Are the Big Three In Trouble?

In a word, yes. The big three are, of course, Ford, GM and Stellantis. They are in serious trouble in the EV market right now. Let’s look at each one.

Ford has admitted that it is losing an average of $32,000 on each EV it sells. That’s a lot of money. While the electric F150 seems to be a decent truck the fact that the Tesla Cybertruck is about to hit the market is not good for Ford. While we don’t know the final prices on the Cybertruck it will have lots of advantages over the Ford. It certainly is not going to help Ford sell more trucks. The other Ford electric, the Mustang Mach E just isn’t selling in spite of lower sales prices. Once again, Tesla is their problem — you can just get a lot more car from Tesla at a similar price.

GM has similar problems. The Bolt is due to be discontinued before the end of the year. They have canceled the entry-level Blazer and the other models cost more than a Tesla. They are now saying they will introduce a new Bolt but when? The current Bolt plant is going to be re-tooled to produce Silverados. And Hummer sales seem to be pretty close to zero.

Stellantis CEO Carlos Taveras keeps saying it costs Stellantis twice as much to produce an EV than an ICE car. Well, he says that half the time and the other half says Stellantis is “all in” on EVs. It’s hard to pin down these bipolar comments.

In the mean time, Tesla continues to make a profit on its EVs. While BYD is not in the US market they also make a profit on its EVs. How do Tesla and BYD do this? Volume for both of them and add innovation for Tesla. To put it another way, the big three continue to whine while Tesla and BYD continue to make cars.

Does this mean the big three will go away? Probably not but there are other players that seem to be a lot more serious about EVs. VW, for example, has just invested in Xpeng, a Chinese manufacturer and will likely move to using Xpeng’s EV platform. They also bought a Chinese software company because their in-house software sucked.

Another legacy manufacturer that is serious about EVs in Volvo. Volvo is owned by Geely, a Chinese company, so it may be Chinese manufacturing that is helping them but they have been introducing some decent-priced EVs and their CEO says they are serious about EVs. Another now Chinese-owned auto manufacturer, MG, seems pretty serious with the MG4 being an excellent EV.

Ford, GM and Stellantis have had the benefit of the IRA plus the fact that BYD has said it currently has no plans to enter the US market. It seems like their inertia is preventing them from taking advantage of the situation. The future is going to bring more competition for them. It’s not clear they will get their act together in time to remain being the big three.