This is a hard type problem, trying to figure what is really going in the face of unreliable corporate messaging.
But it is fun to try. The framework for this stab in the dark is politics, industry, and economics which includes trade.
Politics comes into play because the automotive industry in the US, and the EU is a huge driver of the economy.
Industry obviously makes the decisions about which direction to take and how fast to move.
Economics of course is the stage on which the above actors play.
Since the topic is Ford scaling back the question is why? and the answer is given as disappointing demand. That is not a completely satisfying answer. Cutting prices is the accepted way to increase demand per economics and ‘but that cuts margins!’ is the usual industry reply.
The politics I want to highlight here is the ongoing tariff war on Chinese EVs, batteries, and such going on the US and EU trying to protect their automotive industries. The major problem that I’ve seen is that both US and EU negotiators keep talking about containing China. I think they mostly mean keeping low China prices in China. Politics also enter into it since the government wants a domestic battery industry as part of the energy security mandate.
Economics tells us that as sexy as solar panels and batteries are today, tomorrow they will be commodities. Oops! The government want energy security and when it comes to domestic capacity the government wants enough in place so that going to 4 shifts a week would keep the economy running. Not a bad plan but who pays for it? Industry doesn’t want to run that much excess capacity.
Back to industry again. I was just reading that CATL’s sodium ion battery is as energy dense as LFP, I imagine that automotive execs are just as surprised as I was. Scaling back the current factory is probably to the lowest contractual allowable lithium purchasing. Make up the difference later when we can use domestic sodium ion…
This is a hard type problem, trying to figure what is really going in the face of unreliable corporate messaging.
But it is fun to try. The framework for this stab in the dark is politics, industry, and economics which includes trade.
Politics comes into play because the automotive industry in the US, and the EU is a huge driver of the economy.
Industry obviously makes the decisions about which direction to take and how fast to move.
Economics of course is the stage on which the above actors play.
Since the topic is Ford scaling back the question is why? and the answer is given as disappointing demand. That is not a completely satisfying answer. Cutting prices is the accepted way to increase demand per economics and ‘but that cuts margins!’ is the usual industry reply.
The politics I want to highlight here is the ongoing tariff war on Chinese EVs, batteries, and such going on the US and EU trying to protect their automotive industries. The major problem that I’ve seen is that both US and EU negotiators keep talking about containing China. I think they mostly mean keeping low China prices in China. Politics also enter into it since the government wants a domestic battery industry as part of the energy security mandate.
Economics tells us that as sexy as solar panels and batteries are today, tomorrow they will be commodities. Oops! The government want energy security and when it comes to domestic capacity the government wants enough in place so that going to 4 shifts a week would keep the economy running. Not a bad plan but who pays for it? Industry doesn’t want to run that much excess capacity.
Back to industry again. I was just reading that CATL’s sodium ion battery is as energy dense as LFP, I imagine that automotive execs are just as surprised as I was. Scaling back the current factory is probably to the lowest contractual allowable lithium purchasing. Make up the difference later when we can use domestic sodium ion…