Alright, I get it. Remember, we are dealing with legacy autos. They are beyond business.
Leave that for desperate hard working entrepreneurs. It's far easier just to game the
system. It's very simple, the US auto industry basically a cartel to oppress competition.
Every single auto start up in the US has gone under, the big 3, Chrysler, GM and Ford
would oppress them every way. Yes, one of my favorites is the Tucker. Even the
almighty John Delorean couldn't hack finding a car business. And he was the ex-ceo of GM,
he knew the industry inside and out, he had all the contacts, and still failed.
It's a shame, it was a really cool car, if it was reliable and actually had some
performance. And yes, I wish someone would make an electric version of it,
or some sort of cybertruck looking coupe. Imagine a Tesla sports car, with Falcon Wing doors,
and a Cybertruck exoskeleton. Ok, well that's my dream car.
Alright, I digress, anyway, I like I was saying basically the big 3 game the system. We are all
witnessing right now and of recent just how far cronyism will get you. The UAW contribute to
Biden. Biden is not a charity, they expect that Biden has their back. Just like Obama had GM's
back when they went bankrupt. It's a great deal, as we know there something like a 95%
correlation between campaign budget and getting elected. I think Trump was the
biggest anomaly ever to this, I think he had less than half the budget of Clinton.
Therefore candidates like as big a budget as they can, which is why Senators spend
an average of 30 hrs a week fund raising. You get elected with a budget, not serving people.
By the way, I think it was Franklin D Roosevelt, who passed a law banning contributions
from unions. The unions got around it, and instead the union members made the donations.
So we have been hearing Biden praise Ford and GM, but not Tesla. Elon didn't contribute to Biden's
campaign. So legacy went in full force to try and stop Tesla, but it didn't work. They were almost
going to get a $12,500 rebate off their vehicles. Which was ridiculous and unafforable anyway.
So we know the level of ethics these people play at.
Well now they are discovering cronyism isn't going to be enough this time,
they need to look at a new strategy to maintain all their wealth and power.
Now, it wasn't hard for us to work out where their major headwinds are. If we can work it out,
then hopefully they can too. It's obviously about getting costs down, and they have lots of extra
expenses, probably in the region of $15,000 extra per vehicle, compared to Tesla, for car dealers,
unions and logistics. I didn't even include batteries, or any of the costs of goods sold.
Ford is sinking, we know people like Farly and Bara are lying when they say they are aiming
for 50% EVs by 2030. Do you think what they are really saying is this? "To our shareholders, don't
you worry, people will actually still be buying our ICE cars even in 2030, oh and further on,
only 50% by 2030. Yes our ICE business isn't going anywhere any time soon."
Remember Tesla is going to be eating their market share. If Tesla are selling 20 million EVs,
then that's 20 million less vehicles that Ford, GM, VW, Toyota, etc sold. And if 5 million
vehicles of Tesla's production are Robotaxis, then that's another 20 million replaced.
These are lies. Oh even worse, statistics, no even worse, lying statistics. The CEOs have to keep
the shareholders happy. They believe what they are told. They aren't aware of what's really going on.
It's hard to believe, as what Tesla are doing is unbelievable.
But in actual truth, these CEOs are going to jump ship. Farley is going to jump ship
from Ford Blue to the electric division known as Model E. This will be a separate company,
solely owned by Ford. As it is a Ford subsidiary,
then it is entirely justified that Ford Blue can fund the growth of the Model E start up.
Although I really find $50 billion unlikely, I just can't see how they can get that much funding.
Either way, they do have a lot of cash flow, and Ford Blue could fund Model E.
Now as Model E is a separate division, in a new company, it doesn't hold all those same
obligations to the car dealer networks, and may be able to get around them.
Ford may also decide not have unionized labor. They need to get costs down,
it's about $5,000 per vehicle for unions, where as stock based compensation at Tesla
is only $1500. And Tesla stock is worth a lot more than belonging to a union.
Then with some logistics tidying, and more copying what Elon is doing. Building their
new factory plants, which they claim will get the cost down to $100 kWh for batteries.
This I don't believe, but compared to what they must be paying now,
perhaps they can reduce it by half. They must be paying around $20,000 for their battery
packs currently. If Ford saved $10,000 there, within time, then that is huge.
Yup, those numbers look better. Therefore, perhaps Ford Blue
can fund Model E long enough until they break even, and then... Well then they go their
separate ways. Model E floats on the market. Ford's ICE business continues to decline,
and obviously it won't take much to send it into some serious losses. Ford Blue,
will be gone. But all the executives, well they jumped from that sinking ship.
Model E got everything it needed, all the debt can remain on Ford Blue,
and it can just be written off. Loans reneged, and will likely be felt in the economy,
particularly of all legacy autos have conned on to this.
I expect next we might hear GM's new Ultium company launching.
Now they have found their potential lifeboat. Perhaps this new EV division is humble enough
to accept Tesla's charging network too and FSD. You know it might actually have some potential.
But look at how valuable Rivian and Lucid became. Perhaps Model E could get p/e
ratios like that too. Surely that has crossed Ford's minds. If we can sell 2 million EVs,
and manage to scrape just $3,000 net profit per car,
then that's $6 billion profit a year. If you assign a p/e of something like 50 on that,
then you have a $300 billion valuation. Don't forget this will be accompanied with all the
hyperbole, the media, and advertising, oh and the government if they are still using unions.
Fine the old company went bust, it was only worth 1/4 of what the new on is worth.
Now of course, all of this isn't to say that they will be able to make EVs any better.
EVs are still not legacy autos industry, and never were. Just because they have an actual
EV business now, doesn't mean they know how to build EVs yet. They could have started their
own search engine company too, but people wouldn't expect them to compete with Google.
Yet people expect that Ford may be able to compete with Tesla? It's like the phone book
trying compete with Google. Their legacy industry has been replaced. They have been
creatively destroyed. Just because Ford's product has 4 wheels and steering wheel,
and so does Tesla's, doesn't mean Ford can learn how to make EVs.
No one to this date, aside from Tesla can make an EV right yet. None can hit volume production
or profits, not only that, they aren't even close, and are running out cash quick. Sure,
when Model E floats, it will likely get a further $10 or maybe even 20 billion dollars cash. But
Ford have to ramp up quick, they aren't some niche brand like Rivian, who can ramp up slowly
with high end vehicles. The Ford brand has been established, its mainstream, and affordable.
Now back to the 2 million EVs a year in 2026 year. I know, he did really say that. But you know what,
Ford might actually achieve that, because do you know what, Ford are increasing their EV investment
all the way to $50 billion. If you throw enough money at it, then it will obviously happen.
And that has surely got to be enough money for just about anything.
In fact with a budget like that, you'd think they can compete with Space X whilst there at it.
2026 is 4 years away. Ok, well Tesla is at 1 million today, not even half what Ford claim
to be at in 4 years. So how about we check on where Tesla was 4 years ago? Tesla had
hit volume production, all the way back in 2018. Volume production in 2018, with their
own operational battery factory in association with Panasonic. Elon said Tesla are not cash
constrained some time ago, implying an additional $50 billion, wouldn't make any difference.
Did you hear that? Tesla were already at volume production with the Model 3
4 years ago, along with all the other experience with their previous models. From there it took
Tesla 4 more years, with all the best engineers in the world, to hit 1 million units a year.
Ford, are at about 1/10 the rate of volume production currently. They have no battery
factory ready as of yet, in fact I don't think its meant to be ready until 2025.
Yet they think they can accelerate their EV production literally, and do mean literally,
20 times as fast as Tesla. Yes, I said twenty, that is what they are claiming.
Oh also, they don't have Elon Musk either, that helps a little bit too.
Anyway, I really hope the legacy autos don't get away with this,
they should sink with their ship, and not be allowed this life line.