TIME: THE CRUELEST ENEMY.

By Peter M. DeLorenzo

Detroit. Another week, another wave of churning and burning in this “thing” they call the Auto Biz. The manufacturers that are able to straddle both sides of the ICE/BEV fence are looking good – for now – but there are no guarantees about any of it. Even the manufacturers that seem primed for success with their product portfolio ratio of ICE to upcoming BEVs are at the mercy of the whims and prevailing winds in this business, and right now, those winds are blowing ill will in the form of massive silicon chip shortages that threaten to devastate any shred of product momentum able to be gained. 

How bad is it? The chip shortage is not only real, the effects are starting to push the shards of sun peeking through the black clouds back into the gathering darkness. The automobile companies are finding it difficult to maintain anything approaching a product cadence, and the shortage of cars, SUVs and trucks on dealership lots is starting to wear thin on everyone. It’s more than a little problem too. Dealers across the country are begging for product, and there’s not a damn thing anyone can do about alleviating the shortage. That is, until more chips are manufactured.

One positive byproduct of this crisis? The transaction prices are going through the roof as dealers are selling the cars and trucks that they do have for sticker, or even above. But that’s little solace for these dealers as they see their lots get emptier by the day. In ancient times, pundits would have said that it’s no way to run a railroad. Now? In these less elegant times let’s just say it’s a burgeoning Shit Show of gigantic proportions.

But there’s more this week. There’s always more. Tesla reported record sales and income for the first quarter, including a whopping $518 million in sales of regulatory credits to competitors. That positive news for the company was clouded, however, by another fatality that occurred in a Tesla vehicle, this time, two men in Spring, Texas, were killed. Though the investigation is ongoing, that Tesla has promoted its “Autopilot” function for years with impunity, complete with misleading comments from its leader, who repeatedly boasted about the efficacy of its advanced technology while Tesla customers were enlisted in the actual beta testing of its system, was simply a blatant disregard for the safety of its customers and of the general public. Suffice to say, if a mainstream auto manufacturer had attempted to do that, the hearings in Washington – and the public vilification – would still be going on. 

The fact that Tesla has gotten a free pass over this situation is beyond unconscionable. And even though the company’s lawyers are now taking great pains to insist that it clearly states and has always stated in the owner’s manual that the driver needs to have his or her hands on the wheel to safely operate the autopilot system, the damage was done long ago. 

And as if to add icing on an already dreadful, festering cake, Consumer Reports demonstrated just last week how Tesla’s autopilot system could be “tricked” into operating without a driver behind the wheel. This is a Muskian Nightmare and a giant bowl of Not Good. And the fact that Tesla’s autopilot system was constantly and irresponsibly overhyped for years and has taken its toll on property and most important, the loss of people’s lives, it will be this company’s permanent and deservedly reprehensible legacy. 

Then there’s Ford. Now that we have survived the hype of the Bronco “Sport” for all of these months and watched as Ford marketers and advertisers exploited every avenue available to them to relentlessly hammer the point home that the Bronco “Sport” was, in fact, a real Bronco, the real Bronco is actually due to arrive in a couple of months. At least that’s the current timeline, but you can attach to that a large asterisk, because with Ford product intros it has been well-established that timing is always suspect. 

But after having been inundated with marketing for the faux Bronco “Sport,” it will be interesting to see how Ford marketers will differentiate the “real” Bronco from everything that has been dumped on the consumer public’s heads over the last four months. Will the Bronco Sport become “Tastes Great, Less Filling” and the real Bronco be presented as “A Full Bodied, Meatier Dark Roast”? Can Ford marketers avoid burying the Bronco Sport while touting the “ultimate” Bronco? A giant “we’ll see,” as we like to say.

Yet still, that’s not all for Ford this week. As much as the marketing for the Bronco Sport was a withering display of not leaving any imaginable marketing stone unturned, the hype for the Mach-E crossover has eclipsed even that. The parade of journalists – both real and imagined – who have dutifully reported that Ford’s crossover BEV is the greatest thing since sliced bread has been a wonder to behold. It’s as if most of them had never driven an EV before and that it was incomprehensible that anything could surpass it. But while high-fiving is going on in the halls in Dearborn, the relentless hype for its new BEV crossover has exposed a gaping hole in its planning that could easily wreak havoc on its future. 

This looming crisis for Ford – yes, yet another one (does it seem like Ford has careened from crisis to crisis throughout its history? Why yes, yes it has) – goes well beyond the current chip shortage fiasco. 

It seems that Ford decided a while ago that trusting its battery production supply to a network of suppliers would be its best bet for success in the BEV game. This decision was actually a departure for Ford, as the company is famous for doing things in-house because it truly believes that whatever it is it can do it better, faster and cheaper (even though it has been proven repeatedly that when the company gets involved things take twice as long, cost twice as much and are rarely, if ever, better).

But Ford quickly found out that the battery game is a different animal altogether. Relying on a network of suppliers for off-the-shelf advanced technology left the company ill-equipped and decidedly lacking in the battery development/technical knowledge aspect of the business. Huge mistake. Quite simply, the company has been left exposed and unprepared, and it has squandered its ability to be a leader in a space that desperately calls for in-house developed, proprietary technical leadership.  

Despite the train having already left the proverbial station, Ford is now desperately trying to play catchup, just thinking about getting its cars on the tracks while the rest of the industry is fading off in the distance and disappearing around the bend. Just this week Ford announced that it is spending $185 million on what it calls “Ford Ion Park” – a research and development lab that will focus on battery development – with the goal of eventually manufacturing its own cells. The problem is that it isn’t scheduled to open until “the end” of 2022, and remember, it’s an R&D facility. 

But that’s not all. Other manufacturers have advanced battery development programs and production facilities that are well down the road to completion. GM, for instance, has just announced a second battery build facility (with its partner LG Energy Solution) for its Ultium Cells that’s in the works for its Spring Hill, Tennessee, manufacturing complex and due to be online at the end of 2023. This is in addition to its facility well underway in Lordstown, Ohio, due to be completed in 2022.

What does this all mean for Ford? The clock is ticking yet again. It means that the company is demonstrably behind in the EV battery game. In fact, it doesn’t even have the first oar in the water. That this is a new dimension of Not Good for Ford is the inescapable conclusion. The company better hope that it can keep selling enough faux Broncos, real Broncos, Mach-Es and F-150s to keep the lights on until it can start generating its own electricity. For Ford, time will be the cruelest enemy from here on out. 

As W. H. Auden once said:

… But all the clocks in the city
   Began to whirr and chime:
'O let not Time deceive you,
   You cannot conquer Time.

'In the burrows of the Nightmare
   Where Justice naked is,
Time watches from the shadow
   And coughs when you would kiss.

'In headaches and in worry
   Vaguely life leaks away,
And Time will have his fancy
   To-morrow or to-day.

'Into many a green valley
   Drifts the appalling snow;
Time breaks the threaded dances
   And the diver's brilliant bow.

'O plunge your hands in water,
   Plunge them in up to the wrist;
Stare, stare in the basin
   And wonder what you've missed.

'The glacier knocks in the cupboard,
   The desert sighs in the bed,
And the crack in the tea-cup opens
   A lane to the land of the dead…

And that’s the High-Electron Truth for this week.