Tesla’s Elon Musk Suggests Ford Will Not Survive Next Recession

NOV 3 2018 BY MARK KANE 271

Sparks on the Elon Musk / Ford line again.

It’s not a secret that Ford and Tesla/Elon Musk have occasional run-ins.

Maybe it started when Ford registered “Model E” a few years ago, basically stealing Elon Musk’s idea of having a lineup consisting of Model S, Model E and Model X and Model Y (for “SEXY”) – or maybe it started even earlier.

Regardless, while Tesla sales surge to record highs and the company becomes profitable, Elon Musk casts doubt on the financial condition of Ford, the only U.S. automaker to avoid bankruptcy during the last recession. In a wide-ranging interview with tech reporter Kara Swisher, Musk said:

“There’s a good chance that Ford doesn’t make it in the next recession.”

If plug-in electric car sales are any indication of what the future will hold, we are afraid Ford really will be in trouble.

Tesla sales in U.S. – October 2018

Musk mentioned Apple too, which is losing its luster.

“They still make great products, but there’s less of that”

Maybe it’s time to start selling electric phones? Wait… scratch that. Maybe Tesla should enter the mobile phone biz?

Source: Bloomberg

Categories: Ford, Tesla

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271 Comments on "Tesla’s Elon Musk Suggests Ford Will Not Survive Next Recession"

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Deckard Cain

Ford is the one doing the least from the three auto-manufacturers in the US. FCA doesn’t have a dedicated EV but at least the Pacifica is a great plug-in hybrid.

pjwood1

The Ram 1500 48v micro hybrid caught my eye, but looks pretty lame:

https://tinyurl.com/y7snleff
“The most efficient version the of engine is in two-wheel drive form, where the 2019 Ram 1500 eTorque V6 is rated at 20 mpg city, 25 highway and 22 combined. For comparison, the 2018 Ram 1500 with the 3.6-liter V6 and two-wheel drive is rated at 17 mpg in the city, 25 on the highway for a combined 20 mpg.”

Sam Abuelsamid dishes Tesla regularly, and praises Ford’s sustainability (which is queer). He likes the Ram:
https://www.forbes.com/sites/samabuelsamid/2018/01/15/2019-ram-1500-gets-standard-48v-mild-hybrid-on-all-gas-engines/#603e8aab7e9e Not sure I get it, but perhaps a few steps ahead of a Ford diesel inevitably having its filters ripped out, in a non-CARB state.

Deckard Cain

The thing is, FCA already has plug-in hybrids lined up for the Wrangler, Renegade, 500X, Giulia, Stelvio and I think even for the Ram 1500.
I think their only planned EV is for the Fiat 500 currently. But having so many plug-in hybrids is a great first step.

antrik

They are planning quite a bunch of BEVs as well in the next couple of years.

Dan F.

Ford does (supposedly) have a dedicated EV platform CUV vehicle coming in 2020(?) which is probably the right choice for a vehicle style to do first. I doubt that Ford’s ability to survive the next recession will have anything to do with its EV portfolio except perhaps for sales (though not necessarily cash flow or profit) in China. At this point, and for a good while to come, EV portfolios are and will be a drag on profits and cash flow for the established automakers. They do have to develop EVs and other technologies now for the long term but any profit from them is also a long way off.

menorman

Ford is almost certainly just planning to produce dabbling-level numbers in 2020. It won’t be enough by a long shot and they’re completely unprepared for Tesla, Workhorse, and others to eat into their truck sales. Plus, without sedans, they’re going to get absolutely crushed by the CARB ZEV mandate (as long as it survives court challenges), despite having less to offset as sales drop. Basically, Ford is a dead company walking.

Nick

Ford is extremely vulnerable to $100 oil with it’s almost all truck line-up.

TwoVolts

I think it could go a lot higher than $100/barrel. It was nearly $150 a decade ago when the world had more oil reserves and a lot less dollars in circulation. If the neocons get their war with Iran this time, I think it will easily hit $300.

REXisKing

The Trade ware with China is slowing Chinese growth and global demand, keeping oil lower.

Windbourne

FCA is not American. It is European.
And Ford is going a LOT more than Fiat.

Alaa Sadek

I agree with Elon. I also think that GM and FCA will not survive the coming dip. They went bankrupt before. It was Ford survived. I also think that if by 2020 any car manufacture in the world must have all of its fleet electric to survive. Otherwise they have no chance. Tony Seba Said this a while back. I now think that he is right.

Nono13

“I also think that if by 2020 any car manufacture in the world must have all of its fleet electric to survive.”

Seriously ? I could understand it for roughly 2025 but not 2 years from now when worldwide only 1 of 50 cars sold is not an ICE. (t may even be 1 of 80 or 1 of 100 cars).

Manuel

If you include PHEVs then market share for the year is already at 1,8% globally and it will only get better (much better) in 2019 and 2020.

https://insideevs.com/global-september-sales-electric-cars/

MoMac

It will get much better in 2020, but nowhere close to what would be needed for this absurd statement to be true: “I also think that if by 2020 any car manufacture in the world must have all of its fleet electric to survive.”

Pushmi-Pullyu

Right. It would be wildly optimistic to think that PEVs (Plug-in EVs) will be as much as 5% of the new car market outside China, only two years from now. To suggest that no auto maker will survive making less than 100% PEVs is absurd, or even beyond absurd. Not all of the large legacy auto makers are going to fail during the EV revolution. I think it’s even possible that most of them won’t, partly because governments will prop them up as “too big to fail”.

K L

That’s legacy thinking. If you think there’s a limited number of EV buyers, then sure Ford will be fine. But if you think the market as transitioning towards EV’s, then Ford is in trouble, because they don’t have many vehicles in the growing market and are only selling in the shrinking one. Current market mix doesn’t matter, since it’s actively changing and is currently constrained by the supply of compelling EV’s.

Uh huh

Except Ford has 5 new electrified vehicles coming in 2020.

Terawatt

Electrified is just a wieselword — it doesn’t mean anything.

Richard

So true!

menorman

That sounds about accurate for production levels which is obviously nowhere near enough. Call me when they have five “electrified” vehicles with at least 50k in sales planned.

Lou Grinzo

Please tell us what Ford (or any other Legacy) has in development that they haven’t announced or leaked.

No one here should fall into the trap of saying “company X doesn’t have a Z in its product lineup, so there’s no way they could add one quickly; therefore they’re doomed”. We don’t know what they’re doing behind the scenes. Maybe nothing, maybe a little, and maybe a lot.

Blake

In the absence of a statement from ford last year, my wife traded in her 2016 ford explorer platinum for a 2017 tesla model X. The depreciation on the ford was a bloodbath, but it was better than her trying to justify driving my model S each day. I hope ford comes around, I own alot of shares and wish them well… but they really need to step up their game.

Dan F.

You must be quite well off. The vast majority would just keep the Explorer or buy another comparable vehicle when ready (maybe it will be hybridized). Anecdotal “evidence” from a well off EV enthusiast (I’m one too) doesn’t say much about the general market. Obviously it is going more toward EVs over time, but EVs (and even PHEVs) are not close to offering the value for the money (especially for road trips and even more so post tax credits and rebates) that conventional (including hybridized) vehicles do.

ab

I think the most realistic expectation is that the luxury market will be around 30-50% long range, performance oriented BEVs by 2025, with most of what’s left being PHEVs. Maybe 5-10% of the mainstream market will be BEVs with 40-70 kwh packs, though I suspect battery supplies will continue to be constrained significantly for several years at least. Taking that into account, mainstream automakers might try to spread out their meager supplies by flooding the market with PHEVs. I certainly wouldn’t complain about that.

I think it will take until the mid to late 2030s before the battery supply chain really kicks into high gear. and manufacturers start churning out tens of millions of cheap 60 kwh+ BEVs. By then it will be difficult to find a non-PHEV car for sale outside of specialty niches.

antrik

You are seriously underestimating the ability of battery makers to increase production capacity. Just look at all the new factories announced for 2020.

Paul Smith

And batteries?

Pushmi-Pullyu

Mid to late 2030s? I think you’re being far too pessimistic.

Let’s remember that New York City went from being almost entirely serviced by horse-drawn vehicles to almost entirely serviced by motor vehicles in the space of about 13 years. I think the EV revolution will take place on a similar time scale. We can of course argue over just when that ~13 year process will start, but I think it started this year, with the ramp up of Model 3 production. Otherwise, the true start may not occur until 2020, when many legacy auto makers plan to start selling a broad range of PEVs.

Unless I am very much mistaken, the EV revolution should be more or less complete by the mid-2030s. You write as if it won’t even get a good start until then, or even later.

Alex


Please tell us what Ford (or any other Legacy) has in development that they haven’t announced or leaked.

How you do that? The moment someone says something not known to the public, it will become leaked information.

Tom Huffman

“That’s legacy thinking” is one of those phrases that sounds like it is making a good point, but is really little more than a slogan. There’s a big difference between “Ford is in trouble” (possibly true) and “by 2020 any car manufacture in the world must have all of its fleet electric to survive” (almost certainly false).

There is an unsettling amount of fanaticism in this hobby that I could do without.

scottydoesntknow

Well-stated. Anything except undying praise = FUD, apparently.

I agree with the general thrust of Alaa’s argument, if you move the year out to 2025 (bullish) or 2030 (more conservative).

REXisKing

I suppose the fanboy analysis comes from the reality of the vast superiority of the electric platform, especially in the luxury segment. The smoothness, responsiveness, and quiet of an electric are on another, much higher, level.

Every time I hear the starter motor of a gas engine car, I’m reminded just how primitive they are, aside from the need to have a polluting exhaust system.

You can pre-heat your luxury EV in your garage.
Once you go Electric you never go back.

Scott G

The tipping point is coming but no one knows when that is AND oil (gas) prices will be the primary driver. I have given many rides in my 3D and people are impressed but have converted no one. For whatever reason, the main factor most of those people care about is short-term cost and it is still way cheaper to drive an ICE. They dont look at it long term nor, for whatever reason, do they look at it from an environmental perspective )-:

Alaa Sadek

I ask you if they are not able to make EVs today and compete with Tesla, KIA and Hyundai etc then how will they do that in 2 years from now? Tesla alone is doing 60% of all the batteries in the world. What chance do the rest have? When I look at the mainframe computer companies and Apple and Microsoft etc. I wouldn’t have believed that DEC Equipment will die. But they did. So it will not surprise me if many car companies die.

antrik

DEC didn’t die. They got purchased by Compaq, which got purchased by HP.

Brian

Car dealerships won’t survive 2030. It’s not just ICE that’s the issue. So much of legacy auto’s business plan will be disrupted.

CarGuy

You nailed it! Most dealerships suck. All the ones that have 100s of stores are terrible.

J P DeCaen

Watch Rambo First Blood to see how best to escape the clutches of dealership salesman if cornered by them. The scene where he escapes the police station. I’m not advocating violence, just focus on a possibly brutal exit strategy. Except if you tell them you’ll only buy an EV. Then they’ll ignore you.

Pushmi-Pullyu

I think this is true. At least I hope so! An outdated business model that depends on a middleman who holds the true cost of a car as a trade secret, cannot long survive in the information age, when anyone can find out the true cost in a few minutes online.

MABUS

Market tendency is clear

Dan F.

I’d say 2040 is more like it.

SJC

By 2005 Ford had burned through most of the $25 billion they borrowed, their CEO told Congress we don’t need your money YET.

rey

LOL LOL

SJC

What is the LOL for?
Those are facts, either refute them with links or shut up.

rey

FORD IS A DEAD CAR CO. Agree or not?

Pushmi-Pullyu

No. It certainly looks like the patient has a terminal illness, but he’s not even on life support yet, let alone deceased.

Clive

LOL… Hey SJC where your links?

Pushmi-Pullyu

Was it 2005? I thought it was later than that, sometime around 2008-2010, when Ford told the government “Thanks for the bailout offer, but we don’t like the terms and we’ve decided we can survive without it.”

Clive

Yep right after unloading J-LR to India’s Tata Motors.

Nix

Yes, 2008-10 is more accurate. Ford was publicly saying they didn’t need any of the same bailout money that was publicly provided to GM and Dodge, while at the same time they were privately getting a $15.9 billion dollar bailout in secret. That bailout wasn’t publicly known until a bill was passed in Congress that mandated a public accounting be released.

https://jalopnik.com/5704575/ford-bmw-toyota-took-secret-government-money

On top of that, Ford also benefited from a $5.9 Billion dollar ATVM loan used primarily to bring a new line of engines into production, and Ford benefited from the “Cash for Clunkers” program. Both well documented, so no need for additional links. 25 Billion is a good rough number for all the programs all together.

noleaf4me

I think FCA is the first to go — also at least 1 of the Japanese brands (maybe Mazda or Subaru). Don’t coun’t out the Germans…….MB or BMW may cave as Tesla takes a big chunk of the high-end market….Oh yea — and Ford too…..I think GM will survive.

Victor

I think we all can agree that some of the Legacy automakers will fail as the transition from internal combustion engine to the more sustainable electric vehicles heats up. What is impossible to predict is who will succeed and who will fail. Looking back 8-10 years ago, if you had told me Tesla was going to be leading the pack in electric vehicles I would have laughed at you. Looking back, Tesla was made up of some technology guys in California who were trying to build an Electric car. I thought it would have been Nissan leading the Electric front. We look back and laugh at Mitt Romney when he made the speech that Tesla was among the failing companies the government tried to bail out, but back then it was no joke.

rey

GM will be “too big to die” , it will “DIE ANOTHER DAY”

Fool Cells

No company or bank or anything is “too big to die”. The best thing for any company is to go into bankruptcy. They will come up so much better.

Nix

You would think so, but the current US President recently claimed that car companies are a “matter of national security interest” when it came to tariffs.

Dan

Actually I think Ford is in worse shape than FCA when it comes to any kind of strategy and project
pipeline.

Chrysler did a plug-in Ram already. Remember that?

Clive

That is because Sergio finally let in to the realty of what is clearly ahead.

RIP Sergio Marchionne!

Dav8or

Of course you agree with Elon. To not agree with Elon won’t make you very popular here. While I think Ford could be in real trouble in the upcoming recession no doubt, what I don’t understand is why people think that Tesla wouldn’t go bust as well? They’re still on shaky ground financially and while that situation is improving, it’s not like Tesla has huge cash reserves to weather the storm with. One has to ask themselves, how well do expensive, big ticket luxury items sell during a recession? Traditionally not that well and that’s all Tesla has to offer.

There is a looming crisis out there similar to what happened last time. This time it’s sub-prime auto loans. Lots of people going in over their heads to buy F-150 Raptors, or top of the line Tahoes, or… even Model 3s. All it takes is a little trigger and the snowball starts. Once people start getting laid off and companies start going belly up, selling fancy gas powered pickup trucks is just as bad of a business to be in as selling fancy electric cars and fancy solar roofs.

Brian

You have to bring your own financing for a Model 3. You forgot about all the rich people in the world whose wealth is not tied to a job. They will keep buying Tesla, Porsche and Ferrari because they are more immune to economic downturns the pickup trucks.

Dav8or

Yeah sure. Are you saying that these are Tesla’s main revenue stream? Porsche and Ferrari buyers? I think not. It appears to me it more the BMW 3, Mercedes C, Audi A3 and even Prius and Civic buyers that are buying Model 3s that have actually made the company profitable. These are the buyers that will be minding their pennies in the recession, not feeling warm and fuzzy about a flashy new car.

Brian

No, wealthy people.

Pushmi-Pullyu

No, Tesla’s customers come mostly from the segment of the population which is (1) wealthy, or (2) merely middle-class buyers willing to spend far more on a new car than they ever have before, because Tesla cars really are that much better than other cars.

Segment (2) of Tesla’s customer base certainly isn’t recession-proof, but segment (1) mostly is.

Dav8or

OK, sure. Can Tesla survive the loss of segment (2)? I personally think not. They now need those people more than the wealthy people because it wasn’t until they offered a product that was in reach of the middle class that they actually started to make a profit. Model S and X sales as well as even Model 3 duel motor, performance versions aren’t enough to keep them afloat.

I know this because Tesla is already walking that fine line between being more inclusive and offering lower cost options while still trying to maximize profit with expensive versions. They need that lower income segment because the other is the famous “One Percent”. They are not great in numbers and once all that are interested in a Tesla have one, they won’t need another for several years. Tesla needs sales to keep rolling along year after year right now.

Believe it or not, they are still a little fragile right now.

gary

You ignore Tesla and Solar Roofs main benefit. They pay you back. The 150 just keeps eating more expensive gas.

Dav8or

OK, that’s cool, but how does this help the person during a recession when they’ve lost their job, or are worried about loosing their job?

Brian

Not sure who you are asking to help people. Ford should make better cars so people will want to buy them.

Dav8or

This is a nonsense reply and doesn’t even make sense in the context of the thread. This is not a thread about what “Ford should do”, but rather will Tesla survive an economic down turn any better than Ford? I will point out that Ford still sells more vehicles that Tesla by a multiplier of 3-4. So yeah, people still “want to buy them”.

rey

I think your average Tesla and BEV buyer are are a little smarter than your BIG Honking SUV buyer.

Dav8or

I think you’re full of yourself.

Pushmi-Pullyu

They certainly do appear to be, on average, better informed.

antrik

As far as I’m aware, an economic downturn doesn’t mean people turn to cheaper cars — it just means people hold off on car purchases across the board. So that alone wouldn’t put Tesla more or less in the same position as legacy makers.

What puts Tesla in a better position though is that they are still struggling to build as many cars as people want to buy (and it doesn’t look like this is going to change any time soon) — so a slump in demand would actually affect them far less than legacy makers that already have trouble selling all the cars they make.

Pushmi-Pullyu

History is pretty clear that during an economic downturn, economy cars sell better and luxury cars sell worse. That’s one of the reasons why putting the Edsel into production was such a bad decision for Ford; because the Edsel was a new luxury car that Ford tried to promote right in the middle of an economic downturn. “Hey, if we advertise the heck out of it, people will buy it even if they are worried they can’t afford it!” Well, as it turned out… not so much.

Pushmi-Pullyu

“…why people think that Tesla wouldn’t go bust as well? They’re still on shaky ground financially…”

I’ve noticed, from this and similar recent comments, that the serial Tesla bashers have moved their goal posts from “Tesla will never make a profit” to “Tesla’s finances are on shaky ground”.

But then, I’ve noticed a distinct drop in serial Tesla bashing here, since Tesla finally had a substantially profitable quarter, and looks likely to repeat that on a regular basis. Hmmm… it’s almost like most Tesla bashing was motivated by short selling TSLA stock… 🙄

Reality check: Tesla started selling its first fully mass produced car, the Model S, during a recession. Suggesting it can’t survive another seems to be ignoring history pretty firmly!

Dav8or

You really don’t get how business works, do you? Typically, when you get great big and revenue drops way off, it’s not good and not easy to survive. When you’re big, you have commitments and big bills to pay. You have people, talent and assets you want to keep. In short, you are less nimble to roll with the punches.

Oh yeah, you probably won’t have investors that are willing to throw money at you and not expect a profit for another ten years again either.

Jason

Ford had a Selective Default that no one remembers (I was a buy-side corporate bond analyst who predicted this back in 2002). So that Ford did not file for Bankruptcy protection is correct, but Ford got an SD rating for a forced debt tender.

“S&P’s Ratings Service, however, lowered its corporate credit rating on Ford to “SD,” or “selective default.” “

Source: https://www.sbsun.com/2009/04/06/ford-shares-up-as-firm-cuts-10b-in-debt/

Fool Cells

2020? No way, that is two years away. 2030 is more realistic. We have yet to have any SUV, CUV or Pick up trucks with a low price and long range. And once those first ones are available, it will take over a decade to change the buying public’s perception.

Windbourne

Ford really did not survive. They had the same bail-out package in terms of loans that they had.

joe

You know very little about the auto business when you say GM will not survive the next dip. I’m very close with GM and I know GM is in great shape….dip or no dip. GM will be coming out with many EV starting in 2019. Do a little homework.

BoltEV (was SparkEV)

If last recession taught us anything, it’s that there are companies too big to fail (aka, too well connected politically). Ford is one of them. OTOH, I’m not too sure about Tesla’s political connection. I’d hate to see Tesla fail, but it is higher possibility than Ford in time of recession.

islandboy
It depends on the circumstances surrounding the recession, I know the idea of Peak Oil has fallen out of favor with the continuing “fracking revolution” but, Peak Oil is a reality that will come to pass a surely as night follows day. It’s just a matter of when. When it is clear that global petroleum production is in decline, there will probably be steep price increases for petroleum and it’s products accompanied by a recession. Any company with large scale EV manufacturing at the ready when that happens will be well placed to survive since it is sales of gas guzzlers that will suffer the most. Peak Oil (globally) could happen within the next five years and if it were to happen as soon as that, companies that have not yet brought EVs to market, that they can make in large volumes, will be toast! I’d add Toyota to the high risk group as well. Companies that have years of EV development and manufacturing under their belt (Tesla, BYD and to a lesser extent GM, Nissan/Renault and Hyundai/Kia) should be far more confident of their EV prospects since their products will be backed by solid experience in the real world.… Read more »
gary

“Peak Oil” refers to demand, not supply. In all likelihood, countries now restricting production will reduce or eliminate those restrictions before demand tapers to maximize the value of the reserves still in the ground. This will likely result in dropping oil prices just prior to peak oil and continuing as supply continues to outstrip demand.

REXisKing

No, peak oil refers to supply. The Deepwater Horizon drilled down 2 miles under the surface of the ocean, in the Gulf of Mexico. If that isn’t a picture of a supply issue, then you won’t be convinced of anything. Also, Alaskan drilling? That’s a form in insanity.

Almost as a rule, all oil that’s left is expensive oil.

rey

Alberta tar sands are one of the most energy intensive fossil fuels to extract.

Troy

But it has to be said that the $75 price level is sufficient to productize all of it…

antrik

You are both wrong. “peak oil” refers to actual production. It *used* to be discussed in the context of production supposedly falling at some point because of reserves ending — but nowadays, it’s used pretty much exclusively in the context of demand slowing at some point, regardless of reserves. There is no reasonable doubt any more that reserves could last longer than we can afford to use them. As they say, “The stone age didn’t end because the world ran out of stones”…

REXisKing

Hasn’t Exxon reduced their CAPEX to find new sources of oil. That sets up by default, that oil prices will be higher with lower supply.

Pushmi-Pullyu

“You are both wrong. ‘peak oil’ refers to actual production.”

“Production” is just another word for supply, so why would you say that REXisKing is wrong? His comment is correct, and that’s not just opinion; it’s fact.

BoltEV (was SparkEV)

If Europe and Asia where gas prices are double and triple of US is any indication, “peak oil” is not going to affect ICE sale as much. And even if “peak oil” is true, it will take time for the effect to be severe enough. In that time, Ford (probably with gov’t bailout thanks to paid-for politicians) will make the transition.

But will Tesla survive a recession when people curb their “luxury car” buying, especially when Tesla is not buying politicians left and right? Tesla can’t even sell in some states because they are so incompetent in playing the political game.

REXisKing

US consumer’s have been price sensitive, enough to switch to hybrids, etc, at $4 a US gallon.

Most people can’t afford to ignore the vast savings in money, when a hybrid literally pays for itself in a few short years. While your neighbor goes bankrupt on gas expense.

BoltEV (was SparkEV)

I don’t know where you live, but I’m surrounded by giant SUV and trucks wherever I go. I did an informal survey while eating at a restaurant looking over busy intersection, and roughly 50% were trucks and SUV, about 10% what I consider fuel efficient cars (eg. corolla).

rgeniec

You must not live in California. You can’t swing a cat around here without hitting a Bolt, Volt, Or Tesla of any kind. My cousin in Missouri always told me that California is 10 years ahead of all the USA.

BoltEV (was SparkEV)

I am in SoCal. Noticing many hybrids, EV, etc. seem to be confirmation bias that I also suffered until actually doing the experiment.

ModernMarvelFan

If California is 10 years ahead, and less than 10% of the sales are PEVs, then how can the rest of the US be converted to 100% EV in less than 10 years?

Stimpacker

@rgeniec
Bay Area isn’t all of California.
I’m in NorCal and there’s trucks and SUVs everywhere. The big ones, not little Honda CRVs and Ford Rangers.

REXisKing

Like I said, in America $4 is the trigger for abandoned Pickup’s and SUV’s all over the highway.

Scott G

Most people are simply looking at short term costs. Fuel prices are a major driver in that equation.

Pushmi-Pullyu

“Tesla can’t even sell in some states because they are so incompetent in playing the political game.”

Here on Earth-1, unlike the Earth-2 bubble-world inhabited by a few far-right wingnuts, Tesla is making State-by-State progress in winning the fight for direct sales, despite the entrenched crony political alliance between State Auto Dealer Associations and State politicians.

Slow progress, but progress nonetheless.

Vexar
Election day is Tuesday, FYI. Maybe don’t follow the two-party lines, I don’t know what the solve is here. This is a credible concern. GM employs 180,000 globally as of last year and Ford about 200,000. Granted, those are global figures. Tesla, meanwhile, employs far fewer, maybe a 1/5th those numbers. Additionally, most states see their #1 financial contributors as automotive dealerships. There’s so much money and so many jobs making and selling GM and Ford (I don’t think FCA is going to fail) that as long as people still buy their cars and plants stay open and dealerships stay open, they will still be able to pull political strings. However, looking at Ford, the are “done” with passenger cars shortly and focusing only on trucks and SUVs from 2020 on out. Cadillac is, at least in the US, headed for Bob Lutz’s retirement home in the market. As more countries in the 2020’s to 2030 outright ban combustion either in major metropolitans or entire countries (Go Scotland!), it won’t be the recession that hits, it will be the lack of a viable product. Everyone here (myself included) needs to take time to meet with their congressional representatives and pitch… Read more »
Tim

Or, maybe follow the differences in the two parties. One tried to increase fuel efficiency standards and the other is trying to effectively get rid of them. And that’s not going to help American car manufacturers, because their cars will not be sellable in the rest of the world. The USA can think it will dictate these things, but it won’t. The real problem for the legacy car manufacturers is that it takes years to build a sustainable supply of batteries. Only VAG and BMW “might” be doing that, but they might be too late. Currently, none of them is taking the transition to ZEV as seriously as they need to – instead trying to delay the inevitable.

CarGuy

After Tesla completes the ramp of the Pick up, Ford will Fail. Plain and simple. Unless Ford builds a competitive all electric pickup. 5 years???

Ct200h

You need to look at the typical F150 buyer and rethink that . I don’t see huge numbers of joe the plumber types buying electric F150’s or Tesla pickups.
Fleet owners will buy phev pickups and some full EV pickups.

Andy

Average selling price of a pickup is around $30k, with the XLT being the most popular trim level (most fleets and contractors). Very few of those people are going to head out and pick up a $100k Tesla Pickup based off a Tesla Semi Chassis.

That’s assuming Tesla release and can build in volume within 5 years (probably earliest release being 2022) considering the Y will be released in 2020 at the earliest.

Ford will need to release a BEV pickup eventually, but a decent PHEV version being released in late 2020/2021 will probably be a better option for most of the above people until battery prices come down in price.

Kdawg

I dunno. Those truck-buyers are starting to get “hoity-doity”. It’s amazing how many trucks are now sold for over $50K, and even over $100K w/all the bells & whistles.

Pushmi-Pullyu

Yeah, I think it’s premature to pronounce Ford as DOA as soon as Tesla starts selling its pickup. In the first place, Elon has suggested the entry-level price for said pickup will be in the neighborhood of $50k. While there certainly are expensive pickups in that price range, most pickup buyers can’t afford that.

Secondly, as Elon admitted, the Tesla Pickup will have such a radically different design that many pickup buyers might find the style offputting.

And let us not ignore the reality that many pickup buyers wouldn’t be caught dead driving some “green tech” machine like a BEV. That attitude will change in time, but it won’t disappear overnight.

MoMac

“However, looking at Ford, the are “done” with passenger cars shortly and focusing only on trucks and SUVs from 2020 on out.”

That is specific to North America. Ford cars will be sold elsewhere, as well as Mustangs will still be sold in North America.

rey

What you are saying is WE the Taxpayers are willing to go for a BAILOUT #2, oh OK

BoltEV (was SparkEV)

If we approved tarp bailout and then another, we will again go for tarp 3, 4, 5, …, whatever the politicians say they want. And guess who has more politicians (both left and right) in their payroll, Ford or Tesla?

Some Guy
Too big to fail back in 2008 was a clear thing, as all three big vehicle manufacturers were struggling (and two went actually under). So it was either helping them or loose the entire industry. The oncoming scenario will have four big vehicle manufacturers, namely Tesla, GM, Ford and FCA, A worldwide recession will likely affect total vehicle sales, but ICE will get hit much harder than EVs, as long as EVs can still feed on the ICE marketshare, using their advantages of less fuel cost. US only recession is less hard on manufacturers that have a high share of export or production in foreign markets. Tesla will be thriving and still creating jobs in these scenarios. My favorite, the ICE recession, will see ICE sales plummeting while EV share rises. FCA is foreign owned and not likely to be rescued with US taxpayer money when in trouble this time. GM surely is big, but currently showing at least some effort and is in better shape than Ford, so it will last longer. Ford will run into trouble earlier than GM once the Tesla pick-up truck has ramped up production. A 10% decline in sales can get one of the… Read more »
Andy

That only really works if EVs are the same price (out the door) as ICE vehicles. Oil price generally decreases when there’s a recession as well so costs for fuel decrease proportionally. In the current market, where EVs are only really price competitive with more luxury brands it may well end up the other way round. Those people now not spending $40k on a truck/suv will drop $20k on an ICE Corolla, not $40k+ on a Model 3.

Will

So true. The industry collapsed would have cost a depression

Will

True. They can say that they didn’t take the bailout

pjwood1

What was the DOE loan, 5 billion?? Tesla borrowed under the same program, and look at the criticism they get.

Some_guy

Worth noting that VW has said they want to form a partnership with Ford to address electrification + autonomous driving

https://eu.freep.com/story/money/cars/2018/11/01/ford-volkswagen-autonomous-vehicles/1846528002/

noleaf4me

Yea – not out of the question — VW makes the cars, Ford the trucks. Match made in ICE heaven!

Rick

Good, Ford sucks anyway, won’t be missed. I like elon ripping them, serves them right for ripping Tesla.

Wineboy!

Kanye?

Mister G

Ford is going to have a Kodak moment LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP EARTHLINGS co2.earth

nuke

Oh, Ford the car!

I was hoping he meant Doug Ford, Ontario Canada’s mini-Trump Premier.

REXisKing

LOL. Probably a lot of Canadians would like to see the insane out of office.

Pushmi-Pullyu

Even more Americans would, for our home-grown wannabe dictator.

electron

the ford and chevy cash cow is full size pick ups and suv’s…..until some can make a compelling full size electric truck at an affordable price nothing significant is going to happen.

Carcus

PHEV f150 is on the way

Dan

I thought it was just a hybrid.

Mister G

A 50 cents spike in gasoline prices will make a lot of truck owners very unhappy and will slow down truck sales. I believe Iranian oil sanctions begin tomorrow let’s see what happens to price of oil going forward.

Carcus

My guess:
All the fear has already been built into the market. Now the reality sets in that Iran will continue to produce and ship the same volume , some of it now at a discount on the black market.

Net result: stable to lower oil prices.

But, OPEC (Saudi) could very well do a production cut after November… so….

/having said all that… the dominant story will continue to be demand growth vs aging field decline

electron

most of the volatility is the fund managers looking for a quick buck. if they think there is enough news reports to cause a spike in prices, they buy a bunch then quickly sell it 1% of a billion is a nice profit. there is a ton of untapped supply just waiting for the right price start producing, this is in part why price has been not too volatile like back in 2007-8, it is a bigger gamble now to buy a bunch and try to turn a quick profit.

REXisKing

I disagree. The market doesn’t seem to have the foresight of more than 5 days.

William

The major airlines hedge their fuel purchases, for increased price stability, well into the futures market. The average consumer doesn’t really have the same future hedging abilities, when it comes to pricing power at the pump.

Some Guy

Why would Iran have to sell oil on a black market of some sort? The sanctions are by US and the US allies in Europe. China does not care, they only smile about the discount they are now possibly getting as Iran can’t sell so many other places. Maybe Russia will also step in and take some. During the last sanctions, Russia bought lots of Iranian oil for domestic demand and exported Russian oil to the west.

William

India would gladly soak up any Iranian Oil that can’t find an international bidder or buyer, due to newly imposed sanctions by the current US administration.

stimpacker

I hate to say it, but @electron is correct.
Ford = trucks
Cars mean nothing to Ford.
In 2008, gas spiked to $4 rapidly and caused a consumer backlash. Now the “industry” has learned – no gas spikes at the mention of a distant possible tropical storm. Instead, like a frog in a pot, they slowly jack up the price of gas. Over here, truck sales are flying and yet gas is $3.50.
With dirty fracking, it is doubtful Iranian oil sanctions will have much of an impact on local gas prices.

I dare say that I am more skeptical than @electron.
Even the appearance of a full size electric truck might not dissuade your typical suburban cowboy. They like the sound of revving engines, large loud pipes, extra wide tires and raised suspension.

Jeff

Stimpacker, I wonder if it was the price increase in gas price, or the global economy crashing leading to less construction that resulted in the sudden decrease in sales of Ford trucks that year. But it has gone up year after year since then.

stimpacker

@Jeff
You could be right. That’s probably what happened at the macro level.
In my local (suburbia) area, what I saw was truck/SUV buyers switching over to more fuel economical vehicles. Now they’re all back to larger trucks and SUVs.
It’s just like the CA drought a few years back. I saw folks ripping out their lawn and putting in less water demanding landscapes. Now they are all back to lawn, thinking a drought will never happen again.

electron

this more or less is hitting the nail on the head……

most people don’t generally give a shiitake if it doesn’t affect them directly…

mass adoption of electric cars will only happen when they are cheaper than gas cars…..

REXisKing

Trump’s China Trade War has slowed the Chinese market, and therefore cut the price of gas globally.

esto perpetua

Everything is Trump’s fault, don’t you know?

Pushmi-Pullyu

No, but it’s not for lack of trying on his part.

REXisKing

So, true, under Obama the Republican Exxon would have gas prices at about $4.50 by now. Under Trump? $72 dollar a barrel for Brent Crude? And Gas is BELOW $3 a gallon????? Looks like Exxon is kissing Trumps rear.

silversod

Jeez! I wish! just fuelled two hours ago up at £6.19 /$7.91UK gallon.

esto perpetua

It reeks of a smoke-filled basement conspiracy. Tell us more…

esto perpetua

For decades the leftist theory was : “Republicans are in bed with big oil to keep oil prices high to gouge the little guy”. Now we have the exact opposite theory? Come on Liberals, make up your minds.

eferg

“… They like the sound of revving engines, large loud pipes, extra wide tires and raised suspension.”
Agree. There needs to be some cultural change added to the mix. Tesla would be wise to get some of their first trucks in the hands of influential people like country singers, macho actors, etc. Remember when it was cool to drive a Hummer?

Andy

While there are plenty of suburban cowboys most trucks are still driven by people that need trucks. If the bottom line is better for their company then they’ll buy EV trucks.

For many of the biggest fleets even a saving of $1000 over a few years would see them dropping ICE trucks like flies.

Economics is by far the biggest factor, and Tesla are going to struggle in the small truck market unless the produce one for about the same price as the base Model Y is predicted to be. If they do that then the Model Y will appear massively overpriced.

Pushmi-Pullyu

Tesla isn’t aiming at the low end of the pickup market. As I recall, Elon estimated the entry level price for a Tesla pickup at $50k. Yeah, that’s not the way to sell millions. But it’s potentially the way to sell as many Model S’s as they make every year, or possibly more.

Brian

I think if they can win at the boat ramp, Hell’s Revenge Moab, pulling 5th wheel trailers over a mountain pass and at the pump, EV pickups will win the heart of American’s. Tesla’s oversized alien pickup is the wrong approach. More Elon hubris.

electron

that won’t do it….gas will have to get to 5-6 dollars per gallon to really affect truck sales. a lot of people do need to space and hauling capacity of a trucking and can’t just give that up. but what will impact ev sales is where gas gets high enough to justify purchasing a cheaper ev for daily driving, and save the truck for when you really need it. the problem is when gas gets that high, the economy also slows down which will affect all new car sales, especially expensive ones like full size trucks and expensive ev’s.

Adam

That’s not true, trucks plummeted in value when gas prices hit $4.00 last time around. If we could just slap a $.25a gallon increasing yearly the market would correct quickly. We could use the funds to bankroll FEMA, they are going to need it.

REXisKing
How long will it take Republicans to connect the dots? This is why Repubs are a failure at government, far worse than Dems. Hurricane Michael, What was the Economic Damage? With a pure link to Global Warming. Continue to ignore the science and Republican leadership will always be in the F grade range in Economics. When you govern by highest bidder, usually the lowest innovator, protecting his current market against science, you’re running a Substandard Economic Policy. Sure, you can talk up the economy all you want on Fox News, and ignore reality, but these storms don’t watch Fox News. The real increase in ocean temperatures, yielding more energy into storms, is causing Major Economic Damage in RED STATE and RED DISTRICT America. Ignore Science and MAGA is and will always be a FAILURE. That’s just reality. Either you deal with reality or you’re a Failure with lasting consequences to the Republican party and the Nation. And giving up the Solar, Wind, EV and Battery industry to China Today, to protect dying coal, again: Yields an F in Economics. Your grade is FAILURE. So, how do Republicans start making policy decisions based on science when their policy making is set… Read more »
REXisKing

https://www.facebook.com/senatorsanders/videos/255985195064193/

BoltEV (was SparkEV)

Talk all you want about those evil wizard Republicans who you think can control the weather to causing hurricanes, but the reality is that black unemployment is lowest it’s been in history and economy booming. Crazy nonsense about Republicans is causing people to walk away from the Democratic party. I fear the mid terms…

REXisKing

I also note that Trump Totally Ignored the RED districts hit by Hurricane Michael. What’s up with that? Had it been Naples Florida, he’d have been there kissing rear, and pledging help.

noleaf4me

We need some Democrats in power to make that happen!!!

esto perpetua

Vote Democrat for a weak economy, high taxes and open borders.

Pushmi-Pullyu

Reality check: The U.S. economy added more jobs in every year of Obama’s second term than it did in Trump’s first year.

Presidents don’t actually influence the economy all that much. But if you must give credit to some president, then at least assign it where it belongs: the Obama administration.

https://www.washingtonpost.com/politics/2018/09/18/trump-economy-versus-obama-economy/?utm_term=.799d9f316493

I also don’t think much of the GOP’s method of ballooning our national debt by passing tax cuts which mainly benefit only the very rich, and benefit the middle class and working poor not at all. More class warfare with the very rich using Congress as their puppets.

Re “Open Borders”: Nice GOP talking point, but I don’t see anybody advocating uncontrolled immigration. Apparently if you’re a Trump supporter, you think it’s terrible that the U.S. was once known as “the melting pot” because it was a nation built by immigrants from many different regions of the world.

electron

hit 4$ coming from what ? 2 dollars…….now we are used to 3-4 $ gas, so it will take more than a .50 cent bump to rattle the market, it takes a near doubling of current prices to really shake things up……but I am pretty sure neither of us are credentialed market economist, so take what either of us has to say with a grain of salt….

I still think I’m right though 🙂

BillT

The “pickup truck” market is really two markets:
1) Businesses and governments that need a pickup truck
2) The consumer market
For 1) I think once electric pickup trucks become viable from a total cost of ownership perspective they will do well. They will also be willing to buy aerodynamic trucks that forgo the brodozer look.

For 2), as others have pointed out it will be tough to convince some customers to give up their ICE. If Ford falls asleep at the wheel and miss the transition to electrification they will be in trouble but I think they have at least 5 years before battery prices get cheap enough for the 200 kWh to 400 kWh packs required to make electric pickup trucks that rival F150s/F250s for range while towing.

Brian

Truck values will plumet the way SUV values did with $4 gas. Still see plenty of Hummer H2 driving around being used as landscaping maintenance work trucks.

Lampsau

The problem Ford has is that they are becoming increasingly reliant on selling trucks to baby boomers. I believe the last time I checked, the average age of F150 was around 60 years old and increasing. As the boomers continue to shrink as a generation they will have to convince the younger generations to purchase trucks.

antrik

Economic recession will hit Ford no matter whether their cash cows are endangered by EVs…

BoltUp

Coming round to agreeing with Elon on Ford, though there brand is so ingrained in US history I find it hard to believe they would disappear. There current ICE centric focus really sucks, hope they have an electric pickup hiding somewhere.
As to Apples diminishing luster, think that’s a real issue for Tesla, they hang so much on an erratic Elon that now they are mainstream they need to control the visuals more, which Apple does well.

David Cary

You mean like Sears, Kmart, JC Penney, Kodak. I am sure I am missing others.

antrik

Nobody suggested Ford would disappear… The remark was about going bankrupt, like GM and Chrysler did in the last economic crisis.

TM21

If Tesla starts diverting pickup truck sales from F and GM, I think that is really going to hurt their profitability.
Will be interesting to see the Tesla design choices for pickup trucks which were meant to get dirty, carry cargo in the back, and get some scratches and dings here and there.

DEE

Its going to be a while yet before anyone can get their hands on a Tesla pickup, and a recession could happen sooner. Elon is not sure how well the truck will sell since the first design looks totally futuristic like something out of the “Blade Runner” movie.

Terawatt

It looks almost the same as a truck from 50 years ago. Even the Nikola looks more futuristic!

Pushmi-Pullyu

Nikola will never put any vehicle into production, so who cares? At best they’ll only produce a prototype, and I think even that is questionable.

Brian

My ’15 CMax Energi has been in and out of the shop for two weeks now for brake systems (ABS, traction control, etc). They cannot seem to fix a system which is essentially the same as any other vehicle they make. And this isn’t the first time I’ve had issues with the car. My wife and I love the car as a PHEV, but neither of us would be heartbroken if Ford went bankrupt.

CarGuy

Have a cmax energi as well. Great car, no problems, 46k miles. Daily 30 mile range for me. The point is franchise dealers suck and lack training. Next car will be a Model 3. Both can haul a 10′ 2×4 with the liftgate or trunk closed.

Brian

Oh, we love the car. When it works. Seems we have gotten a lemon – it has been in the shop for half a dozen major things in 3 years. And every time it goes in, it takes WEEKS to resolve the issue. Love the car. Learning to hate the company.

Jon

Focus Electric crew for life!

phEVfan

Since they are now selling zero of them, that Focus is going to have to last a long time for you, ’cause you can’t replace it with a new one.

Joiicordero

Okay, it’s stuff like this that drives people away from wanting to buy an electric car / a car from Tesla. Elon Musk really needs to put his electric cars where his mouth is. Especially since they are one of the lowest ranking brands in quality according to Consumer Reports, even below Chrysler. I wouldn’t get so cocky about him making it through the next recession…

Greg

Safest cars on the road, Teslas. I value that more than a quality ranking based on arguably relevant metrics. When a dash board rattles, I can get that fixed. Ford and friends would give me a giant steel engine block that is prone to being shoved into my lap. If you are willing to take an engine enema because of a perceived social attitude about something, then I pity your decision making skills.

Lee Ramer

80,000+ Teslas sold last quarter and climbing. I don’t think anyone is being driven away. They also improve the quality of their cars every week. They also sell more than just cars, they are an energy company. They also have Panasonic collaborating with them and are the only company that has their own battery supply apart from BYD.
They also have financial billion dollar backers that will supply Tesla with more money of need be.
So I don’t think Tesla will have any problems making it through another recession. They made it this far without going banwupt and the hard part is over. Model 3 is now out there and when the base model hits next year they will be so far ahead of the legacy makers that it will be a blood bath. Looking forward to it.

Pushmi-Pullyu

Well said! Those who claim Tesla can’t survive a recession are ignoring reality pretty hard; Tesla starting selling the Model S right in the middle of one!

Terawatt
Maybe we can start taking about what is driving people away from EVs when the demand for EVs is nearly being met..? Tesla cannot yet make enough cars to satisfy demand just in the USA, an important market to be sure, but still tiny compared to the rest of the world combined. I do agree Elon would do better to focus on his own turf though. Not because anybody’s driven anywhere, but simply because he’s got too much on his plate as it is. But he’s addicted to attention. Personally I can’t wait for him to leave Tesla, preferably having been thrown out kicking and screaming. What he seems to be great at generating hype about himself first and his companies second. He’s wasted a lot of time and resources on various smoke and mirrors shows, and made numerous terrible decisions that have seriously slowed Tesla’s progress. In 2006 or so he made public the very simple and sensible three step plan of the Roadster, a $100k sportscar to change the perception of electric cars as toys or golf carts, WhiteStar, a $50k luxury sedan to make the money needed to set up large-scale production, and finally BlueStar, a $25k… Read more »
antrik

I’m sure under your leadership, making bland cars at a marginally lower cost, the company would have been vastly more successful…

Pushmi-Pullyu

Yes, and Terawatt’s “If you don’t realize that I’m right about everything and everybody else is wrong, then you’re an idiot” attitude would likely not be best for persuading people to invest in the company.

antrik

He wasn’t saying anything about Tesla making it through the next recession. He was talking about how incredibly hard it is to keep a car maker in business. But go ahead, judge him on a remark taken out of context…

Pushmi-Pullyu

“…they are one of the lowest ranking brands in quality according to Consumer Reports…”

No, merely one of the lowest in reliability. If Tesla’s cars were actually that low in quality, then the Model S would not always come out #1 on CR’s own survey for customer satisfaction, and the Model X wouldn’t score in the top 10.

But most of CR’s reliability testing is for far cheaper cars with fewer parts, so fewer things to go wrong. If CR compared the Model S and Model X only to other cars in the $75k+ price range, then they likely wouldn’t be “one of the lowest ranking” in terms of reliability.

Jeff

People forget the best selling Ford is probably the F150 and other F-series pick up trucks. They literally sold 896,000 F-series pick up trucks last year. None of those trucks are EV’s. 2018 sales are on track to beat 2017 numbers. Let us know when Tesla sells 900k vehicles a year.

noleaf4me

Probably 2-3 years from now — maybe sooner if they get their China plant up in running in 2019 as they hope.

esto perpetua

I’m long TSLA, but you are delussional.

antrik

Which part exactly? 2019 would indeed be delusional — but 2 years might be possible, and 3 is pretty certain.

Andy

Where are you getting that timeline from? Start of production is in 3 years (so late 2022/2022. They’re literally just starting to clear the land, let alone start building. 3-5 years is a reasonable timeline, one that’s from Tesla themselves.

Terawatt

Really. You’re referring to Tesla’s proven track record of accurate timelines?

antrik

Q3 earning letter says that they now hope to start production in 2019 — though initially with components imported from Nevada, and increasing local content only over time.

(As for reasonable timelines, VW just broke ground on their first Chinese EV factory a few weeks ago, and they expect to ramp production during 2020.)

Tim

Nice straw man. No one “forgets” where Ford’s primary sales are. It’s the whole basis of the discussion here, so nice try.

I wouldn’t get too wrapped up in the logic of “current sales equals future sales”. Markets change slowly and then very quickly. Ask BMW, MB, Audi, and Lexus about their luxury car sales in the US over the last few years.

Nix

Jeff — The issue here is not current truck sales in a booming economy that dates back half a decade. What is in question is what happens in a downturn in the future.

Please go back and review the sales numbers for large trucks for Ford/GM/Ram during the last recession/depression. Large truck sales were a blood bath, and even opened the door for increased Toyota truck sales, which have managed to grow from nothing to double digit percent of the market.

Tesla will be in the position that Toyota was in for the 2000’s, where Tesla will be in a position to grow into the market where they currently have zero share, while Ford would be back in the position of losing more share they way Toyota has managed to get their foot in the door where ALL of those sales would have otherwise gone to Ford/GM/Ram

esto perpetua

No, that “booming economy” doesn’t date back half a decade. It dates back exactly 2 years. I know, it is hard for some to admit it. It invalidates their whole worldview.

Tim

What a silly comment that is entirely non-factual. There’s data, so go look it up. More jobs were created in the last 20 months of Obama’s presidency than in the first 20 of Trump’s. That’s not hyperbole, it’s just plain fact. Just because you believe something doesn’t mean it’s true.

Pushmi-Pullyu

It would help if the actual facts did not utterly contradict every part of that. You need to get your facts from some place other than Fox News or Breitbart. Actual facts, not the “alternative facts” you seem to prefer.

Some Guy
And in 1905, stables were literally selling hundreds of thousands of horses every year in the entire US. There was a handful of cars in the country. 15 years later, people were buying cars in masses. Why? Because they required less maintenance than a horse and were the solution for a major environmental problem at the time, especially in the bigger cities: Streets drowning in horse manure. There are some more examples: Sales of typewriters increased more or less steadily from the late 19th century until the early 1990s. Peak sale was 1994, if I recall correctly. It went down rapidly after that. I know of only one small manufacturer that survived, and is now making typewriters for use by prison inmates that are not allowed access to computers. Kodak had 16 billion turnover and a marketshare of 80% in the US in 1996 in photographic films. Digital cameras were a curiosity with minimal market share. In 2001, sales dropped significantly and the management tried to slow adoption of digital cameras by aggressive marketing. The Asian competitors gained marketshare and Kodak finally became innovative, made big investments and by 2005 was market leader in digital cameras in US (but not… Read more »
Terawatt

You don’t think trucks suffer as much as cars in recessions…? The opposite is the case. When things don’t look so rosy even those whose economy is still in fairly good shape see the wisdom in saving. And they look for savings that don’t involve big changes in lifestyle — such as a vehicle that’s cheaper to use.

EVs are unlikely to be big winners during the next recession though, because they will be production constrained anyway for many years still, and therefore probably during the next recession. Smaller cars and hybrids are easier to switch to if demand goes up.

antrik

Nobody forgets what the best-selling Ford is. That doesn’t help their chances of surviving the next economic downturn, though…

Pushmi-Pullyu

One has to be pretty short-sighted not to see that just a few years from now, Tesla is going to be selling more vehicles per year than Ford.

Bill Howland

The tit for tat Tesla-Ford discussion is turning a bit ridiculous. While I question Ford’s decisions of late it is a bit premature to call for their Death.

Tesla, only recently profitable (according to some observers at least) would have much trouble during the next recession…… During that time, many – even today – cannot even afford an inexpensive NEW car, and that is why the Used Car Market is currently booming. Its not that people HATE new cars, its that they cannot currently afford them. Which will be even more so when the recession hits.

Tesla is in a particularly precarious position since they have no cars for sale anywhere near $40,000.

Its rather as when a very obese person has lost 10 pounds and now suddenly calls everyone else ‘Fat’.

As far as “Maybe its time for Apple to sell Electric Phones” (!!!!) – I have good news for the author….. Every Telephone ever made has been Electric.

antrik

As long as demand for Tesla vehicles outstrips their ability to make them, an economic downturn wouldn’t affect them much…

Also, there is no tit-for-tat discussion. That’s just some ridiculous spin put on Elon’s remarks by the writer of the article. In context it’s clear that there was absolutely no such intention.

Bill Howland

Musk said himself “…There’s a good chance that Ford doesn’t make it in the next recession.”.

Time to get some reading comprehension. But perhaps that is hoping for too much.

antrik

LOL… The irony of talking about reading comprehension while totally failing to understand the point of my comment.

Quiviran

It’s an easy analysis. Who can make their own batteries? They will survive the transition to EVs. The next recession will make people very cautious about how they spend their money and gas guzzling pickups won’t be very attractive. It seems like Ford is putting all of their eggs in one basket, pickups. A pretty fragile strategy. Part of Henry Fords strategy in the beginning was to pay his workers enough to afford his products. Off shoring production to Mexico and other places don’t make that happen and that strategy seems to be gone too. Didn’t have to be that way, but that seems to be their choice.

Gumby Koontz

the solar industry is not even installing more panels quickly enough to help meet the future demand from lots of more EVs even a couple years later.. The solar companies are not growing as fast as they should. What this will mean ???? more natural gas or even more coal coming back to help keep more EVs charged .. Greenwash!j Really ? yeah!!

Nix

EV’s charged with 60+% efficient modern large scale natural gas power plants is still way greener than gas or diesel vehicles.

It moves the pollution from being produced at body level on the same streets where we live and work, to the top of stacks further from population centers. Heck, even if that were the only benefit of EV’s, it would be worth it based on the number of lives it would save or help.

phEVfan

The solar growth due to EVs will follow EV growth, not lead it. Most EV buyers go solar at the same time or after buying an EV, once they realize 1) their power bill just increased dramatically and 2) that EVs on the grid are still polluting (though possibly less – depending on your locale). Yes, the early solar adopters are often EV buyers, but my observation is they are the outliers, not the norm.

Pushmi-Pullyu

Most EV buyers? I’ve see claims that as many as 30% of BEV drivers have a home solar power installation, but even if that’s not an inflated claim, it’s still a long way from “most”.

antrik

Installed solar capacity is growing *way* faster than the tiny additional electricity need for EVs.

Pushmi-Pullyu

Strange that there is so much discussion focused on Tesla Energy, which is only a very tiny fraction of Tesla’s business, and it’s a fraction which isn’t growing its market, mainly because very nearly all of the Gigafactory 1 batteries are going to cars rather than to PowerWalls or PowerPacks.

95%+ of Tesla income, and profits, comes from selling cars. That might change in the future, but it certainly won’t change overnight.

Trades46
This is kind of dumb for several reasons. Hilariously Ford & Tesla share lots of commonalities, but Ford still has an upper hand should a recession occur in the near future: 1. Tesla & Ford has not been doing well for the past ~5 years in terms of earnings (more losses than profits) 2. Tesla & Ford both have outstanding Q3 2018 earnings calls, beating estimates from analysts & raising share prices. 3. Tesla & Ford are both are eyeing China as a large scale project for the near future of development. Here’s the reason why I think Ford would weather a recession better than Tesla: liquid & capital free assets. Ford is still holding around ~36 billion USD with many more available assets from its division & also Ford Credit. Tesla has about ~2 billion USD on hand but most of their assets & Fremont are mortgaged. You don’t “win” a recession – you weather it. Sales would plummet, investors would close their positions, banks & lenders would close all doors for borrowing. You can count on no one but yourself, and that’s where Ford being a significantly larger company with more liquid & capital assets would survive, Tesla… Read more »
antrik

The entire paragraph about China sounds like you are grasping for straws…

First of all, Tesla has ~$3 billions in cash now. (Up from 2.2 in Q2.) More importantly though, it’s not the absolute position that matters, but rather cash and assets compared to spendings — and AFAIK Ford is in no better position there. (At least not significantly…)

Also, with EVs quickly gaining market share, even in a contracting overall market Tesla would still be in a good position — while Ford’s sales would be hit in full force. (In fact as long as Tesla’s demand is larger than their production, the market would have to collapse pretty much entirely to affect their actual sales at all…)

But perhaps most importantly, I’d like to point out that Elon’s remark wasn’t meant as a Ford-vs.-Tesla contest to begin with.

noleaf4me

Here’s the current rub — Tesla is having almost no impact on Ford or GM right now — they are hurting the luxury German and Japanese brands. Thus to F and GM — not an immediate threat. If they put out a reasonably priced Model Y and a pick-up truck — then F and GM will begin to feel the pain…..

Umangi Singh

About 50% of Model 3 owners traded their Ford, GM, or Toyota car for Tesla, so Tesla is definitely having impact on Ford, GM, and Toyota.

Pushmi-Pullyu

Hmmm, I think you left out Honda. The Accord was among the cars most traded in for a Model 3.

And while your claim that “Tesla is definitely having an impact” is mathematically correct, it’s also true that as yet, Tesla has had very little impact on the three auto makers you mentioned. It’s having far more impact on luxury car makers like BMW and Mercedes-Benz.

God/Bacardi

The only reason Ford didn’t go bankrupt was they received a nearly $6B ATVM loan…

Brian

Ford can’t survive $5/gallon gas without a full EV pickup in their lineup.

tftf

“Tesla and Ford were the only U.S. automakers to stay out of bankruptcy during the last recession. Next time, Ford may not be so lucky, he said” |

But $TSLA S / X and Roadster sales will be off the charts?! I’m sure people will line up for $100k+ cars in any recession.

And what about Tesla’s debt pile?!

More tales from Elon.

Tim

I like how you explicitly left the Model 3 out of your claim. Funny how that changes the math equation regarding Tesla’s ability to pay off its debt – which pales in comparison to Ford’s.

Chris O

More tales from the short community. Get with the program dude, many shorters are long these days.

Gumby Koontz
We will probably be likeyl to resurrect nuclear power when we buy many millions more EVs and drive them on the roads in ten years.. The solar industry can supply only a finite part of the growth in electricity demand. EVs will outrun the growing supply of clean energy from solar and wind.. that we will be forced to choose among natural gas, nuclear, and even clean coal to power so many more EVs not only in America but the whole world! Think again… Greenwash! Not only that… there will be also more people favoring fossil generators over solar rooftops because generators can be 100X more than solar rooftops. Why settle for solar rooftops if you can install big generators that will be needed to charge EVS next doors.. onyour block.. your neighborhood will be air polluted while owner of EVs will drive off to work on air pollutin free congested highways all the same! Towns and cities will be pollution hell!Sure some will still use solar rooftops , sure, but others will not .. your local utility is making it possible by expanding beyond solar and wind to local homeowner’s own fossil generators.. I am not talking about those… Read more »
Scott Franco

The USA is awash with natural gas from fracking. Most of it has to be exported because we cannot consume it all here. And there are limits on how fast we can get it out of the ground because of pipeline restrictions that make it hard to move the NG out of the producing areas.

Nuclear is not coming back, sorry. It costs to much to make it safe. It is also not emission free. It emits hard radioactive waste that must be stored forever. It would be hard to imagine a worse kind of energy source based on either cost or emissions.

There is a lot going on in energy generation that does not get that much press. Hoover dam is being converted into an energy storage facility (which I have been predicting here for years, by the way). Deep water wind is being deployed outside England for the first time. Offshore, deep water wind farms mean that the windmills are far enough offshore to be invisible to land, won’t kill birds because birds don’t fly far from land, and there is more wind activity offshore than on land.

Bottom line is you haven’t seen anything yet.

BoltEV (was SparkEV)

Nuclear cost is due to over-hyped environmental laws placed on them for 1930’s technology nuclear power that is still in use today. When’s the last time something like breeders or thorium was actively pursued or even 5th gen designs (or even 3rd gen)?

In effect, freeze on nuclear is the reason why it’s so expensive. Killing innovation due to over-regulation will do that to any technology.

Will

Yelp

Nix

I agree. Nuclear isn’t coming back. There is no appetite for any politicians to put their neck on the line for it, and new nuke plants can’t be built without a lot of political capital being spent. Depending on political party, polititicians would rather burn their political capital on coal or solar or NG or wind.

One problem with all the fracked NG is also that much of it was produced to meet contractual obligations under lease terms when Chesapeake was trying to corner the fracked NG lease market. That drove NG artificially low. There is a bit of an NG bubble right now.

Pushmi-Pullyu

Why is nuclear waste the only toxic waste that’s unacceptable? Why is it “worse” than toxic waste from any other industry? The idea that it will “last for millions of years,” even if that was true when it’s not, ignores the fact that toxic waste from other industries will essentially last forever.

No, the opposition to nuclear power is mostly fueled by public hysteria over “RADIATION!!”, helped by propaganda from Big Oil. Opposing nuclear power because of nuclear waste isn’t a reason — it’s just an excuse.

Furthermore, there isn’t any technical problem with long-term storage of nuclear waste. The French have that problem solved. No, the only problem there is political, not technological.

It’s an ongoing public shame that the U.S. isn’t pursuing building a new generation of less polluting, truly fail-safe Generation IV nuclear power plants. Nuclear is the only technology which can provide safe, dependable energy 24/7, day and night, rain or snow, summer and winter, without burning any fossil fuels. Furthermore, the volume of waste from a nuclear power plant is staggeringly minuscule as compared to the mass (and volume) of solid waste from a coal-fired plant, or the mass of air pollution from a gas-fired plant.

Now more nukes!

https://www.pbs.org/wgbh/pages/frontline/shows/reaction/readings/french.html

Tim

I had to stop reading your post because I was getting dumber.

William

At least you admit to the fact, to your having been highly edumicated!

It’s pretty obvious that Gumby K. is definitely searching for Pokey, on the above Thermo King “edge-U-muck-Hated” rant!

clearcut acres

This is nonsense. I live in rural Canada, which most people might consider far north. My 36 panel solar array, net metered, supplies enough for our household and for an electric car that does about 80 km (50 mi) per day. I also have a gas generator for those rare times the grid fails. While I pay nothing for power when the grid is up, it’s $20 per day to run the generator. We save $5,500 per year on automotive fuel. This dystopian vision will not happen because solar is so much cheaper than burning FF for electricity. It also makes no noise and no pollution.

Bill Howland

Agreed. Solar and Wind have both come down in price, and battery systems are being used by Utilities again after around a 100 year Hiatus, although now they are being used for demand leveling.

It will continue since Battery systems cost less than Peaker Plants for TWO BIG REASONS:

1). Absolutely zero fuel cost (if they are recharged during overnight periods when the electric usage is too low, not too high.

2). Help Utilities meet their corporate emissions reductions, since battery systems are relatively clean.

But the main thing the naysayers forget is that slow-charging at home during the overnight period HELPS EVERYTHING associated with the utility, and for some people lowers their overall electricity rate, all without building any additional infrastructure at all.

Whereas New Central Stations were required during the 1960’s when energy-hogging ‘frost free’ refrigerators became commonplace, the current ban on commodity incandescent light bulbs in the states, plus refrigerators, washing machines, and air conditioning typically using less than 2/3 rds of the electricity they’ve traditionally used is saving more electricity than it takes to recharge evs at home. So please Relax.

phEVfan

Two words: Battery backup.
Not that Powerwall will save Tesla, but that battery backup will be what keeps the solar demand high and leaves nuclear/coal in the grave. Solar’s only downfall is time of day. Battery storage solves this. Add to that wind, hydro, biomass and geothermal you have enough for nighttime demand without pollution or radioactive waste.

marty

This is my last Ford! Forty years of Ford vehicles….almost all losers! rented a Nissan last few days….wow, what I have been missing! My explorer has done me in this time.

Scott Franco

I imagine Ford has a similar opinion of Telsa.

Chris O

Many had that opinion about Tesla and many probably still do but it looks like things are developing quite differently from what many were expecting.

Bill Howland

Car company dying? “Ford may not make it”??? I thought I was listening to Lutz again!

YVES LAURIN

First, let me tell you that I am a Tesla fan and hate what Ford is doing, but…

I do not think Ford will go belly up any time soon, aren’t they selling F150 like crazy.
I’m pretty sure they have something up their sleeves, they are just waiting for it to be profitable letting Tesla doing all the hard work. Then they will start building them and advertise like crazy, I thing all that major constructor are waiting for the same reason, then they will flood the media with advertisement.

MABUS

But ford ev vehicles not are the same caracterist and quality as a Tesla’s evs

Pushmi-Pullyu

Looking to the future, when Ford starts building some compelling PEVs with a good range — far better than the C-Max or the Energi — that will be a good thing. The EV revolution needs more variety, more models on the market. One size does not fit all.

antrik

Accelerating EV transition won’t help Ford in an economic downturn. It will just mean they will have to start writing off combustion car investments earlier…

rey

Can’t recall how far ago i owned a Ford,it was a Pinto wasn’t a lot of beans , lucky i was never rearended . For is a DEAD car Co.

Nix

What I find more interesting is who will survive the next inevitable global spike in oil prices. A sustained 5 year oil price spike is going to strike a massive blow to Ford considering they are in the process of killing their passenger car lines.

Ford is in trouble if oil prices spike just after they kill off their passenger car line, and they are still an “also ran” in EV’s/PHEV’s (like now).

QCO

Contrary to popular belief, Ford is not completely out of making cars, just in North America where it has proven to be unprofitable due to low demand. They will still make and sell cars in Europe and China. Besides, if you read between the lines, it’s clear they plan to build both cars and SUVs on the same set of global platforms.

Pushmi-Pullyu

Building both cars and SUVs “on the same platform” isn’t going to help them at all when EVs start taking bigger and bigger bites out of the gasmobile market, which they certainly will within a few years. Compelling EVs need to be built on a different platform; an EV-only “skateboard” platform.

QCO

Nothing prevents them from making EV or PHEV platforms.

Tony

Funny how a car company who doesn’t advertise, has no dealerships, and has 400k+ people placing reservations isn’t a threat? I think all car companies better hurry or they will be the next Nokia/Blackberry. Obsolete in the next 5-10 years.

Kevin Stamp

No one even wants this gay electric shit not to mention Tesla kills people every day with that self driving shit what’s the point people want to drive there cars with real engines and good sound take a Uber if you don’t want to drive WTH has this come to bunch of weak panzy ass people these days keep your gay ass cars

h3x6g0n

Holy moly!
Inbred much?

Will

Man where’s the moderators

Bill Howland

He forgot Homer Simpson’s Pink Electric. Oh well, Guess we lost an electric sale with that guy.

Pushmi-Pullyu

Hafta feel sorry for “Kevin”. Even as a troll, he’s a sad failure! He tried to join the gay club, but they kicked him out.
😆 😆 😆

Epsilon

Elon may be right but perhaps he should be more concerned with his model lifespan/replacement plans. Model S is amazing but getting pretty long in the tooth. They’re everywhere in my area. Time for a major redesign. Let Ford live or die based on their own decisions.

Chris O

Nonsense, Ford makes 90% of global profits from F150, what could possibly go wrong?

Will

OPEC puts an embargo on the west

Raymond Ramirez

We don’t have to worry about OPEC anymore. Most of the oil is domestic or Canadian. Very little is imported.

Derek

Everyone knows who Elon is…it’s dumb to say “Tesla’s Elon Musk”.
As for the (incredibly short) article, I agree with him, and have been saying such for awhile, and once they shuttered their car department, it was clear as day, they are slowly dying. They are supposedly shifting to EV’s, and have a “Team Edison” (which is a direct shot across the bow of Tesla), but they are moving at a snails pace. Ford is the next Saturn/Pontiac/Saab, ect.

Richard

Ford is totally in the pockets of big oil. They are one and the same.

Terawatt

Wouldn’t that depend almost entirely on the timing, depth, and duration of the next recession..? If it comes soon, Ford wouldn’t have been better placed to survive if they had invested billions in electric cars that didn’t make them any money, which is what most of the incumbents have done.

Richard

Ford and the industry is about to be Tesla trucked. Roadkill will have a new meaning.

Joe

Ford is in a transition period now, so to beat up on it I guess is normal. Their bread-and-butter Escape and Explorer are in the last years before the all-new replacements, and they will have both hybrid and plug-in options. Like with other automakers, the current gen vehicles (in Ford’s case, Fusion Energi and Focus BEV) was just a 1st-gen testbed before going all-in into plug-ins and BEVs. And as other comments have mentioned, there is the possible tie-up with VW (the auto industry will consolidate more anyway due to the rule of capitalism), and in Ford’s weakened state, it is not so bold of a prediction to say it will fail (or get swallowed up by someone else).

Will

Lalala. Bs spouting out your mouth

dathomir

Hmmmm, kinda like the bs that’s spouting from yours?

Pushmi-Pullyu

“…Fusion Energi and Focus BEV [were] just a 1st-gen testbed before going all-in into plug-ins and BEVs…”

Hmmm… Must be some alternative reality you’re living in. In this reality, Ford has given every indication it will fight every step of the way against being forced to build long- or medium-range PEVs (Plug-in EVs). The idea that Ford plans to go “all-in” on PEVs is ignoring reality very hard indeed!

antrik

Can we please not frame this in terms of some imaginary ongoing spat? It’s is clear from context that the remark was not meant as an attack on Ford.

Pushmi-Pullyu

Sadly, this is all too common for articles aimed at the general public. Creating some sort of imaginary battle or contest between companies makes for a more “interesting” article, getting more clicks.

Sadly, we see this at news sites all over the internet, not just here at IEVs.

Windbourne

Totally agree with Elon that Ford will hit bottom come next recession.
HOPEFULLY, this time, if we help Ford (and possibly GM), we will instead BREAK THEM UP.
Seriously, we need multiple smaller innovative car makers.

Had we broke GM and Chrysler up into say 3-4 car companies EACH, we would have lost 1-2 of them by now. BUT the others would be rock solid and competing.

The Dude

Many brands won’t survive the next recession if they don’t start offering smaller, fun cars for less than 20K . The new jobs created by the USA’s Agent Orange don’t pay enough to afford Mustangs, Camaros or Challengers OR trucks and suv’s. They should all use robotic assembly more wisely!!!!!

Richard Routhier

What’s new Musk leaves harsh words foir anything non-Tesla

Raymond Ramirez

Musk is exaggerating, saying “There’s a good chance that Ford doesn’t make it in the next recession.” .Ford has several hidden projects related to its new EVs, including an electric Mustang. I saw a video of it with a blue glowing “pony” on the black grill (go to “FordAuthority.com”). And some Ford dealer have seen up close a new hybrid CUV . Remember that not everyone can pay over $40,000 for an EV even a compact such as the Model 3. SO Ford cal sell plenty of hybrids next year for less and still be ahead.

Ford is over 100 years old. A new company like Tesla with only one line of vehicles can never predict who can fail.

Anyone else can say “There’s a good chance that Musk doesn’t make it in the next year.”

dathomir

Sadly majority of the folks here don’t/won’t visit such sites as Ford or GM Authority and others. Thus, unless “it’s official from the manufacturer” then it’s considered “vaporware” or “not happening” or “believe it when I see it,” take your pick.

My hunches are that Ford and GM will have some big announcements at the upcoming LA Auto Show and we’ll continue to hear more major electrification related announcements/debuts from other manufacturers as well (between LA Auto Show through 1st quarter 2019).

Himanshu

For the first time in the history TESLA marks profit, the chair of Mr. Musk is in swing, Better and cheaper models are already in market to compete with TESLA, and in all this he is just thinking of FORD.
FORD has some good EV/HEV models in market and in line for future launch, with the experience, company like FORD needs only a year or 2 to dust the TESLA. Mr. Musk should be more concentrate on his Business strategy, product planning and market expansion.
Just of the NOTE: NIO is offering a SUV better and Cheaper then TESLA. I think that is a real worry for Mr. Musk.

If, by the means of Oil Politics and War, Oil price reaches even $300, sales will only slow down for IEC, will not end, and still be more than EV/HEV just by the virtue of market presence and availability of supporting Infra.

Mikey

Elon may be correct. I purchased a 2010 Fusion hybrid, happy to buy “American” after years of Japanese cars. It was just OK.
While fun to drive it had a minor repair at 10,000 miles. Then at 15,000 miles,, the same part broke. When I rented a 2015 Fusion I expected it to be “intuitive” but its functions had little resemblance to the 2010 model. Not OK.

I will not be purchasing another Ford.

Himanshu

as far as the world politics of oil and war is considered, the condition is more towards a global catastrophe rather just a recession.

pjkPA

Elon should stick to building cars ….
He should be supporting other American companies who have to do business in a completely UNFAIR “global” market.
Try to buy a Tesla in Japan, Germany, Korea or China… they keep us out while we give them $7500 and more for each electric car they dump in the US… . If a Chevy Volt costs $80,000 in Japan what do you think a Tesla costs?
Tesla will not survive this Global UNFAIR TRADE either.

Al D

Musk should stick to engineering and leave business to sharper business minds.

From CNBC: “Ford shares jumped more than 4 percent Wednesday after the automaker delivered third-quarter results that beat expectations.

The second-largest U.S. automaker continues to benefit from an overall shift in North America away from cars and toward trucks, where it has historically been a strong competitor.

Ford continues to back its prior forecast, which calls for adjusted full-year earnings of $1.30 to $1.50 per share. It said cash flow for the year will be positive, but lower than it was in 2017.”
_______________________________________________________________________________________

Also: VW may be sharing its EV platform with Ford. In exchange, Ford would share a pickup truck platform and some engines with VW. They’re also in talks involving self-driving technology. All the major manufacturers are partnering up on EV and battery development, including solid-state battery development. Some of them are also financing promising solid-state battery companies and universities.

rey

Ford still has that AVTM to fully payback when they are finished paying it they will be able to ask for their part of the BAILOUT#1 that GM and Chrysler got,/sc