Elon Musk warns Ford of tough margins on new vehicles
TED
It should not be surprising that Elon Musk is lending his support to Ford. The long-established automaker has faced challenges in transitioning to electric vehicles. It revealed massive losses on EVs last week. While critics were quick to jump all over the legacy automaker, Tesla's CEO Elon Musk praised Ford's EV strategy on Twitter.
Ford's Model E Reports Losses Amid Shift to EVs
Ford's first-quarter results for 2023 revealed a loss of $700 million before interest and taxes for their Model E division, which is responsible for the development of electric vehicles. The EBIT margin for Model E was -102.1%, more than twice the -40.4% margin recorded in the fourth quarter of 2022. Ford only delivered 12,000 electric vehicles in the first quarter, resulting in a loss of $58,333 per clean car sold. Ford's Model E business is expected to lose $3 billion before taxes in 2023.
These losses have been attributed to higher costs related to engineering, spending, and inflationary pressures. Ford also reported weak sales volumes due to scheduled downtime at their Cuautitlan assembly plant in Mexico, which aimed to increase the Mach-E capacity to 35 jobs per hour.
Elon Musk Defends Ford's EV Strategy on Twitter
Recently, Tesla was compared to Ford from 100 years ago. When Henry Ford created the assembly line, it revolutionized auto manufacturing and put several car makers out of business. While Musk understood the comparison, he disagreed with ending the competition. Tesla has opened all of its patents to competitors, staying true to its mission: to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.
Responding to a tweet criticizing Ford's negative margins on electric vehicles, Musk acknowledged the challenges of transitioning to new technologies and praised Ford's EV strategy as "smart." He also highlighted the high demand for the electric F-150 Lightning.
This exchange occurred amidst a price war between Tesla and Ford. Tesla has lowered its vehicle prices six times this year, forcing Ford to cut the Mustang Mach-E's price by up to 8% to remain competitive.
Ford's Goals for Model E and Electric Vehicle Fleet
Despite the setbacks, Ford has set ambitious goals for its electric vehicle lineup. The company aims for a global EV production of 600,000 units by the end of 2023 and two million by the end of 2026. By 2030, Ford anticipates that 40 to 50% of its vehicle fleet will be electric, with a pre-tax profit margin of 8% for its Model E division.
Despite Ford's current struggles in transitioning to electric vehicles, the company has ambitious goals for the future, and even Musk believes in its strategy.
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Tesla recently showed off Giga Small Haus, an interesting new display project hosted at Giga Berlin. The small new house is located just outside the main entrance of Tesla’s Giga Berlin factory, with a Quicksilver Model Y parked inside.
Giga Small Haus is powered only by solar and Powerwall 3 - disconnected from the local grid and from Giga Berlin itself. It serves as a live demonstration of Tesla Solar and Tesla’s Powerwall battery backup.
Giga Small Haus
The centerpiece of the display is a Model Y in Quicksilver - a beautiful pick for a beautifully lit house. However, that’s not the real focus here - it's the Powerwall and Gateway on the wall.
The Powerwall is the focus of Giga Small Haus, and there’s a display with some additional information on the wall. Part of the display also includes a screen that displays the current output of the Powerwall itself versus the consumption of Giga Small Haus, as well as the input from solar.
The interior exhibit of Giga Small Haus
Not a Tesla App
The text on the exhibit is divided into several sections. Here’s a translated and edited version of what we can see from Tesla’s images. Some additional text is obscured. If someone visits Giga Small Haus, let us know.
Powerwall
Powerwall is a home battery system that stores energy from solar panels, the electrical grid, or during off-peak hours and powers your home during the day or during a power outage.
With Powerwall, you can use self-generated solar energy during the day and night, thus avoiding high electricity costs. You can also store excess energy produced during sunny periods for use during times of low production or power outages.
Key Features
Energy Storage: Powerwall stores excess energy from solar panels or the grid for later use or during power outages.
Backup Power: In the event of a power outage, Powerwall automatically switches to battery power to ensure continuous power supply.
Integration: Powerwall can be seamlessly integrated with existing solar systems and other power sources.
Scalability: Multiple Powerwalls can be installed to meet higher energy storage needs.
Smart Energy Management: Powerwall works with Tesla's software to optimize energy consumption and reduce costs.
How Powerwall Works
Storage: During the day, when solar panels produce more energy than needed, the excess is stored in Powerwall.
Usage: At night or during times of low solar production, the stored energy is used to power the home, reducing reliance on the grid.
Backup: During a power outage, Powerwall automatically provides power to critical circuits, ensuring continuous operation of essential appliances.
Benefits
Cost Savings: By storing and using solar energy, you can reduce your electricity bills.
Reliability: Provides backup power during outages, ensuring your home remains powered.
Sustainability: Promotes the use of renewable energy by storing excess solar production for later use.
Overall, Giga Small Haus is an interesting real-life demo of what Powerwall and Solar can accomplish. It would be neat if Tesla built more of these displays - perhaps near major Delivery and Service Centers and at Giga Texas, Fremont, Giga Shanghai, and other facilities. Many Tesla owners have yet to learn about and experience some of Tesla’s Energy products.
Tesla has added the Acceleration Boost option to the Tesla store for owners of the 2024 Model 3 Long Range - specifically owners in Australia and China. Acceleration Boost is an upgrade that provides a significant performance boost, drastically narrowing the performance gap between the Long Range and Performance versions of the same model.
This upgrade will likely become available in Europe, Canada, and the United States in the next few days as Tesla updates its shops globally.
Acceleration Boost
This new Acceleration Boost is retailing for $3,000 AUD, or approximately $2,000 USD. That’s the same price for current owners of older Model 3 or Model Y Long Range vehicles, which all have the option to purchase Acceleration Boost through the shop.
The boost provides improved 0-100km/h (0-60mph) performance, bumping the 2024 Model 3 LR from 4.4s to 3.8s. The 2024 Performance version comes in at a blazing fast 2.9 seconds, so while it isn’t equivalent to just buying a performance variant in the first place, it is still a noticeable and significant upgrade.
Performance variants also come with a different front fascia vent for cooling, performance drive units, sport seats, adaptive suspension, 20-inch wheels, and Track Mode V3. That’s a significant number of additional features in the $10,000 USD price difference between the Long Range and Performance versions.
Should You Buy It?
If you’ve purchased a Long Range model and are itching to go just that little bit faster at every red light, this is the upgrade for you. It previously came with the cost of slightly reducing vehicle range, but the Tesla store doesn’t make a note of reduced range this time around. The 2023 Model 3 and Model Y Long Range models had an efficiency loss of about 5% due to the additional always-available acceleration and cooling.
You could drive in Chill mode to mostly negate that efficiency loss, but what’s the fun in driving in Chill when you just got Acceleration Boost? Anyhow, the shop listing for the 2024 variant doesn’t include this detail, so it's possible Tesla may have worked some more engineering magic.
Overall, if you’ve got the $3,000 AUD burning a hole in your pocket, some Tesla referral credits sitting around, or just want to go faster, it's definitely an upgrade many users find valuable.
