Weekly News

Ford Cuts F-150 Prices as Electric Truck Competition Heats Up

As Ford seeks to take control of the electric truck market, they announced significant price cuts on its electric F-150 Lightning pickup truck. The announcement comes as Tesla's Cybertruck enters production and Rivian's electric pickup continues to capture attention. The price reduction, nearing $10,000 for some models, narrows the gap with the average cost of comparable ICE vehicles.

The strategic price cuts come as Ford navigates improving battery costs and implements production enhancements at the Rouge Electric Vehicle Center in Michigan. Despite earlier challenges with battery components that temporarily paused EV production and raised prices, Ford is on a path to return the electric F-150 to its initial pricing vision.

The price revision lowers the standard Pro model from $59,974 to $49,995. The Lariat 510A model decreased from $76,974 to $69,995, and the Platinum Extended Range model sees a reduction from $98,074 to $91,995.

The move comes ahead of the emergence of Tesla's long-awaited Cybertruck, which is anticipated to start at around $50,000. The Rivian R1T electric pickup, on the other hand, begins at $73,000.

While the F-150 Lightning's initial launch may not have fully met expectations, with sales of only about 15,000 units last year, Ford has big ambitions as it plans to ramp up production to 150,000 units per year starting this fall.

Rivian Wins Approval for $5Bn Georgia Facility

Despite substantial opposition, the Georgia Supreme Court has declined to hear an appeal contesting the legitimacy of Rivian's expected tax breaks for its new $5 billion EV facility. Once fully operational, the 2,000-acre facility will be capable of producing up to 400,000 EVs annually, significantly outpacing the 150,000 EVs per year capacity of Rivian's existing plant in Normal, IL.

This breakthrough comes at an opportune time for Rivian, which recently surpassed analyst expectations by delivering 12,640 EVs in the second quarter while producing nearly 14,000. Moreover, the Georgia facility, projected to employ 7,500 workers and stimulate thousands of supplier and related jobs, will bolster Rivian's production capabilities, allowing them to meet its growing demand. Production is expected to kick off in 2026 with Rivian’s R2 series.

Tesla Q2 Revenue Grows to $25Bn but Margins Take Hit

In the second quarter of 2023, Tesla reported a 20% year-over-year increase in net income to $2.7 billion, fueled by record Q2 deliveries of 466,140 units. However, the automaker's aggressive EV price cuts in multiple markets, part of a strategic push to enhance sales, have led to pressure on profit margins.

The gross margin of the company declined for the second time this year to 18.2%, a considerable decrease from the 25% reported in Q2 2022 and slightly down from 19.3% in the previous quarter. Nevertheless, Tesla's revenue matched Wall Street's expectations of around $25 billion, marking a nearly 50% surge compared to the previous year's sales of $16.9 billion.

On another note, Tesla has been opening its Supercharger network to other automakers like Ford, GM, and most recently, Nissan. The potential revenue increase from this initiative is yet to be seen. Despite minor changes, Tesla's full-year outlook for 2023 remains on target. Tesla is working to deliver around 1.8 million vehicles by year-end, keeping pace with its 50% annual growth rate.

In an interesting but not unexpected revelation, Tesla also noted that it's working with a major OEM on licensing its Full Self-Driving (FSD) technology. Who could this be? Reply to let us know your guesses!

Education Corner

The Continued Role of 12V Batteries in EVs

Did you know that EVs still typically have a traditional 12-volt battery? In an EV, two distinct electric systems work in unison. The high voltage system powers the vehicle, while the low voltage system provides user comfort and safety, including running the infotainment system and triggering airbags in the event of a crash. Hence, both a high voltage and a low voltage battery are necessary.

The lithium-ion battery can charge the 12V battery using DC-DC converters, which convert the high voltage from the lithium-ion battery to a lower voltage suitable for charging the 12V battery.

Looking to the future, lithium-ion batteries are beginning to replace the traditional lead-acid 12V batteries in some new EV models, like the latest Tesla Model S and X. The transition to lithium-ion batteries is due to their lighter weight and increasing efficiency. Lead-acid batteries are known to fail faster in EVs than in conventional vehicles, as they are designed for high current draw, which isn't required in EVs.

While an EV might be futuristic in many respects, it still relies on a 12V battery.