Ford writes off $20 billion EV venture. Vin-Fast, with $65 billion of investor money, fails completely.

Photo Above - the quaint Merry Oaks Baptist Church is being blamed for the failure of a $65 billion EV company. But the facts are more complicated, as usual. And taxpayers may have saved a bundle . . .

Ford’s value (market cap) was $54 Billion yesterday. Today it wrote off $20B on its failed EV ventures. Does that mean Ford’s actual market value is now $34 billion, and their stock should also fall 40% - from $13 to $8? I'm not holding my breath, although I do have a longstanding alert at Merrill if Ford returns to it's 52 week low ($8.12, in April).

Evidently Ford is killing off more than one EV. But the model dominating the headlines is the electrified F150 Lightnin' pickup. Turns out there’s NOT actually unlimited demand for battery trucks costing nearly $100,000. Who would have predicted THAT?

“Trump’s policies” gets the blame from Democrats for Ford's decision. But that’s BS. You can’t call an EV car or truck successful if people only buy it with a $7,500 bribe. Only 6,000 Lightnings were sold since the start of the year. Consumer demand was going to be unlimited, right? Owners would be desperate for bragging rights at the Home Depot parking lot on Saturday mornings.

Ford is also halting construction on its Kentucky Battery Plant (thank you again, taxpayer subsidies) as part of the write-off. Evidently those batteries are not only too expensive for vehicles, there’s no also demand for them as home “power wall” systems to store solar energy for use after sundown.

The culprit here is EV technology itself. It's still not affordable. Planet earth is still stuck with liquid sodium ion EV batteries. Which cost a fortune to assemble, weigh a ton, and catch fire when you least want it. The long promised (cheaper, better, lighter) solid state batteries are still nowhere on the horizon, despite dozens of announcements in the past 2 years about amazing breakthroughs.

In case you think I’m picking on Ford, you’re wrong. The biggest EV collapse this week was not Ford, or the continued cratering of Tesla sales. It was "Vin Fast", a company you never heard of. InVietnam. For a couple of months this EV maker was the “most valuable car company on earth”, because investors rushed to pour $65 billion into it. Headquarters in Hai Phong. $65 billion! To be fair to Vin Fast, they WERE talking up a possible North Carolina factory. But ran into opposition when their plan involved bulldozing a 2 room Baptist church built in 1888.

Or maybe the Vin Fast factory killed was because they were losing $3 billion a year on their cars. Politicians in North Carolina promised to shower $300 million in taxpayer money on Vin Fast for it’s proposed factory after seeing the artist's renderings. Taxpayers dodged a bullet this time. Vin Fast’s failure certainly has nothing to do with Trump’s policies either. They failed because of crappy design, lackadaisical assembly, and overambitious pricing. Let’s see if someone uncovers embezzlement and fraud too, okay?

I’m just sayin’ . . .

Ford retreats from EVs, takes $19.5 billion charge as Trump policies take hold

The electric Hummer is almost outselling the F-150 Lightning | TechCrunch

Is VinFast Going Out Of Business? - CarsDirect

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ArishMell · 70-79, M

It's wrong to allege or even insinuate fraud unless you have definite evidence, but what you describe there boils down to poor policies by Ford itself, and an unthinking rush to invest .

That last made me wonder if the EV industry is becoming another "bubble", though, given the vast investments and promises by Ford and Vin Fast.

Then decided, probably not, at least not world-wide.

I think Ford is a bit behind the times because other manufacturers in Europe and Japan, and Tesla in the USA, have been successfully building and selling fully-electric and hybrid cars for some years now. They also seem to be solving the problem of making heavier, battery-electric vans of 1 to 1.5t capacity; previously of limited power and range for size and capacity.

As yet I don't think anyone has really made a battery-powered, heavy, off-road works vehicle equalivalent to the 'Ford Lightning' and Toyota 'Hi-Lux'. The nearest US one is the Tesla 'Cybertruck' but its use is probably limited, it has a poor quality reputation and it does not meet the construction regulations in many countries already importing the Tesla saloon cars without difficulty. I am sure it will come, but from the likes of Volkswagen which is already making medium-size E-vans so has the relevant engineering and market experience.

I can understand buyer reluctance in a continent-sized nation like the USA, with very big distances between towns, but the ranges of ordinary battery-electric saloon cars have increased considerably from their early versions.

The manufacturers' problems are technical (but although the fire hazard exists its risk is probably over-stated); but perhaps more so of market-judgement; and it would seem Ford and its investors failed on the second.

They are by no means the first company to do so and won't be the last. However, though you might think a conglomerate owned and run by remote, mere money-men likely to make such a gross error, you'd not expect it from a long-established, major company within its own industry.

......

Ironically, battery-electric cars, light vans, even small lorries were common in many European and American cities more than 100 years ago.

The City of London even allowed electric cars on the roads in the Royal Parks, from which the new-fangled petrol ones were barred due to their noise and their noisome exhaust! These early EVs were out-competed largely on range by the internal-combustion engine, by the 1920s.

SusanInFlorida · 31-35, F

@ArishMell i am truly sorry for even THINKING that some guys with zero tech experience in Vietnam would create a start up, collect $65 billion from greedy investors, then go out of business.

they would NEVER do that.

ArishMell · 70-79, M

@SusanInFlorida Mmmm! I take your point, though perhaps it shows far more gullibility than anything else. Though it would be something for the finance trade and the Vietnamese police to look into...

ElwoodBlues · M

@ArishMell Regardless, Henry Ford went bankrupt, twice, in the automobile business before he succeeded with Ford Motor Company.

@SusanInFlorida is suggesting that if the first attempt isn't successful, then the business is a bad idea. That's patently absurd, and Ford's own history proves the value of persistence and refining the approach.

ArishMell · 70-79, M

@ElwoodBlues Was Ford a better engineer than business-man, then? He must have learnt from his mistakes. Either that or the trade caught up with him, allowing his new ideas to succeed.

SusanInFlorida · 31-35, F

@ElwoodBlues whats your point here? ford actually made affordable vehicles that were "best in class" at the time. he didn't make a cheap knockoff of something else and price it sky high.

ElwoodBlues · M

@SusanInFlorida says

ford actually made affordable vehicles that were "best in class" at the time

And yet it still took over ten years for Model T sales to take off. Do you suppose Henry Ford's detractors were declaring not only the Model T but gasoline automobiles in general a failure after the first 3 years of disappointing sales??

whats your point here?

My point is that reports of the death of the electric vehicle are greatly exaggerated.

ArishMell · 70-79, M

@SusanInFlorida He did, and part of the secret of course, allowing that affordability, was developing the assembly-line system.

He did not invent the concept completely. That had come mainly from clock- and arms- manufacturing in different countries; but he worked it up into an industrial scale. The assembly-line is still with us of course, but with far more automation it needs far fewer operators.

I think he was also not afraid to develop the products, in an era when many manufacturers were content to think their successful designs would continue to be successful. Consequently when Ford built its first factory in the UK, assembling imported Model T kits, it soon built a brand-new factory that produced the Model A, Y and later cars; and now has a very large R&D site as well as two production factories here.