Ford Doesn't Want To Rule Out A Fiesta EV, But It Also Can't Make One Right Now

Good morning! It’s Wednesday, July 12, 2023 and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

Volkswagen’s CEO Is Stepping Down

1st Gear: Fiesta, Forever

Ford left the sedan and hatchback game — basically everything that isn’t an SUV or the Mustang — in the U.S. some years ago. But with the death of the Fiesta and Focus in Europe, the same scenario is unfolding on the other side of the pond. However, Ford is open to the possibility of this merely being a pause for the Fiesta, if it can get a little assistance from its partner Volkswagen. From Automotive News:

The automaker’s Fiesta factory in Cologne, Germany, has had a $2 billion revamp to build electric cars based on VW Group’s MEB architecture. The first of Ford’s VW-based EVs, a compact crossover called the Explorer, will arrive in European dealerships early next year.When asked whether Ford would take a version of the VW’s MEB based small electric car, [Ford Europe Passenger Car General Manager Martin] Sander said the automaker has “a very constructive and positive cooperation with Volkswagen and we are possibly exploring opportunities to take that to the next level.”“Nothing has been decided, but I don’t want to rule that out,” he said in an interview with Automotive News Europe.VW brand in March unveiled the ID2all concept for an affordable small battery-electric car that the automaker aims to sell for less than 25,000 euros. […]“Smaller vehicles are smaller margin. We do not have the scale of the Volkswagen Group or Stellantis in Europe,” Sander said. “Small vehicles like Fiesta are not the heartland of Ford Motor Company.”

Even if Sander’s only talking about Europe specifically, it’s a little alarming to read someone from Ford — a company that sold the third-most cars in the U.S. behind only General Motors and Toyota last year — say it doesn’t have the muscle of the global market’s other major players. What’s more, “small vehicles like the Fiesta” very much have been the heartland of the Ford Motor Company…over there. That might not be the case anymore, but as a Fiesta ST owner I simply will have none of this small Ford erasure. Those rally cars didn’t come from nowhere.

Still, margins are tight for small cars, whether you’re talking internal-combustion or electric. It makes sense that Ford Europe wants to prioritize putting its future technologies — and those of its current partners — toward higher-margin vehicles with a wider consumer reach. Sander continued:

“Our first priority is to get our own platform and our own technology to Europe, because I really believe we are building a very, very competitive platform,” Sander said.

With its own models built in Spain, Ford will balance the needs of European buyers with cost effectiveness.

“It’s easy to spin off a derivative with very limited investment in order to make it a little more suitable for a certain part of the world. That is clearly part of our plan,” Sander said. “But we will not create a [passenger] vehicle only for Europe.”

For now, anyway. Wait for EVs to become cheaper to make. As Volkswagen itself recently reminded us, there’s always value in a familiar name. It just takes some time to realize it.

2nd Gear: Mercedes Up

The second quarter of 2023 was kind to Mercedes-Benz, which saw a six percent year-over-year rise in overall sales globally. Per Reuters:

Mercedes-Benz Group sales in the second quarter rose 6% year-on-year – a total of 515,700 vehicles – on the back of demand for all-electric and top-end vehicles, the German carmaker said on Tuesday.

Sales grew in all the carmaker’s main regions – Europe, Asia and North America – with deliveries in Germany up 23%, while China was up by 12% and the United States by 6%.

In the rest of the world, second-quarter sales fell 12% to 20,700 vehicles.

Electric vehicles conitnued to be the main growth driver in the quarter, with passenger cars sales growing 123%, to reach 56,300 units.

The top-end segment – which includes models such as AMG, Maybach and G-class – also posted solid growth of 12% for the period.

The brand’s normcore EVs are reaching people, slowly but surely.

3rd Gear: Audi Wants To Buy SAIC’s Tech

In China, Audi — like its parent Volkswagen — works with with state-owned SAIC for manufacturing and sales. SAIC appears to have good technology as far as the German brand is concerned, and Audi’s reportedly looking to buy it from its partner, because the company’s current MEB-based EVs haven’t exactly set the market on fire. From Reuters:

Germany’s Audi is in talks with SAIC Motor Corp to buy an electric vehicle platform from the Chinese state-owned automaker, two people familiar with the matter said, an unprecedented effort to shore up market share.

The move, coming as sales of Audi’s EV products fall sharply behind those of Tesla and domestic competitors such as Nio, spotlights the pressure on all legacy and Western brands in the world’s largest auto market, as they battle over EVs.

The premium car brand of Volkswagen AG seeks to take over the EV platform owned by SAIC’s EV unit, IM Motors, said the sources, who sought anonymity as the matter is private. Talks are at an advanced stage, one of them added.

IM Motors, which started delivery of its first model, the L7 sedan, in June 2022, is a premium EV brand controlled by SAIC and its investors include e-commerce giant Alibaba Group.

Audi declined to comment on whether the talks were taking place. SAIC declined to comment.

It’s unclear what Audi’s plan would be with SAIC’s platform if it was able to purchase it. Would the resulting EVs be sold only in China, or supplement the brand’s forthcoming Premium Platform Electric offerings in the U.S.? Only time will tell, but the extended VW family appears to be in a bit of a panic over the tech it’s spent the last decade developing. At this point, the quickest way to make up for that is probably indeed just to throw a ton of cash around and buy a solution.

4th Gear: Not Everyone Loves Tesla’s Price Cuts

Bloomberg published an interesting little read today about a startup looking to offer EV subscriptions and medium-to-long-term loans that was almost killed by Tesla’s price cuts and rampant volume acceleration. The company is called Autonomy and its owner, a “friend and occasional confidant” of Elon Musk’s named Scott Painter:

There was just one problem: Months into Painter trying to get Autonomy off the ground, Elon Musk — Painter’s friend and occasional confidant — started slashing the prices of Tesla’s EVs.

“Instead of having an $85 million fleet, we suddenly had a, say, $56 million to $57 million fleet in one day,” Painter said in an exclusive interview.

The combination of Musk’s price cuts and Tesla’s accumulation of more inventory than it’s ever had before — meaning it’s easier than ever to quickly get a Tesla — pushed Painter’s startup to the brink.

“We were very vulnerable to our lenders in that moment,” Painter said. Autonomy ultimately went through a forbearance process while he worked to recapitalize the company with a new $12 million round of funding. He also had to pare back operating costs, which included shrinking Autonomy’s staff to just 45 employees, from around 120.

Suffice it to say this brush with depreciation risk has left Autonomy well short of the goal Painter announced in August of last year to order 23,000 EVs from 17 different automakers. It’s at around 1,300 cars, and the CEO believes the service will require about 3,000 to break even.

That said all hope isn’t lost for the firm, because interest rates are still high and car buying still sucks. Thank goodness for plucky startups looking to make car ownership more accessible to everyone by taking away the ownership part.

Reverse: Dymaxion!

On this day in 1933, 90 years ago…

Neutral: Focus Now

I’m obviously biased, but if you could get Ford to bring back one car — talking actual cars here, trucks and SUVs can take a walk — what would it be?