Posted on 02/16/2024 5:04:28 AM PST by bert
Ford CEO Jim Farley and GM CEO Mary Barra said they are open to collaborating with automakers on EV tech to compete with China
The CEOs of leading U.S. automakers Ford and GM on Thursday signaled they are open to considering partnerships to lower the cost of electric vehicle technology to compete with low-cost Chinese EVs looking to the U.S. and European markets.
"If there’s ways that we can partner with others, especially on technologies that are not consumer-facing, and be more efficient with R&D as well as capital, we’re all in," GM CEO Mary Barra told investors at a conference sponsored by Wolfe Research.
Ford CEO Jim Farley also opened the door to collaborating with other automakers on cutting EV battery costs during a separate presentation at the conference Thursday.
The Detroit companies and other Western automakers are facing increasing competition from BYD and low-cost Chinese EV makers that are stepping up their exports of vehicles to Europe, Latin America and Southeast Asia.
FORD’S PROFITS GETTING EATEN UP BY EVS
Ford CEO Farley GM CEO Barra Ford CEO Jim Farley and GM CEO Mary Barra signaled a willingness to collaborate with other automakers on initiatives to compete with Chinese EV makers. (Bill Pugliano/Getty Images / Getty Images)
BYD is weighing the construction of an assembly plant in Mexico that could serve as a platform to ship EVs to the U.S., according to a report by Nikkei earlier this week.
"If you cannot compete fair and square with the Chinese around the world, then 20% to 30% of your revenue is at risk" over the next several years, Farley said.
In its latest earnings report, Ford projected a loss of $5 billion to $5.5 billion on its EV division this year. The company launched a "skunk works" team separate from its main engineering unit that is focused on designing a small, low-cost EV that could compete with BYD’s Seagull model.
GM BOUGHT OUT NEARLY HALF OF BUICK DEALERS WHO OPTED AGAINST SELLING EVS
General Motors and Twitter General Motors says it has a chance to break even on its North American EVs during the second half of this year. (Mario Tama/Getty Images / Getty Images)
Ford is also reevaluating its battery strategy as it looks to make its EV offerings more economical.
"We can start having a competitive battery situation. We can go to common cylindrical cells that could add a lot of leverage to our purchasing capability," Farley said. "Maybe we should do (this) with another OEM (automaker)."
Farley said BYD can produce its small Seagull EV for $9,000 to $11,000. Wolfe Research analyst Rod Lache said he estimates Chinese production costs are 30% lower than Western automakers’ costs.
"Last year, 25% of all vehicles sold in Mexico were sourced in China. The world is changing," Farley said.
FORD CONSIDERS AXING CAR FEATURE THAT COULD SAVE COMPANY MILLIONS PER YEAR
Farley indicated Ford’s goal for a new EV is to make it profitable within the first year, saying he told the company’s engineers, "You have to make money in the first 12 months. If you can’t make money, we aren’t launching the car."
Barra said GM is already well-positioned to begin breaking even on its North American EVs during the second half of this year if it can reach an annualized production rate of 200,000 to 300,000 vehicles and continue to benefit from federal EV subsidies under the Inflation Reduction Act.
GM missed its 2023 North American EV production targets in part because of problems manufacturing battery modules.
"I own that," Barra said.
She said GM is now on track to overcome those problems as well as fix software glitches that impacted the launch of the Chevrolet Blazer EV this year.
Barra said that, in China, GM’s brands will focus on premium and higher-priced segments as Chinese automakers focus on mainstream market segments.
Further BYD is not the problem but rather a chinese Boogie man being conjured up as an excuse for engineering and manufacturing incompetence.
The real problem ignored by this propaganda effort, is Tesla. about 70 % of electric vehicles in the USA are Teslas. Further, The current market share exceeds 20%. Ford and GM have essentially none of the market
What Ford and GM do have are old wornout engineers and the albatross of the UAW.
Partner with Toyota and resist EVs.
Chinese EVs are actual junk, dangerous junk at that. Why would any one want to compete with a junk car manufacturer? And a manufacture that is run by the State and is part of the State’s military?
what a good idea. Ford can get lean & mean and only lose $20K on each electric pickup truck instead of 60...
“Why would any one want to compete with a junk car manufacturer? And a manufacture that is run by the State and is part of the State’s military?”
Warren Buffett owns 3 billion worth of BYD stock as well.I guess he has no morals when it comes to making a dollar, or a few more billions.
GM still can’t get their Z06 out of the barn without major issues
Warren Buffett, Democrat
Two crappy car companies joining together to make more crappy cars.
Should be easy because China manufactures CRAP
Coming soon, antitrust/monopoly charges...
I used to love US made cars. Ford especially.
I had a 92 Aerostar that made it to 225,000miles when I sold it. The engine still didn’t use much oil.
I have a 96 Mustang GT Convertible still. We use it on nice days , took some repair and it’s on its second engine but still runs good. Maybe 250,000 miles now?
Last one I bought was about 4 years ago. It was a 2001 Lincoln Towncar but only had 60,000 miles. It was solid and a beautiful ride. I sold it when the car prices jumped and made 1000 dollars more than when I bought it a year before.
BUT…
About 4 Years ago I started flipping cars and discovered something anmazing and shocking. Ford doesn’t give a crap about quality anymore. Examples: 1. They now make water pumps on the INSIDE of engines. All water pumps fail and when your does either it will ruin your engine or it will be a 1000 job to change a $100 part. 2. My mother in law has a “double clutch transmission” on her Ford Focus. It’s a wacky design and I think 2-3 class action suits are in the courts so many are failing.
Ohh and on the internal water pumps, also several class action lawsuits in the wings. Ford has dropped in customer satisfaction from the upper middle of the pack to the basement, they were the best made US brand about a decade ago. GM products and Chrysler are only marginally better now.
This seems to closely follow the general declining political situation. I don’t know why.
I will only buy Japanese cars now, and not all of them even. Just Toyota and Honda.
A partnership with the UAW is not enough? Say it ain’t so.
Exactly!!!!
Ford and GM want to make American CRAP on par with Chinese CRAP!! These idiots probably want slave labor too. I bet UAW is onboard with this.
Ford - Found On Road DEAD, Fix or Repair Daily.
GM - Government Motors. Or their GMC division - Government Made CRAP
I know a better way to compete...just build combustion engine vehicles. Derp.
To be honest, they give us about five more years to own our
own vehicles anyway.
I hope they just stick to EV’s for partnership.
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