I Don't Know About Ford's Lightning Strategy

The more I think about it, I'm not sure there's any way you really can market an electric vehicle. All that and more in The Morning Shift for October 6, 2021.

How do you market an "eco" truck in red-blooded America? The Financial Times just put out a big article on the upcoming EV pickup scene, and it includes some sections that have me ... interested in conversations to come. From the FT:

"Initially, there will be a political challenge with these vehicles," says [Tyson Jominy, vice-president of data and analytics at JD Power]. "I don't think Ford will play up the green angle. They will play up the dollar and cents angle, and the potential tech side . . . and to try to make it apolitical."

Performance will be a critical selling point too. David Hunter, an owner of a petrol-powered F-150, has seen resistance among truck enthusiasts when they discuss the Lightning in online car forums. He says their scepticism reminds him of Ford's introduction in 2011 of the EcoBoost, a fuel-efficient six-cylinder engine. At the time, some aficionados compared it unfavourably to the roaring V8, despite the smaller engine's superior horsepower.

"Anytime there's something new there's going to be some pushback," says Hunter, who works at an auto accessories company in South Florida.

I'm not really sure there's any way to successfully market this thing at all without setting a bunch of rakes in front of yourself to step on. How Ford is going to make this F-150 seem cool and interesting when the question of towing range looms ... I would not want to be on Ford's marketing team. Maybe Tesla did the right thing by not having one.

Production has halted in Mexico thanks to the chip shortage, as Reuters reports:

Volkswagen will extend a production stop at one of its segments in a plant at the central state of Puebla that produces the Jetta model from Oct. 6 to 15, a labor union document showed on Tuesday.

It comes as the industry is facing a worldwide semiconductor shortage after manufacturers shifted production toward laptops, cell phones and video games during the pandemic.

Seems like getting semiconductor chips is a challenge these days. Has anyone else been hearing this?

Everyone sort of suspected that this chip drama would produce a real boom-bust kind of rubberband, because that's what always happens with the extremely efficient system of global markets we enjoy these days. [Coughs.]

In any case, automakers are ordering more chips than ever before, enough for them to build a record number of cars, as the Financial Times reports:

"If you look at the current demand . . . in the auto industry where we have an excellent transparency to cars manufactured, the current orders look more like 110m to 120m cars [per year]," chief executive Reinhard Ploss told the Financial Times.

The previous record was reached in 2018, when 95m cars and vans were delivered to customers, according to Moody's.

[...]

The current shortage of crucial components, which has led to plants being shut around the world, could lead overall car production to slump to 77m in 2021, according to AlixPartners, almost 8m fewer units than it forecast before the bottlenecks took hold.

But Ploss said ordering patterns suggested carmakers might be looking to make up for lost production time in the coming months.

"There are many bits and pieces from which we can read the total market," he said, singling out components such as microcontrollers, which are made for specific models and easy to track. 

Would anyone be surprised if we're all writing stories about how the car industry has too many semiconductor chips in 2022 or 2023?

Speaking of the great efficiencies of global capitalism, lithium miners are afraid they can't haul enough lithium out of the ground to meet our (fairly well anticipated) demand for EVs. Bloomberg explains that prices have more than doubled over the past year, but that's only after a serious slump:

"The financing for lithium projects is still too little, too late," said Cameron Perks, a minerals analyst at BMI in Melbourne, Australia. "The market deficit is already occurring."

A lengthy slump since 2018's peak meant investment in the sector slowed, while the pandemic has exacerbated supply constraints. On the demand side, the green energy transition has accelerated the adoption of EVs and global lithium consumption is estimated to grow five-fold by the end of this decade, according to BloombergNEF.

"As prices increase now, there will be unknown yet-to-be-announced projects and expansions that will help to increase supply to meet demand. That is almost a certainty. What is not certain is just how many unknown projects there are out there," Perks added. "There's also a possibility that not enough lithium can be mined, then it could risk a slower EV roll-out."

I don't think anyone has been really caught off-guard by the rise of EVs, so I don't know what's happened here.

This is not a car story, but it reads like one. States are trying to get the Feds to actually enforce global emissions standards on planes operating in the U.S.A. and encountering more than a little resistance. From Reuters:

The EPA should move ahead of the U.N.'s aviation agency in approving standards to curb greenhouse gases and air pollution from new aircraft engines entering into service after 2030, said the letter from Illinois, Massachusetts, Oregon, California and Minnesota and International Council on Clean Transportation (ICCT).

The latest U.S. policy "favors aspirational goals and (sustainable aviation fuel) tax credits over legally binding GHG targets," the letter said. Last month, the White House announced it was aiming for 20% lower aviation emissions by 2030.

"Aspirational goals" and tax credits is all we do these days. It's the exact same story with our non-binding EV "mandates." Why do the Democrats go through all the trouble of getting elected if they're not going to do anything while in office?

Do you just run videos of it tug-of-war outpulling everything else on sale? Do you just donate your entire ad budget to Greenpeace? What's the move?