role in its fall? With so many looking to invest in mines and battery plants in places around the world, especially in the US as a result of the IRA, could the price drop in China, be an attempt to lure organizations (back?) to them as a lithium source? For it may be cheaper to buy lithium from China, then to build and plant or mine for it else where? If the battery pack is anywhere from 1/3 to 1/2 half the price of an EV, if they could sell an OEM lithium that reduces that cost to 1/5 or 1/10 the cost, would it be enough incentive to buy from them? At that cost, even if your product couldn’t take advantage of the IRA in the US, it might be still competitively priced in the in the states, yet cheaper than the competition sold around the rest of the world?! So OEMs like Geely, for example, their product built in China and use Chinese lithium, but sold in the US might not get to use the IRA, yet they are only a little more expensive then those that do, but those same products sold in the UK, the EU, Asia and Canada, could still have a price advantage over their competitors in these parts of the world? Whether this is or any of the other things mentioned are possible, I don’t know, but it’s just interesting that as soon as there is all these moves to build batteries and resource the materials outside of China (where a lot of these things were gotten from in the past), now the price of a major component of modern batteries nose dives in that country. it just seems all too convenient.
March 25th, 2023 at 10:07 am
#5 – Buying a car with my money is a personal decision. So I traded in my last Prius to pay $24,000 for a 2019 Tesla Model 3. I wanted to drive safely, cheaply, and with AutoPilot automation. Having driven 101,326 miles over 4 years, the Tesla has fully met my expectations.
The expected 8.3% battery wear, 220 mi down from 240 mi, has been compensated by improvements to both car and Superchargers. Older 120 kW SuperChargers have been upgraded to 150-250 kW and their numbers doubled. Better still, the car 100 kW peak charge rate is now 170 kW. Free charging around town and at motels makes most town and some highway miles free … do ICE cars get free gas?
Maintenance is mostly washing the car and adding windshield washing fluid. Missing are oil changes, air filters, hydraulic fluid, belt, PVC, spark plug, and exhaust system. There is no ‘sealable’ catalytic converter. As for repairs, Satellite fixed a small windshield crack. Tesla mobil replaced the 12 V battery in my driveway. Furthermore, I have bought repair parts from Tesla and added a 2″ receiver hitch.
On the quality of life, we don’t have to raise our voices when talking. There is no vibration or warm-up. Scooting across the intersections first and reaching the speed limit 100 yards ahead of traffic means getting lane choice. Autopilot easily handles Las Vegas rush hour traffic at night on 12 lane freeways while Full Self Driving navigated the Las Vegas cow-path streets.
So #5, I don’t care who buys other vehicles with their money. My EV, a 2019 Tesla Model 3 Standard Range Plus, has fully returned value and exceeded my expectations. Except for the noise and exhaust stink, other cars are to their owners what we used to say about chastity, its own reward and punishment.
March 25th, 2023 at 11:25 am
14 Do you still have your i3, or have you sold it?
March 27th, 2023 at 11:02 am
8) What made the horse and buggy irrelevant was the cost of the car compared to the cost of a horse and buggy. Once the Model T came along and was cheap for the masses, the horse and buggy was irrelevant. Right now the world is awaiting the introduction of the EV version of the model T. Something that is at least the same price if not cheaper than an ICE and can do all the stuff, if not more, than the ICE. At that point the ICE car will be irrelevant.