Losing $100k per “Sale”
https://www.ericpetersautos.com/2024/05/12/losing-100k-per-sale/
By eric -May 12, 20241143
Ford just announced it is “cutting back” on battery orders for its battery powered devices – i.e., its electric vehicles – because it is costing Ford $100,000 to “sell” each device it makes.
Cutting back?
How about cutting bait?
Ordinarily, that’s what Ford – that’s what any car company – would have done already. It is why Ford stopped trying to sell Edsels, which did actually sell. Just not very well. Ford stopped making Edsels because it wasn’t selling enough of them to make it worth making more of them. Similarly, GM isn’t making Pontiac Azteks – or Pontiacs – anymore, either.
But never before has it cost this much to “sell” a vehicle.
A 2024 Ford F-150 Lightning lists for $54,995 (to make it sound better than $55,000). If Ford loses $100k on each “sale” of this device after recovering the $55k someone paid to buy the device then the true cost of making this device is in the range – so to speak – of $155,000.
Put another way, to make a modest 3 percent profit on this device, Ford would have to price it closer to $160,000 – and that is something more than merely a money-flush. It is what detectives call a clue as to what this is ultimately all about. That being to price almost everyone who cannot afford to spend six figures on a device out of driving.
Reason it out.
Why else would Ford – and all the others – continue to make devices they are well-aware are money flushes? Big corporations are not generally run by stupid people, although there are exceptions to that. But don’t make the mistake of thinking that running a corporation into the ground is stupid when there’s money in it for those doing it. The CEO of Ford, Jim Farley, is paid a sum comparable that paid Mary Barra, who is the head of GM. Both are paid more than $20 million annually – and that buys a lot.
Cooperation, for instance.
Both Ford and GM were co-opted after the near-collapse of each back in 2008-2009. The price they both paid to stave off collapse was their cooperation with the forces that have been at war with everything Henry Ford (and Alfred P. Sloan) set in motion more than a century ago. The industry was not reorganized. It was reconstructed. Kind of like the South – by the North – after the South failed in its bid to separate itself from a “union” that was held together by force rather than affection, let alone consent.
As it remains, today.
VW was reconstructed, too. And it is now very cooperative. The industry as a whole has become extremely cooperative. This turnaround has not been as abrupt nor as obvious as a parking brake 180 performed by pulling up on the brake lever (which almost no politically correct new cars have anymore) so as to lock the rear wheels and then by cranking the steering wheel hard over, so as to get the car to come around and end up facing the opposite direction.
But it amounts to the same thing.
The industry no longer seems much interested in selling vehicles to people who want to buy them and can afford to buy them – the two things that are necessary to sell a vehicle and without losing money on the deal. The industry seems very interested, on the other hand, in complying with whatever fatwas are hurled by the regulatory ayatollahs who control the federal apparat. Superficially, this makes a poltroonish kind of sense – in the sense that poltroons don’t like to make waves.
They love to be seen as . . . cooperative.
But when cooperation is suicidal then other motives are probably in play. They include not being personally affected by this cooperation; indeed, profiting from it. When you are paid $20 million in one year – or for that matter, $10 million – then you know that it won’t be difficult for you to pay $160,000 for a device. Or, if you prefer, a vehicle such as the brand-new 1960s Mustangs made by small-batch manufacturers that are exempted from all the “safety” and “emissions” regulations that ran the 1960s – and 1970s and 1980s and 1990s and 2000s-and-up – vehicles (and engines) off the road.
Just like those who can afford to fly privately do not have to deal with being groped by low-IQ government goons.
You’ll have no worries – so why would you worry about whether others do?
Maybe the leadership of the big car companies does not think this way consciously. Maybe neither did Marie Antoinette. Who – never having had to worry about missing a meal – could not conceive of anyone else having to worry about missing one.
Isn’t there plenty of cake to go around?
