(Oil & Gas 360)—Ford’s ongoing ”market therapy” regarding a less-than-enthusiastic reception for its three electric vehicle (EV) models is costing the company about $3 billion to convert a Canadian plant from its purpose-built EV design to produce more of its Super Duty truck models (F-250, 350, and 450).
Trucks constitute the lion’s share of Ford’s business; its F-150 internal combustion engine (ICE) pick-up has been the top vehicle sold in the country going back some forty years. The F-150’s EV parallel is the Ford Lightning. Nearly 25,000 were sold in 2023. Over 750,000 ICE Ford-150s, 250s, and 350s were sold that same year.
The production line retrofit falls outside the $30 billion CEO Jim Farley has said Ford would invest to reach production capacity of 600,000 EVs a year this year or next. It manufactured fewer than 40,000 in 2023. Ford’s EV alternative to its fabled Mustang is Ford’s Mustang Mach-E; it also offers an EV/ICE hybrid of its Escape model. Ford stock has remained essentially flat since 2023.
GM sold nearly twice as many EVs as Ford last year; it offers more than twice as many models. Its (then Chevy) Bolt, their flagship EV introduced in 2016, was bought at a rate higher than twice that for its other EVs (Blazer, Silverado, Hummer, Cadillac Lyric) combined. GM’s Equinox is the company’s latest EV offering.
GM appears most committed to an EV future. CEO Mary Barra outlined GM’s vision two years ago as helping create a transportation world with “0 crashes, 0 emissions, and 0 congestion.” GM stock is up about 23% since the start of 2023.
Toyota has been the most cautious regarding the full-scale transition to an EV future. Instead, it is focused on hybrids, claiming they are more environmentally friendly and attractive to buyers. Sales of EV-only vehicles accounted for less than one percent of Toyotas sold in 2023.
Toyota says it’s also exploring hydrogen fuel cells and synthetic fuels in its approach to offsetting carbon. Though it currently projects producing 3.5 million EVs before the end of the decade, the company also notes that supply chain and infrastructure constraints make EVs untenable in many parts of the world for the foreseeable future. Toyota stock is up about 80% since 2023.
Tesla remains the market leader with 55% market share. That said, performance and production issues have seen the company respond with price cuts in order to meet production goals and stave off competition. The stock has doubled since 2023.
Slowing EV demand could affect infrastructure plans to address what are called “charger deserts” that result in range anxiety, one of the major risks cited by potential buyers. In addition to range anxiety there are issues surrounding quicker battery depletion during cold weather.
Nearly 9,000 charging stations are spread across the U.S., though at current growth rates, there could be more charging stations than gas stations in eight years, according to Bloomberg News.
Policymakers worry about the potential ending of public funding of charging stations and note that despite using public highways, owners of EVs pay no gasoline tax for their upkeep. Inoperable charging stations are far more prevalent than gas stations, and there are reports of stations being targeted by thieves for the copper installed in the equipment.
Other public policy concerns include safety issues. For instance, nearly a third of the weight of 9,000 pounds of the GM Hummer is from the battery pack; fatalities grow 47% for every 1000 pounds in a collision. Even guardrail failure has been reported from impact with the heavier EVs, and tires wear out more quickly, as do older roads and even parking garages.
By Jim Felton for oil&gas360.com
