Hybrid Constraint?

[Edrobyn]

Does anyone know what specifically is the constraint is on the Hybrids? If it’s the battery then I don’t understand how Tesla can build over a million fully electric vehicles and Ford has issues with a few thousand with a much smaller battery.

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[Clarkdonbran]

I think the profit margin is the constraint.

 

[commadorebob]

Does anyone know what specifically is the constraint is on the Hybrids? If it’s the battery then I don’t understand how Tesla can build over a million fully electric vehicles and Ford has issues with a few thousand with a much smaller battery.

If I sell battery parts, I'm going to be more inclined to sell to a larger purchaser rather than a smaller one. Tesla going all in on EV may be exactly why they get all the batteries during the lithium shortage.

But for the first two years of the Maverick, I think it simply comes down to Ford's expectations. No other model hybrid has been wildly successful... until now. So, even going 35% with the Maverick was ambitious. By the time they realized it, it was too late to adjust the supply trains.

I personally think the third shift in July is because Ford has been working to do just that.

I think the profit margin is the constraint.

Profit margin of no sale is $0. Ford would build every hybrid ordered if they could.

 

[gator_dub]

I agree with the profit margin comment but I think there's probably just an inability for US manufacturers to ramp up production.
If you look around the automotive landscape Tesla, Toyota, Hyundai, Kia.. all are not having an issue pumping out vehicles including EVs a Hybrids.
My local Hyundai dealers are absolutely loaded with Santa Cruz's sitting on the lots yet my EB Maverick has yet to be scheduled.....

 

[Clarkdonbran]

If I sell battery parts, I'm going to be more inclined to sell to a larger purchaser rather than a smaller one. Tesla going all in on EV may be exactly why they get all the batteries during the lithium shortage.

But for the first two years of the Maverick, I think it simple comes down to Ford's expectations. No other model hybrid has been wildly successful... until now. So, even going 35% with the Maverick was ambitious. By the time they realized it, it was too late to adjust the supply trains.

I personally think the third shift in July is because Ford has been working to do just that.



Profit margin of no sale is $0. Ford would build every hybrid ordered if they could.

Definitely. They put their limited production toward higher profit vehicles.

 

[realshelby]

Components to build vehicles are figured months in advance. Projections for availability go into that and OEM's figure volume for models based on best information available. If a supplier falters, or is already at near 100% production, you cannot just get more to fill YOUR orders. Ford has some successful Hybrid models that they want to keep pushing. The components were figured into these models before the Maverick was even around. That the Maverick has outsold projections by a huge margin is both good and bad. I don't doubt Ford is trying to improve Hybrid parts volumes so they can build more, and I think/hope the 3rd shift added to the Maverick line is an indication they HAVE improved commodity availability for both Hybrid and Eco's. That Ford is now into the second year of production and STILL smothered with Hybrid orders they don't have capacity for is unusual. If you were Ford...how would you best tell 20,000 customers their Maverick won't get built? Would that be better....or would the damned allotment and Dealer order screwups be even worse in the long run?

 

[Deleted member 5597]

Definitely. They put their limited production toward higher profit vehicles.

If that statement is true, then why hasn’t Ford built my hybrid Lariat w/lux, both CP’s, and BAP. MSRP is $36,600. That is considered a higher profit vehicle at that price, isn’t it?

 

[Redneck Garage]

I think the profit margin is the constraint.

100% - also the reason the XL is a constraint but you can order an XLT or Lariat and have a better shot at getting built - while you can say "supply chain" "covid" "excess demand" this is mostly bean counting by the accountants at Ford.

 

[710-oil-614]

The constraint is Ford.

Ford only plans to build the number of hybrids that they currently are building. If Ford wanted to, they would build more.

 

[Clarkdonbran]

If that statement is true, then why hasn’t Ford built my hybrid Lariat w/lux, both CP’s, and BAP. MSRP is $36,600. That is considered a higher profit vehicle at that price, isn’t it?

This one has to be personal then. What did you do to piss off Ford?!

 

[710-oil-614]

If that statement is true, then why hasn’t Ford built my hybrid Lariat w/lux, both CP’s, and BAP. MSRP is $36,600. That is considered a higher profit vehicle at that price, isn’t it?

No, not relative to their bread and butter full size trucks and SUVs.

 

[KevCuRaoi]

Components to build vehicles are figured months in advance. Projections for availability go into that and OEM's figure volume for models based on best information available. If a supplier falters, or is already at near 100% production, you cannot just get more to fill YOUR orders. Ford has some successful Hybrid models that they want to keep pushing. The components were figured into these models before the Maverick was even around. That the Maverick has outsold projections by a huge margin is both good and bad. I don't doubt Ford is trying to improve Hybrid parts volumes so they can build more, and I think/hope the 3rd shift added to the Maverick line is an indication they HAVE improved commodity availability for both Hybrid and Eco's. That Ford is now into the second year of production and STILL smothered with Hybrid orders they don't have capacity for is unusual. If you were Ford...how would you best tell 20,000 customers their Maverick won't get built? Would that be better....or would the damned allotment and Dealer order screwups be even worse in the long run?

The other thing that no one is mentioning here is that demand is greater than capacity for all Ford hybrids. Hybrid F-150s and Explorers are very difficult to get too. The % of hybrid Escapes that Ford plans to be able to build this year is smaller than last year. The % of retail 23 Escape orders is heavily hybrid.

 

[Deleted member 5597]

No, not relative to their bread and butter full size trucks and SUVs.

Those are produced at a different factory and require different parts and size engines. I just don’t find any validity in thinking Ford is not concentrating on the Maverick. It’s a valid point that there are parts constraints where the parts are made in different countries on different continents, some communist countries that had draconian shutdowns with COVID-19, plus a logistics problem with transportation in shipping from overseas, to port problems, to trucking problems. Those are contributing to the constraints, and has been well documented.

 

[jsus]

The constraint is Ford.

Ford only plans to build the number of hybrids that they currently are building. If Ford wanted to, they would build more.

AKA Corporate Strategy. That's the constraint. There it is.

They've deduced the number of compliance cars they need to sell in order to comply with CAFE et al. That's what their hybrids are, and what their EVs were before Mustang Mach-E. Even that program was initially just another boring compliance product, until corporate strategy dictated they make it more appealing. And even then, it was supposed to be low volume, sharing plant capacity with other models on the same platform.

Beyond that, they don't see the ROI in increasing FHEV production capacity, especially when they could instead expend Capex on increasing F-150 Lightning and Mustang Mach-E BEV production ~275%. Meanwhile, not a peep about increasing Maverick/Escape FHEV production, let alone building enough of the powertrain components to supply the additional models some speculate on. Looking back at historical sales data, they're right around where they were in 2013 in terms of FHEVs built/sold in US.

Similar reason base models are allocated a small % of total capacity. 15% of Mavericks are XLs, mainly so they can say they sold some (it's not vaporware), for the marketing aspect of saying it starts at a lower price than what they'd like, and to appease their high volume fleet buyer base.

They're sticking to the mix they initially allocated and have said nothing about a desire for this to change. Until they say otherwise, it's unreasonable to expect a change in the mix.

The other thing that no one is mentioning here is that demand is greater than capacity for all Ford hybrids. Hybrid F-150s and Explorers are very difficult to get too. The % of hybrid Escapes that Ford plans to be able to build this year is smaller than last year. The % of retail 23 Escape orders is heavily hybrid.

They've even raised prices on hybrids, at least Escape and Maverick. Still not doing enough to reduce demand. But that's their strategy now, increase price to decrease demand, not increase supply.

The $1,085 up-charge for Maverick EcoBoost is gone, which effectively is a $1,085 hybrid price increase. On Escape, Hybrid now costs more than the 2.0L EcoBoost (which itself costs more than the 1.5L). Escape Platinum Hybrid FWD is the same price as Platinum 2.0L EB AWD, with another $1500 for AWD on the hybrid. So AWD on both, a Hybrid is $1500 more than the most expensive ICE.

For 2022MY, Escape Hybrid was less than the 2.0L EB. That's why technically the top Titanium trim was a hybrid standard, EB optional. That and all the other trims could get the cheaper base 1.5L EB.

 

[KevCuRaoi]

AKA Corporate Strategy. That's the constraint. There it is.

They've deduced the number of compliance cars they need to sell in order to comply with CAFE et al. That's what their hybrids are, and what their EVs were before Mustang Mach-E. Even that program was initially just another boring compliance product, until corporate strategy dictated they make it more appealing. And even then, it was supposed to be low volume, sharing plant capacity with other models on the same platform.

Beyond that, they don't see the ROI in increasing FHEV production capacity, especially when they could instead expend Capex on increasing F-150 Lightning and Mustang Mach-E BEV production ~275%. Meanwhile, not a peep about increasing Maverick/Escape FHEV production, let alone building enough of the powertrain components to supply the additional models some speculate on. Looking back at historical sales data, they're right around where they were in 2013 in terms of FHEVs built/sold in US.

Similar reason base models are allocated a small % of total capacity. 15% of Mavericks are XLs, mainly so they can say they sold some (it's not vaporware), for the marketing aspect of saying it starts at a lower price than what they'd like, and to appease their high volume fleet buyer base.

They're sticking to the mix they initially allocated and have said nothing about a desire for this to change. Until they say otherwise, it's unreasonable to expect a change in the mix.



They've even raised prices on hybrids, at least Escape and Maverick. Still not doing enough to reduce demand. But that's their strategy now, increase price to decrease demand, not increase supply.

The $1,085 up-charge for Maverick EcoBoost is gone, which effectively is a $1,085 hybrid price increase. On Escape, Hybrid now costs more than the 2.0L EcoBoost (which itself costs more than the 1.5L). Escape Platinum Hybrid FWD is the same price as Platinum 2.0L EB AWD, with another $1500 for AWD on the hybrid. So AWD on both, a Hybrid is $1500 more than the most expensive ICE.

The demand for hybrid and BEV has certainly increased recently. Ford is supposed to be significantly ramping up F-150 Lightning production in the fall of 23. That is their primary focus right now.

In the case of Maverick and Escape, I think it is the hybrid transmission rather than the battery that is the primary constraint.
I am assuming that sourcing more of these (than originally forecasted/contracted) will mean a substantial increase in the cost - so much so that it wouldn't make any sense for them to try to increase the % of hybrids in the mix for the MY.

I think the future focus will be on PHEV rather than FHEV. I do hope a plug-in hybrid Maverick will be available soon....and that Ford will secure more components to build the PHEV Mavs and Escapes in the future!

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