Ford is hiking up the price of the base F-150 Lightning Pro for the second time in two monthsPorsche is now Europe’s most valuable carmaker after its IPO, and Honda is planning to drastically cut vehicle output at two plants in Japan this October. All that automotive goodness and more in The Morning Shift for Thursday, October 6, 2022.
1st Gear: Ford F-150 Lightning Pro Prices Go BRRRRRR
Ford is once again raising the price of its entry-level F-150 Lightning Pro. It’s the second price hike in as many months, and Ford says it has to do with rising material costs and supply chain issues.
The base-level electric truck will now set buyers back $53,769 to start, including tea $1,795 destination fee. That’s up from a base price of $48,769 with destination that was set in August. When the Lightning Pro first went on sale, it came in at under $40,000. From Automotive News:
Ford at the time said it was able to price the Lightning so aggressively because of scale and by sharing some common parts with its existing full-size pickups.
“We have an aluminum-bodied vehicle that’s already the head of its market. We didn’t need to retool the whole thing,” Darren Palmer, Ford’s vice president of EV programs, said at the time. “As a result, we can offer a vehicle at that price with this whole lineup and make money on it.”
However, executives have noted in recent months that rising commodity costs have wiped out early profits on the Mustang Mach-E and other EVs.
Auto News reports that Ford says inflation-related supplier costs are going to be about $1 billion higher than expected in the third quarter of 2022. The company also says it will finish that time period with between 40,000 and 50,000 unfinished vehicles that are waiting on parts. Most of them are reportedly pickup trucks and other utility vehicles.
2nd Gear: Move Over VW, Porsche is the New Top Dog
Porsche has now become Europe’s most valuable automaker. It overtook form parent company Volkswagen on Thursday. The brand now has a valuation of 85 billion euros (about $84 billion).
In comparison, Volkswagen is only valued at about 77.7 billion euros. Rounding out the top five most valuable automakers in Europe are Mercedes-Benz (57.2 billion euros), BMW (47.5 billion euros) and Stellantis (39.7 billion euros). From Reuters:
“Inflation data from Europe and the United States, recent worries over energy supply in Europe and the escalation of the war in Ukraine last Thursday led to fluctuations which made small-scale stabilization measures necessary,” a spokesperson for Volkswagen said.
The shares purchased between Sept 29. and Oct 4. represented around 11% of the total trading volume since the listing, the spokesperson added, consisting of around 34 million shares.
Overall, up to 14.85 million shares worth 1.2 billion euros are available via the greenshoe option in the four weeks after the offering as a stabilization measure.
Ya know what, good for Porsche. It’s rare such an underdog does so well. Also, before you get angry with me in the comments, I promise this is sarcasm. Tune in text time for when Volkswagen overtakes Porsche, and round and round we go.
3rd Gear: Honda Cuts Japanese Production
Honda has announced it is going to reduce vehicle output by 40 percent at two plants in Japan for the rest of October. It’s a deviation from earlier plans, because the company is dealing with – you guessed it – supply chain issues. Wild, I know.
Two manufacturing lines at Honda’s Suzuka plant in Japan will cut production by about 20 percent in October. That’s small potatoes compared to the cuts it’ll see at another plant in Saitama prefecture. Honda plans to cut production there by nearly 40 percent for the rest of this month.
These cuts come on top of plans Honda already announced to cut production in Suzuka by 40 percent in October and Saitama by 30 percent during the same time period. From Reuters:
Honda blamed delays in receiving parts and logistics on COVID-19 outbreaks and semiconductor shortages. The output reduction will affect vehicles including the Vezel sport-utility vehicle, Stepwgn minivan and Civic compact car.
Honda’s production at the two plants returned to normal for June after an earlier reduction but it began making adjustments again for July.
That announcement came about a week after it had lowered the production target for that month to around 800,000, about 100,000 short of its average monthly production plan.
In a similar but less drastic move, Toyota is also lowering its October production target by 6.3 percent because of the semiconductor shortage.
4th Gear: A $1.6 Billion Battery Factory For Michigan
Our Next Energy Inc. (ONE) is an EV battery startup that involves numerous former Apple executives, and it’s about to invest a reported $1.6 billion into a Michigan factory with the goals of making enough batteries to power 200,000 EVs every year.
On Wednesday, the state approved a $200 million grant for the project that’s set to happen in Van Buren Township, about 10 miles west of Detroit’s airport. The goal is for it to be fully operational by the end of 2027 and create 2,112 new jobs. If the company doesn’t hit that jobs target it could end up with Michigan taking back the funds. From the Wall Street Journal:
The investment is part of an influx of battery capacity being built in the US as companies race to provide car makers with the cells they will need for all of the EVs they are planning. That effort has only intensified following the enactment of the Inflation Reduction Act, which aims to jump-start domestic battery production. The law ties consumer tax credits for buying EVs to how much battery material comes from domestic production.
The Inflation Reduction Act has literally been made [our] phone ring off the hook,” Mujeeb Ijaz, founder and chief executive of the company, known as ONE, said in an interview. “We’re seeing a lot of emphasis on the US supply chain and US cell manufacturing.”
The company said it plans to produce at full capacity 20 gigawatt hours, including lithium iron phosphate cells, annually or the equivalent of battery packs for about 200,000 vehicles each year. ONE hasn’t said which car makers it will be supplying.
The US automotive industry has largely been focused on another type of cell technology—lithium-ion cells—which has a higher energy density but can also be volatile. So-called LFP technology is less volatile and less expensive but typically has less range. LFP has been getting a new look by some auto makers concerned about battery fires, and some who have warmed to the technology as a workaround for some of the raw materials shortages hitting the industry.
It’s reported that ONE has already raised $197 million and is aiming to raise about $150 million by the end of this year.
Numerous former Apple car employees have joined ONE’s ranks, including Steve Kaye who joined the company as ONE’s chief technology officer. Former Apple vice president of special projects Steve Zadesky also joined as an adviser for ONE.
5th Gear: GM Financial Pays Up For Being Jerks
GM Financial has agreed to pay more than $3.5 million because it has been accused of violating US federal law that provides some benefits and protections to certain eligible service members, according to the Justice Department. From Automotive News:
GM Financial was accused of violating the Servicemembers Civil Relief Act by illegally repossessing 71 service members’ vehicles and by improperly denying or mishandling over 1,000 vehicle lease termination requests, the Justice Department said in a statement on Wednesday
GM Financial did not immediately respond to a request for comment. It is a wholly owned subsidiary of General Motors, and provides financing for vehicle sales and leases. In 2021, GM Financial had revenue exceeding $13 billion.
In a complaint filed in US District Court in Dallas, the department alleged that since 2015 GM Financial had improperly denied servicemembers’ lease termination requests, charged servicemembers improper early termination fees or lease amounts after the date of termination, and failed to provide servicemembers timely refunds of lease amounts they paid in advance.
GM Financial has agreed to pay $3.5 million to the affected servicemembers and a $65,480 civil penalty to the US government, the Justice Department said, adding that the company will pay at least $10,000 to each of the 71 servicemembers who had their vehicles unlawfully repossessed.
After a potential violation involving a US Army chief warrant officer was brought to the attention of the Justice Department, it began investigating GMFinancial.
$3.5 million may not sound like much, but I suppose it is something.
Reverse: The First Draft of Bullet Train is Written
Neutral: I Saw Don’t Worry Darling And It Stunk
I went into this movie with some very low expectations. They were so low, in fact, that during the movie I found myself actually enjoying it. I clearly went too far in the opposite direction to beat out my own preconceived bias toward it. When it first ended I actually left the theater thinking it was good.
Then…disaster. I thought about it more, and I realized it was actually dogshit. He was a real bummer. You should still watch it though, because participating in discourse is always fun.