Can Ford and GM hit their EV targets? Analysts weighs in
Ford (F) and General Motors (GM) are gearing up for likely the biggest transformation the auto industry has ever seen. With electric vehicles expected to continue replacing ICE vehicle sales at a record pace, both automakers are striving to boost production significantly by middecade. Will GM and Ford hit their EV targets? Let’s see what analysts have to say.
Ford targets a 2 million EV run rate by 2026
After selling just 10,866 electric vehicles in the first three months of 2023, Ford lost its position as the second-largest EV maker in the US to GM.
The lower output was mainly due to downtime at its plant in Mexico to boost production of the Mustang Mach E in the second half of the year. As a result, Mach-E sales fell 20% after a strong run in 2022. The automaker’s highly demanded F-150 Lightning also saw lower output after halting production earlier in the year.
Ford’s Model e electric vehicle segment generated $700 million in revenue, down 27% YOY. The unit’s operating losses grew to $722 million, more than doubling compared to Q1 2022.
Despite the setback, on the earnings call that followed, Morgan Stanley analyst Adam Jones questioned Ford CEO Jim Farley on his EV targets, saying:
I just get a little nervous with the 2 million unit capacity target that you have hanging out there for the second half of 2026, which, just in my opinion is a crazy high number.
He asked, “Can I get you to verify that volume target?” Farley responded, “Yes, absolutely.”
Farley believes Ford will be able to cut costs on its current EV lineup and implement what it has learned to enhance efficiency with its second-generation models, booting output, and profitability. For example, Farley says Ford brought the bill of material on the Mustang Mach-E down by $5,000.
With Ford projecting a $3 billion loss this year on its EV unit and pricing pressure mounting from Tesla’s recent price cuts, many doubt the company’s ability to hit its goals.
Ford believes its Model e division will achieve an 8% operating margin by the end of 2026, compared to a negative margin rate of 102% in the first quarter.
Morningstar analyst (via Bloomberg) says the “skepticism is a byproduct” of Ford’s results over the past few years, explaining:
People are saying: “It’s great you’re saying 8%, but until you do it, I just can’t believe you.”
Farley will try to win over analysts and investors next week as the company highlights its $50 billion EV investment plan.
GM
On the other hand, GM sold over 20,000 EVs for the first time in three months in Q1. The growth was mainly driven by Chevy Bolt EV and EUV sales, reaching 19,700 alone.
Although GM revealed it would be ending Bolt EV and EUV production later this year, the company has several high-volume models launching this year, including the Chevy Equinox EV, Chevy Blazer EV, and Chevy Silverado EV based on its scalable Ultium platform.
GM reaffirmed its target of having the capacity to power one million EVs by 2025, but a new forecast and analysis from Reuters suggests it may be a challenge.
According to Sam Fiorani, head of global vehicle forecasting at AutoForecast Solutions, says GM’s one million EV capacity target “will be difficult, based on [GM’s] planned battery production.”
GM expects its Ultium Cells battery plant in Ohio to reach full capacity by the end of the year, with its second in Spring Hill, Tennessee, expected to come online next year. A third is slated to open in early 2025 in Lansing, Michigan, with a total capacity of the three reaching at least 135 GWh, or enough to power over 1.3 million EVs annually.
However, with a slow ramp-up expected, AFS predicts the GMs battery plants will only have 58 GWh capacity or enough for about half (550,000) of its goal.
Fiorani added GMs annual targets might be limited by its ability to secure raw batteries for batteries. Despite this, GM had previously said it had enough battery materials to reach its 1 million EV goal by 2025.
Wedbush auto analyst Dan Ives chimed in, saying, “We believe GMs targets are hittable despite hurdles to get there.”
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Executives from TravelCenters America (TA) and BP were joined by local elected officials at a ribbon cutting for the two companies’ first DC fast charging hub on I-95 in Jacksonville, Florida – the first of several such EV charging stations to come online.
Frequent road-trippers are no doubt familiar with TA’s red, white, and blue logo and probably think of the sites as safe, convenient stops in otherwise unfamiliar surroundings. The company hopes those positive associations will carry over as its customers continue to switch from gas to electric at a record pace in 2025 and beyond.
“Today marks a significant milestone in our journey to bring new forms of energy to our customers as we support their changing mobility needs, while leveraging the best of bp and TA,” explains Debi Boffa, CEO of TravelCenters of America. Boffa, however, was quick to – but TA is quick to point out that TA isn’ no’t leaving its ICE customers behind. “While this is significant, to our loyal customers and guests, rest assured TA will continue to provide the same safe and reliable fueling options it has offered for over 50 years, regardless of the type of fuel.”
The charging hub along the I-95 offers 12 DC fast charging ports offering up to 400kW of power for lickety-quick charging. While they’re at the TA, EV drivers can visit restrooms, shop at TA’s convenience store, or eat at fast food chains like Popeyes and Subway. Other TA centers offer wifi and pet-friendly amenities as well – making them ideal partners for BP as the two companies builds out their charging networks.
“As we expand our EV charging network in the US, I am thrilled to unveil our first of many hubs at TA locations,” offers Sujay Sharma, CEO of BP Pulse Americas. “These sites are strategically located across key highway corridors that provide our customers with en route charging when and where they need it most, while offering convenient amenities, like restaurants and restrooms.”
Electrek’s Take
As I type this, BP has more than 37,000 EV charging ports operational globally, and plans to have more than 100,000 in service by 2030. The company made headlines in 2022 when it announced that its EV chargers were “on the cusp” of being more profitable than its gas pumps. Three years on, it seems like that’s a done deal.
As ever, money talks.
SOURCE | IMAGES: BP.
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The new e2500-THL and TS electric Ultra Buggies from Toro offer construction and demo crews a carrying capacity of 2500 lbs. (on the TS model), six-and-a-half foot dump height (on the THL), nearly 13 cubic ft. of capacity, and hours of quiet, fume-free operation.
Despite the second Trump administration’s loosening grip on emissions regulations, the fact remains that a growing number of municipalities in both red and blue regions of the US are continuing to clamp down on noise regulations, which means that construction crews with quiet running electric equipment will be able to get jobs that crews stubbornly holding on to diesel and gas won’t. Toro absolutely gets it, which is why its e2500-THL and TS Ultra Buggy line will be welcomed by smart crews with open arms.
For their open-mindedness, those crews will be rewarded with machines powered by 7 kWh’s worth of Toro HyperCell lithium-ion battery. That’s good enough for up to eight hours of continuous operation, according to Toro – enough for two typical working shifts.
And, thanks to the Toro Ultra Buggies’ narrow, 31.5″ width, they can easily navigate man doors on inside jobs, as well, making them ideal for indoor demolition and construction jobs. A zero-turn radius and auto-return dump mechanism that ensures the tub automatically returns to the proper resting position make things easy for the operator, too.
Toro says that each of its small (for Toro) e2500 Ultra Buggy units can replace as many as five wheelbarrows on a given job site. Pricing is expected to start at about $32,000.
Electrek’s Take
Electric equipment makes job sites cleaner, quieter, and safer than they are under diesel or gas power – and as more municipal and private sector RFPs begin to enforce ZEV requirements and quiet hours, more and more viable electric alternatives to ICE power will start to show up on more and more job sites (regardless of who is in the White House).
SOURCE | IMAGES: Toro, via Construction Equipment.
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