From the Robert Bryce Substack
Robert Bryce
FoMoCo lost $47,585 for each EV sold in Q2, GE Vernova calls offshore turbine blade failure a “manufacturing deviation”
The losses keep coming. As I reported here in February, Ford Motor Co. lost $4.7 billion on its EV business in 2023, or about $64,731 for each EV it sold. Today, the company reported that over the first two quarters, it has lost nearly $2.5 billion on its Model e segment, meaning Ford’s EV losses are on track to total $5 billion in 2024. While the company’s per-vehicle losses declined somewhat during the second quarter, they are still stunning. Let’s take a quick drive through the results.
On July 3, the company published its second-quarter sales numbers. Its EV sales totaled 23,957 units, up 61% from the same period in 2023.
But the money numbers were published today, and they are sobering. Yes, the company sold 23,957 EVs during the quarter, but it lost $1.14 billion while doing so. Thus, Ford lost $47,585 for each EV it sold. In a press release, the company said it incurred the loss “amid ongoing industrywide pricing pressure on first-generation electric vehicles and lower wholesales. Those factors more than offset about $400 million in year-over-year cost reductions in the segment.”
In plain English, the company is saying that its cost-cutting efforts aren’t enough to make up for the price cuts it is being forced to make to attract buyers. To put that $47,585 per-EV loss in perspective, a Ford dealer in Austin currently has more than 20 Mustang Mach-E vehicles in stock selling for less than $47,000.
A bit more background on the company’s sales helps illustrate the scale of Ford’s faltering EV business. During the second quarter, Ford sold 199,463 F-Series trucks. Further, it sold more than half a million internal combustion engine vehicles (ICEVs). Thus, as seen above, the Dearborn-based auto giant sold 21 times more ICEVs than EVs.
The ongoing disaster in EVs has (finally) awakened Ford’s leaders from their money-losing stupor. Last Thursday, the company announced it would spend $3 billion to expand production capacity for its super-profitable F-Series line. In a July 18 press release, it said to meet “customer demand for one of its most popular and profitable vehicles,” it will add “initial capacity for 100,000 F-Series Super Duty trucks, including future multi-energy technology, at Oakville Assembly Complex in Ontario, Canada.” The press release also contains some telling words from the company’s COO, Kumar Galhotra:
This investment will benefit Ford, our employees in Canada and the U.S., and especially our customers who want and need Super Duty for their lives and livelihoods… It is fully consistent with our Ford+ plan for profitable growth, as we take steps to maximize our global manufacturing footprint, and our investments will have a fast payback. (Emphasis added.)
In other words, Ford has decided profitability matters. Rather than continue pouring money into its money-burning EV business, it will expand the production of the vehicles that keep the lights on, which means producing more F-150s and other vehicles that burn dino juice.
One final note that gives more proof that the EV craze is running out of steam: On Tuesday, General Motors CEO Mary Barra told Wall Street analysts that her company is deferring investments in EVs to ensure, as the Wall Street Journal put it, “the company doesn’t get ahead of demand.”
GE Vernova’s Wind Turbine Orders Plummet, CEO Calls Blade Failure “Manufacturing Deviation”
In the annals of corporate gobbledygook, Scott Strazik, the CEO of GE Vernova (GEV), surely deserves a prize for using the phrase “manufacturing deviation” to explain the July 13 disintegration of a turbine blade at the Vineyard Wind project in Massachusetts waters offshore Nantucket.
Yesterday, during an investor call to discuss the company’s second-quarter financials, Strazik addressed the disintegration of the turbine blade. As you may recall, that blade failure sent tons of debris into the ocean, forcing the temporary closure of beaches on Nantucket Island during the height of the summer tourist season. The turbine blade disaster also led to a suspension of construction on the 800-megawatt offshore project, which is owned by two foreign companies, Avangrid, and Copenhagen Infrastructure Partners, while investigators try to figure out what happened.
During the call, Strazik explained the blade was made in a factory in Canada and that “our investigation to date indicates that the affected blade experienced a manufacturing deviation.”
What, exactly, does that mean? The MV Times reported that “GE Vernova later issued an email statement that the manufacturing issue was due to ‘insufficient bonding,’ although they didn’t offer further explanation. Vernova — whose offices are in Cambridge — has not returned multiple calls to offer an explanation.”
GE Vernova’s second-quarter results revealed the slow-rolling train wreck now underway in the wind industry. While the company announced an increase in revenue and profits, it also revealed that its wind-related order book decreased “primarily due to a large Offshore Wind equipment order in the second quarter of last year that was canceled in the fourth quarter.”
The press release continued, noting that orders for new wind turbines plummeted 44%, and wind segment revenues fell 21% during the quarter. The company’s wind segment was the only one to lose money during the quarter. While the power segment made $613 million in EBITDA and the electrification segment made $129 million, the wind segment lost $117 million.
As I noted earlier this week in “Breaking Wind,” the wind industry faces lots of pain. More proof came last Friday when Level Ten Energy reported that power purchase agreement prices for new wind projects jumped by 13.5% year-on-year. Solar prices increased by about 3%. Thus, Big Wind is not only seeing lots of turbine failures onshore and offshore and a growing backlash across America — where local governments and landowners are rejecting the encroachment of their monstrous landscape-destroying-wildlife-killing-whale-endangering-and-property-value-shredding machines — it is also losing price competitiveness in the market.
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So Trump was correct about the bloodbath.
Do you mean his remark if he loses?
Do you always have to be so immature?
He can’t help but try to wind people up
Seems to work (unfortunately).
See what you did there…..:):):):)
Here is the relevant comment and as you should be able to read/understand it is about the auto industry.
“We’re going to put a 100% tariff on every single car that comes across the line, and you’re not going to be able to sell those cars if I get elected,” Trump said on Saturday. “Now, if I don’t get elected, it’s going to be a bloodbath for the country, that’ll be the least of it.”
What does he mean with that?
He means that if people are stupid enough to elect Kamala, there will be a continued mandate for EV’s, resulting in 100’s of thousands of job losses in the US auto industry.
Thanks
But if you were half as smart as you think you are, you would have figured it our yourself.
Trump had the highest unemployment rate since the Great Depression, 14.8 percent, and he left office with a 6 percent unemployment rate. He newer mentions his own record.
You have been corrected on this point many times.
Your TDS makes you like like a total LUSER. !
You have all the characteristics of a bot.
But without the intelligence !!
The unemployment rate would continue to drop under Trump — until the pandemic. A month before widespread lockdowns would virtually shut down the economy, the unemployment rate stood at 3.5% in February 2020, the lowest since December 1969.
Er, the least, of course.
Thanks…🤣🤣🤣
Yes, Trump understands that if Kamala gets in, there will be a huge loss of life from her policies.
[X] doubt
You will never understand anything…. you don’t have the capability.
Kamala would decimate American society.. on purpose. !!
There was an even bigger loss of life due to COVID-19 under his presidency when he failed to unite the people against the virus. He didn’t mention that.
Your TDS makes you look like a complete moron.
You and Luser should get a padded cell together. !
The loss of life was from bad policies promoted by Fauci, et. al., and Enron-style data manipulation to inflate case numbers. Mr. Trump’s big mistake was not canning the hack early on. The medical community lost a great deal of credibility in its totalitarian approach to “unite” the people against a virus that for the vast majority of the population was unremarkable.
You are dead right. She is fanatically pro-abortion. Not sure where she stands on assisted suicide but given her stance on most things it’s likely that she is in favour.
ff he losses its prison time.
For whom?
You have all the characteristics of a bot.
Maybe the CEO ought to resign for being incompetent and undermining shareholder value. Let Tesla build the EV’s for those consumers who think EV’s make sense. I have no use whatsoever for these vehicles. Recent article suggests American EV owners want to go back to ICE. I think the reasoning is quite clear without further explanation. A Harris presidency would double down on this foolishness. Pray that the low information electorate has an epiphany before its too late.
For short trips around town, EVs kinda sorta make sense.
If the EV battery is designated a backup for the grid, all bets are off.
I find that my bicycle is better for short trips in town than any car. With the congestion downtown I regularly beat people that are driving to the same destination. It is not because I’m a crazy bike nut.Trust me I am not anywhere near a physically fit individual. I even have a small trailer for building supplies.😊
“Ford lost $47,585 for each EV it sold.” A suspect number. With a new product, there are huge one-time expenses. You can only account for them after selling millions of units. (In the case of Ford EVs, the company has to hope to sell millions of them).
I haven’t looked at the accounts, but for you to be right, in the P&L for the most recent period, there should be positive gross margins after all other expenses than R&D. The losses should be down to R&D only, and you should be able to estimate some sales volume at which the gross margin will more than cover the ongoing R&D expenses.
That’s not what’s being reported in the press. What is being reported is that they are losing money because of price cutting which in turn is due to consumer resistance. Sounds more like a margin problem.
If they don’t have positive margins over cost of goods sold they are not going to make it up on volume. On the contrary, the more they sell the worse it will get.
Need to look at the financials to be sure, I don’t have time right now, but why not take a look?
About Ford, I noticed a recent emphasis on choice of powerplants in their Facebook posts. This is from July 7th.
“No task, track or trail is the same. Which is why we give you the freedom to choose how you power up. Hybrid, gas or all-electric, our lineup is your starting line.”
Good. There is no magic to it – the limitations on EV range and charging time cannot be wished away. OK for some drivers, a deal-breaker for many like me.
About the GE wind turbine blade failure, the big question should be about the extent and methods and records of factory inspection of these blades. How did a bonding defect go undetected? This failure is just as if a large airplane with a composite fuselage (think Boeing 787) suffered a decompression at altitude due to an undetected “bonding” issue.
QC — quality control
As with most manufacturing of the glorious new tech, built to a cost, not to a standard.
Justin will fix it.
When Justin looks in a mirror all he sees is a giant anus and he is not looking at his butt.
Undetected? I see that for the airliner example, but I wouldn’t put it past the manufacturer to let a noncompliant blade ship. If production is taking too long, or is too costly, GE may be allowing the shipping of out of spec blades.
For several years at the start of my career I was involved with infrared optical components and assemblies for military applications. Occasionally our customers (military primes like General Dynamics, Hughes, Raytheon, etc) would make exceptions for parts that were 1) taking too long to make right, 2) were over spec’d and were too costly.
Fair point.
Those “in the field” are seldom considered ahead of profits.
Quality is free. “Manufacturing deviations” only exist when Quality Management refuses to stop production because money managers don’t understand this axiom.
It’s not a secret. W. Edwards Demming has already described Total Quality Management.
Never standing between the company and the cash register is recipe for disaster.
Demming was brought over to Japan after WWII to teach quality control. I’ve been through TQM training plus the last company I worked for had us learn “The Goal”.
You are correct about the conflict between quality and production.
The guys in Apollo 13 probably didn’t have a good opinion of that subprime part procedure after their flight.😰
Well, since this was the period 1980- 1986, we weren’t making parts for Apollo.
To expand on what I saw. Take for example an germanium IR window for a tank … this window might be totally functional but just a little “out of spec” for some attribute. We would not ship it, but we didn’t scrap it either. At some point the customer source engineer would go over the rejected material, and some would be accepted on a provisional basis. On the other hand, there were parts that had silly tight specs. But the prints were never revised, and the vendor and customer shouldered on until something – lack of manufacturing bandwidth (e.g., losing that grouchy old optician that could make them) – forced a relook at the specs. And more rarely, parts that were functionally deficient were shipped with customer approval because if they weren’t the outcome would have been even worse – it’s better to take a hit on system performance then have no system at all.
My point was that GE may have compromised with iffy blades just to get the dang things out the door.
I wasn’t commenting on what you had or had not done, just that the people affected by these issues see the failures in a different light.🙋♂️😉
Canada appears to be ‘full communist’ now… we SHOULD all know how that impacts Quality Control.
gonna get expensive for wind turbine insurance –
https://www.alignedinsurance.com/common-risks-to-consider-about-wind-turbines/
https://www.firetrace.com/an-insurers-perspective-of-wind-turbine-fire-risk
https://www.theinsurer.com/viewpoint/underwriting-experience-key-as-renewable-energy-risk-landscape-evolves/
https://www.munichre.com/en/solutions/for-industry-clients/risk-transfer-solutions-for-on-and-off-shore-wind-power.html
As I said before, Farley should be let go. (Fired!)
I wonder how many more blades are going to deviate manufacturingly and wash up on the beaches.
Made the blades a bit too long in order to squeeze more return out of each exorbitant oceanic structure did you chaps? Now you have to chop them back a bit and the returns get uglier but here’s a thought. Instead of going for broke have a chat with Toyota about hybridising the windmills with diesel of gas engines and you won’t lose big bucks like Ford with their pure EVs. Oh and that means you can save with the 24/7/365 firming batteries onshore too so win win.
Perfection is unobtainium.
There will be others. It is unavoidable.
Have a fortune cookie…
And pray sanity breaks out
Confucius say- Tis always better to think inside the round and compromise with win win than go woke broke with wind wind up.
I have a 2019 F150. The odd thing it is a “standard-old-fashioned” pickup. That is, it has room for 3 folks in front row only style. There are no 2nd row seats (no room for kiddy seats). It has an 8 ft. bed and 4-wheel drive. And just enough of the new “assists” to be annoying.
The Super Duty trucks, mentioned in the post, mostly have 4 doors and they have Short beds (5.5 ft), Standard (6.5′), and Long (8 ft.).
They have shrunk pickups just like candy bars and cans of soup.
“And just enough of the new “assists” to be annoying.”
____________________________________________
We have a “22 Ford Escape. It beeps at you for reasons I haven’t figured out yet, takes control of the car when it “Thinks” it needs to, has nearly 20 buttons on the steering wheel several of which I don’t know what they do. But it drives great and gets 40+ mpg. Yes it’s a hybrid.
Ah. Shrinkflation.
And McDonald’s Big Macs.
Ford: Serves ’em right to suffer. https://www.youtube.com/watch?v=Yd3_exRntgI
That’s what they get for listening to government bureaucrats.
From the outset, EV’s should have been advertised with the minimum guaranteed range in the worst of conditions with maximum occupancy and luggage, lights, wipers and heating all at max, not the optimistic downhill with a tailwind, light duty ‘up to’ figures. People might then have understood what they were letting themselves in for.
Not likely. ‘Comprehension’ has not been ‘taught’ for ages.
Back in the day, we used to say Ford meant “Found On Road Dead”. I guess that still applies to their EV offerings. 😉
Fix and Repair Daily
Ford, back in the day, “Fix Or Repair Daily.”
Just a bit of historical trivia.
And For Old Retired Doctors
Back in the day we used to say “Ford Motor is the best, Drive a mile and walk the rest.”
Bryce writes great articles.
Very timely
Ford stock fell 18% yesterday
The company also has big problems with reliability and is near the bottom of the J. D. Power three years in service dependability survey:
Ford and other manufacturers were helped by weak Tesla sales in California
In Q2 2024, Tesla’s global deliveries fell by 4.8% year-over-year, including the 24% plunge in California. Without California, Tesla’s global deliveries would have dipped by 1.4% YoY.
The auto market in California:
Total EV sales: -1.3% in Q2 YoY — “only” despite the plunge in Tesla sales, thanks to the surge in non-Tesla EV sales.
Total ICE vehicle sales: -2.1% in Q2 YoY.
EV market share in Q2 inched up to a share of 21.9%.
Tesla’s registrations in California in Q2 2023 accounted for 14.8% of Tesla’s global deliveries as reported by Tesla. California sales matter to Tesla.
Due diligence: I worked in Ford product development for 27 years … but have been driving very reliable Toyota Camrys since I retired in January 2005.
breakdown by brand can be misleading
how about the stats of individual ford models?
That information is not free for the general public.
In general EV reliability and ependibility has been much worse than ICEs according to Consumer Reports.
Its likely that the new UK Government will reinstate the ban on the sale of new ICE cars from 2030. Even without that, this year 22% of new sales have to be EVs, and any ICE sales over quota attract a fine of £15,000. These are the quotas by year:
The inevitable result of the combination of consumer resistance and hard quotas with that level of fine for exceeding it is that manufacturers will have to reduce their supply of ICE cars to a level where their sales of EVs form a high enough percentage.
This means rises in prices for all cars. The EVs because they are more expensive to start with, the ICE because fewer are being made, therefore fewer come on to the used market, therefore prices rise.
The fact that manufacturers are losing money making the EVs that they do sell is going to make this situation worse.
The fundamental problem is that EVs at present are a good fit only to a niche market. If you are retired, in the country with a drive so overnight charging isn’t a problem, never drive more than about 100 miles on day trips, they will suit reasonably well. Charging is no problem, even in cold winter and hot summer days the range will be manageable. But for the mass of the population they will not be an acceptable solution, especially not at a higher price.
But a modern ICE car, properly maintained, can do 20 years, so there’s a choice, just drive the one you have into the ground. That is what people will do. The result will be very bad news for the car industry. They are going to have to get used to much lower sales figures and adjust costs to match. They will do it, but the resulting ripple through the economy will have effects the government hasn’t even started to plan for.
Relax it’s all gunna run on V2G-
Clean energy experts warn Australian household EV infrastructure could cost as much as $10bn | news.com.au — Australia’s leading news site
All the philanthropic climate changers are gunna buy bigger battery EVs than they need for their transport in order to support the communal grid and their neighbours wearing it out.
They don’t want us driving anything
UK Regs would thus hurt car sales. Which car manufacturers are HQ’d in UK?
Almost none. What’s your point? The economic effects of the car market shrinking have nothing to do with where the companies have their HQs. The effect of the EV quotas and fines similarly.
The new Government is going to either have to abandon the quotas and fines, or preside over a crash in the car market. You cannot get there from here.
O/T. The way the wind is blowing
The Free Speech Act introduced last year is not fit for purpose and risked imposing serious burdens on our world class universities. This legislation could expose students to harm and appalling hate speech on campuses. That is why I have quickly ordered this legislation to be stopped.”
https://order-order.com/2024/07/26/labour-slammed-over-axing-free-speech-act/
See you in the gulag
“world class universities”. Kindly list any still existing… thx.
Speaking of offshore wind turbines, whales have apparently started retaliating against us humans for bumping them off with offshore wind turbines……
https://www.youtube.com/watch?v=d09rPOCa2Zk
…..and I cannot say that I blame them.
I have nothing against EVs. If you want one, get one. Just don’t be so delusional that you think you’re affecting the climate, either for better or worse by getting one. Also, don’t mandate that must give up my ICE for an EV, otherwise be labeled a climate heretic.
The west lost the EV race. I read that BYD can produce a $9000 EV. The BYD Seagull is the cheap car that the west needs. But more than 50% still has no interest in an EV because it’s not practical. EV’s are a waste of rare resources. Most drive less than 100 km a day, but you have a battery pack weighing 500 kg to give you 500 km range. A ot of weight and minerals that you don’t need.Ofcourse, occasional you have to take a long trip and then you need range. In the end EV’s are a stupidy. Let the market decide, if rich people want luxury EV’s then they can have them.
The Ford F-series (looked up price) has a good price for a truck. Still above my budget that I ever will spend on a car.
Ford loses on each unit but makes it up in volume. Talk to any of Biden’s economic team, they’ll explain it.
What the gov’t loses in sales taxes, it makes up in fines.
‘Trump’s business acumen: We need to call it like it is’https://www.publicopiniononline.com/story/opinion/columnists/2022/09/07/when-it-comes-to-business-former-president-trump-track-record-dismal/65474745007/
Pick your poison.
You need medication for your TDS.
The only car ford currently makes is the Mustang. Everything else is a SUV or truck body design. This includes economy cars and LTD which dominated the taxi and police market. Maybe they will look around and realize that not everybody wants a SUV or truck and they can make their milage numbers by reentering the car market.
How many of these ev’s sold were sold to government entities?
The UK, the dynamic is that companies give cars as part of compensation, which they do by contracting with fleet operators. The question is how this is then taxed. The car is a taxable benefit in kind, but the tax paid is much lower when its an EV. This is the great bulk of EV sales in the UK, and the tax discount is the main or only reason for the choice of EV as opposed to ICE.
The problem is that the cars then at the end of the lease find their way onto the used market, where individuals buy them, but people don’t want them except at a substantially lower price than they would normally get if they were an ICE.
You also have the phenomenon that people opt for plug-in hybrids, because of the tax advantage, and then just never use the plug-in, don’t even unpack the cables.
As in all these questions of climate and energy policy, the UK is the canary. Its an environment which should be a good one for EVs. The climate is temperate, the distances relatively small. Holland is probably even better, but the UK is a close second. But the verdict is coming in, the private buyer just doesn’t want them and isn’t buying them. So if the Government continues to implement the fines and quotas, the inevitable conclusion is that car companies limit manufacture of ICE cars, and the inevitable result of that is higher prices for ICEs and people hanging on to their used ICE cars as long as they possibly can.
More good news. The primary question here is what would Ford’s numbers look like if the government weren’t bribing them with preferences and strong arming them with threats and mandates.
To the naive this might appear to be a massive “free” market corporate failure, but viewed through the lens of progressive, left wing-nut, socialist ideology, this is no less than a spectacular success in wealth destruction and social disintegration. What’s not to like?