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Ford Motors Loses big on their EV Sales · Elon Musk Podcast

• 0:01
  Hey everybody, welcome back to the Elon Musk Podcast.
• 0:05
  This is a show where we discuss the critical Crossroads, The
• 0:08
  Shape, SpaceX, Tesla X, The Boring Company, and Neuralink,
• 0:13
  and I'm your host, Will Walden. Tesla competitor Ford Motor
• 0:18
  Company recently released their fourth quarter sales data,
• 0:21
  revealing a pretty big contrast here.
• 0:24
  And while they achieved a record in EV sales, the success is
• 0:28
  paired with significant short term financial losses.
• 0:31
  And in 2023, Ford's U.S. sales surged by 7.1%, reaching 2
• 0:37
  million vehicles sold. This increase was driven
• 0:40
  primarily by their popular F Series trucks, robust commercial
• 0:44
  vehicle sales and record setting performance in the EV sector.
• 0:49
  A Ford's F series maintained its position as America's top
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  selling truck for the 47th consecutive year in the best
• 0:55
  selling vehicle for the 42nd year.
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  Now. This dominance, partially
• 1:00
  attributed to competition between General Motors, Chevy
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  Silverado and GMC Sierra shows that Ford is enduring this now.
• 1:08
  For investors though, the noteworthy aspect lies in the
• 1:11
  success of Ford's EV versions of its flagship trucks.
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  The F-150 Lightning emerged as the top selling electric truck
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  while the F-150 Hybrid led the full size hybrid truck market.
• 1:24
  This shows Ford's ability to transition its gasoline powered
• 1:28
  truck dominance into the EV world.
• 1:31
  You know, so maybe they can dominate that eventually if
• 1:34
  cyber truck doesn't have anything to do with it.
• 1:36
  We're big fans of the cyber truck here.
• 1:38
  So I think Ford has a chance to continue on because let's just
• 1:43
  face it, the cyber truck isn't for everybody here.
• 1:46
  Now Ford's EV sector, particularly in the fourth
• 1:49
  quarter of 2023, saw a significant uplift.
• 1:52
  The company sold nearly 26,000 EVs in this period, a 24%
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  increase for the third quarter Of this growth contributed to an
• 2:01
  18% rise in EV sales for the full year.
• 2:04
  The F-150 Lightning was a major contributor to this growth, with
• 2:07
  its sales up 74% in the fourth quarter compared to the previous
• 2:11
  year. Ford's Mustang Mach E and the E
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  Transit also helped the company secure its position as America's
• 2:18
  second ranked EV brand in 2023. However, Ford's triumph in the
• 2:23
  EV market comes with the caveat. Despite record EV sales, the
• 2:28
  company is experiencing financial losses in its EV
• 2:31
  sector. Ford estimated its Model E unit,
• 2:34
  which focuses on E VS, would incur losses of approximately
• 2:38
  $4.5 billion in 2023. Ford's management remains
• 2:44
  optimistic though anticipating a turn around in the Model E units
• 2:47
  profitability by the end of 2026.
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  They show that the confidence is based on expected reductions in
• 2:53
  costs and an increase in production efficiency.
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  The company views the current situation as a necessary phase
• 3:00
  towards long term profitability. And remember, Ford is only a few
• 3:04
  years into the EV game. Companies like Tesla have been
• 3:08
  in this for over a decade. So Ford has a lot of catch up to
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  do and they have a lot of learning to do as well.
• 3:14
  And Ford's strategy for achieving an 8% EBIT margin by
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  2026 involves scaling production and sales along with
• 3:22
  improvements in design, engineering and battery cost
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  reductions. And these steps are seen as
• 3:27
  essential for enhancing Ford's financial performance in the
• 3:30
  coming years. Despite the challenges in the EV
• 3:33
  sector, there's plenty of them. Ford wants some growth, and they
• 3:36
  see growth in 2024, driven by its strong lineup of SUVs and
• 3:41
  trucks. The company plans to introduce
• 3:43
  new models across the F Series, Ranger, Explorer, Expedition and
• 3:48
  the Lincoln Ranges as well. The importance of continuous EV
• 3:52
  sales growth for Ford can't be overstated.
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  Despite the current losses, sustained sales are crucial for
• 3:58
  the company to achieve profitability in the near future
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  and into 2026 now. Investors considering Ford Motor
• 4:05
  Company stocks should weigh these developments very
• 4:08
  carefully, though. The company's performance in the
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  EV market, despite its current losses, is a critical factor in
• 4:14
  evaluating its future prospects. Ford's a stable company, but you
• 4:19
  never know what's going to happen in the next few years
• 4:21
  that they can't get those costs down.
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  In 2023, Ford's F series, including the F-150 Lightning
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  and Super Duty trucks, recorded 750,789 deliveries in the US.
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  This performance is critical in understanding Ford's market
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  dynamics, especially when contrasting with General Motors.
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  Combined sales of the Chevy Silverado and the GMC Sierra
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  Electric trucks growing segment in the market are also reshaping
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  the competitive landscape. Ford's F-150 Lightning leads the
• 4:51
  category, while other manufacturers like General
• 4:54
  Motors and also Rivian are making notable strides.
• 4:57
  I'm also a fan of Rivian. So if you're a fan of Rivian,
• 5:00
  I'm right there with you. I love the headlights.
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  They're cute. Hybrid trucks are another area
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  where Ford holds strong position.
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  F-150 Power Boost, Maverick Hybrid dominate their respective
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  segments shows that Ford's capability in both full size and
• 5:14
  compact hybrid truck markets. Looking at the broad truck
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  market though, the competitive landscape includes various
• 5:21
  players like Stalantis's Ram Series, Toyota's Tundra and
• 5:25
  Nissan's Titan. Each brand brings unique
• 5:27
  offerings to the table with Ford maintaining a strong presence
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  amongst all of them. Now, Tesla's cyber truck is also
• 5:36
  a challenge to Ford. Despite its high initial
• 5:39
  interest, Tesla's production and delivery capabilities will be
• 5:42
  critical in determining its impact on the market.
• 5:46
  It's almost a niche product at this point.
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  It is not traditional. Most truck owners that I've
• 5:54
  talked to, and this is a little personal side note, not quite
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  news, but they're kind of on the fence with it.
• 6:01
  They think it looks neat, but they don't see the reason to
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  have a neat looking truck when their truck already performs
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  well. These are farmers and people
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  that haul a lot of wood and things like that.
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  So it might be a hard sell for the cyber truck to a a working
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  class blue collar person. But the affordability of full
• 6:19
  size pickups remains a key factor for all these consumers.
• 6:23
  And as of now, the Ram 1500 Classic emerges as the most
• 6:27
  affordable option with Ford's F-150 and Chevy Silverado also
• 6:32
  competitively priced. Now, Ford's latest sales data
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  presents a kind of a complex picture here. record-breaking EV
• 6:39
  sales signal a strong move towards electrification, but
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  come with a substantial short term financial loss.
• 6:46
  The company's strategy and the future model releases suggest
• 6:50
  optimism for growth despite these current challenges.
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  And as we continue to evolve and the auto industry continues to
• 6:57
  evolve, Ford will continue to evolve with it, getting their
• 7:01
  costs down and producing more EVs in the future.
• 7:06
  Hey, thank you so much for listening today.
• 7:08
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• 7:10
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• 7:36
  tomorrow.