THE MORNING RANT: Ford’s EV Debacle Worsens with $1.9 Billion Additional Write-Downs, and its Never-Used EV Plant Now Mothballed until 2027

The nightmare for Ford Motor Company and its destructive CEO, Jim Farley, continues. As I have been documenting, Mr. Farley is a left-wing, eco-globalist who made the gamble to either transition Ford into a successful electric vehicle company, or to destroy the company while trying. He is destroying it.

Ford will not become a successful EV company, and it is questionable now how long Ford can withstand Farley’s catastrophic mismanagement. The bad news for Ford keeps coming as the “EV transition” fizzles out. The only profitable market for EVs is as a boutique, luxury product for status-seeking consumers who mainly use their vehicles for city driving. Tesla has that market sewn up, and those niche buyers are not interested in mass-market EV marques.

News just broke this week that on top of losing billions of dollars each year on its existing portfolio of EV products, Ford is going to take another huge loss to cancel planned production of an unwanted 3-row SUV, in addition to booking other charges related to its EV disaster.

“Ford Cancels Plans for Electric SUV” [WSJ – 8/21/2024]

Ford Motor is canceling plans for a large electric sport-utility vehicle and expects to take $1.9 billion in related special charges and write-downs, as automakers continue adjusting their EV plans because of softer-than-expected demand.

For the record, the “softer-than-expected demand” for EVs was not unexpected by me, or by anyone else who is vaguely familiar with the driving needs of most Americans. It’s an indictment of the bubble in which our ruling class lives that they are surprised by consumer rejection of EVs. It’s also an indictment of the blistering incompetence of Jim Farley and his ilk, who believe that politicians and bureaucrats can decree what consumers should want, rather than listening to Ford’s dealers, who are on the front lines talking to actual consumers.

Perhaps more significant is that commencement of vehicle production at the massive new EV manufacturing facility that Ford has been building outside Memphis – which was initially supposed to start producing electric pickup trucks in 2025 – has been postponed again. It was only a few months ago that Ford announced that production was being delayed until 2026, not due to construction delays, but due to consumer rejection of Ford’s EV offerings. That production-start date has now been pushed back again – this time until 2027.

“Ford says production of electric pickup truck at Blue Oval City delayed until 2027” [ABC Memphis 24 - 8/21/2024]

Ford, which is losing millions on its current EVs, gave few details about the new products. But it said production of its next generation full-size electric pickup truck at Blue Oval City in West Tennessee will be delayed 18 months, until 2027.

I have been writing about Ford’s “Blue Oval City” mess in various outlets, documenting not just Ford’s bad decisions, but also those of Tennessee politicians who threw a billion taxpayer dollars at this public-private sinkhole. This is from a piece of mine titled “Blue Oval Blues” at Tennessee Conservative News:

In 2021, the gullible Republican-controlled legislature in Tennessee, along with the gullible Republican governor, threw about one billion taxpayer dollars from its Rainy Day Fund at Ford to manufacture a massive new plant outside of Memphis. Known as Blue Oval City, the total cost of the project was estimated at close to $6 billion.

The state also helped out by condemning land and building roads. The first electric pickup trucks were supposed to roll off the line in 2025, but just a few months ago Ford announced that production was being pushed back until 2026. The delay is not related to construction issues. It’s because consumers have emphatically rejected Ford’s flagship EV, the F150 Conflagration Lightning. There is no demand for an electric pickup, because it cannot do what consumers need pickups to do.

Not only does Ford not need the EV capacity that the massive new Tennessee plant was going to provide, it pretty much doesn’t need any EV capacity at all.

I was right when I stated a few years ago that Ford would not be producing EVs in West Tennessee in 2025. I was right when I recently stated that Ford would not be producing EVs in West Tennessee in 2026. And I am telling you now with 100% certainty that Ford will not be producing EVs in West Tennessee in 2027. For that reason alone, I could run Ford much better than Jim Farley, and for a lot less money.

Perhaps Blue Oval City can be sold, or repurposed by Ford for other manufacturing uses. But if not, it represents another multi-billion-dollar unrealized loss that will have to be recognized someday.

There is no way forward for Ford to resolve its EV nightmare, and Blue Oval City is a sunk cost that will likely have to be written off at some point. Ford’s traditional business units cannot continue to cover for its EV losses forever, no matter how passionate Bill Ford and CEO Jim Farley are about pleasing Klaus Schwab and Joe Biden.

This latest news about Ford taking a $1.9 billion loss – on top of all its other multi-billion dollar EV losses - and postponing Blue Oval City until 2027, reflects nothing more than a continuous drip, drip, drip that is building into a flood of red ink that EVs are costing Ford. By the time Farley is finally dismissed, he may go down in memory as the “20 Billion Dollar Man” for how much he ultimately costs Ford and its shareholders in pursuit of the EV fairy tale.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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