Is a Bigger Hybrid crunch coming? -- warning signs do exist.

[YazYaz]

I'm thinking that Ford shutting off 2023 orders so quickly indicates that there was an even bigger ordering issue with 2022 than we realized. I do feel bad for any 2022 order holders who didn't make it to the dealer in time for reorder a 2023.

The owners of the unfilled 2022 orders did not have to "make it to the dealer" to switch to a 2023. It was all done via email.

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[Watchman]

Ford's chosen build ratio of Hybrid 35% and EcoBoost 65% isn't about constraint on batteries or parts for its hybrid powertrains. It's about a choice they made for their production mix that offers up the best profit margin business plan at the end of the build year. This is most likely in part because the additional profit margin for the EcoBoost balances out what may be a low or negative margin for Hybrid. This is typical in the industry.

They are adding the hybrid powertrain to the Bronco Sport for the 24 model year, and PHEV will be rolling out for both likely by 2026 if not earlier. (Im hoping PHEV for Maverick in 24 in its first refresh) They have ability and capacity to build all they need.

I guess we are all entitled to our opinions, but theories like this should at the least have a source to try and understand where they came from. I think we all have read about Maverick Hybrids being a constraint since day one. Ford's initial ratio was a 40% - 60% Hybrid to EcoBoost prediction but soon found that the orders in the first run showed 67% - 33% Hybrid to EcoBoost. Constraints were always in play along the way until Ford ended 2022 production. We saw a short-time bump of 50%-50% somewhere in the middle of the 2022 production but the ratio tailed off strongly in favor of the EcoBoost near the end. To say, "it isn't about constraints" and that Ford "has the ability and capacity to build all they need" is just ignorant. If there is any article to support this theory, I sure couldn't find anything to support it. And could there be a theory that vilifies Ford more than they have already vilified themselves.

Moving on to the second round of orders we're seeing an 80% - 20% ratio for Hybrid to EcoBoost. Using a projected 100,000 for a 2023 production number we are to believe, using this unsupported theory, that Ford believes they can make more profit on 20,000 EcoBoost models than they would making 80,000 Hybrid models? The fact is the Hybrid Maverick is a constraint because the parts to make them are a constraint. Ford already has adjusted pricing to compensate for the increases in costs to build Hybrids and I provide just one article to support the research for my post. As mentioned, there are other respected names in the EV industry who also discuss the EV battery supply problems. I could have provided articles from the king of EV, Elon Musk, but went with the Rivian CEO because In April 2019, Ford invested $500 million in Rivian as part of an agreement to develop a battery EV for Ford. That deal was canceled due to the coronavirus pandemic, but I felt that article was more relevant.

 

[Dadmezz]

Just for fun because I wanted to dive a little deeper, and FWIW these are my best guess at average MPG.

Looking at Ford's AVG MPG as a whole based on "trucks" produced YTD. Approx. 17 MPG without the Maverick, sprinkle in the Maverick and that number goes just above 18 MPG. So the Maverick is certainly boosting Ford's average in their truck lineup, but they're going to need to produce quite a few more to really bring that number up.

To see how effective this really is, what are the numbers Ford is required to meet? I.e. 20 mpg?

 

[Shay]

I guess we are all entitled to our opinions, but theories like this ...............

We do not know what the ratios are of what actual orders are relative to mix. Ford generally does not produce data on that. So all of your percentages quoted and amounts of "orders we're seeing" are based on hearsay from a few people here and there who are only sharing their own anecdotal data such as a dealership manager talking of their own orders. Anecdotal data from forum members here does also not constitute what is really happening nationwide in the marketplace - it's a small sliver of information relative to the whole.

Is it all incorrect? Not necessarily but it certainly is not big picture fact.

Ford does not share this data, thus everything talked of in this forum space and in the media is either hearsay or anecdotal. The only information Ford shares is their intended mix, their production numbers and their actual sales numbers. On a few occasions they have shared a production mix of hybrid vs. EcoBoost but they do not as a regular practice.

As to capacity, Ford builds their own hybrid battery packs in Rawsonville, MI. They build their own hybrid motors and transmissions in Sterling Heights, MI. Of any manufacturer they have the most control over their supply of components as they are not entirely dependent on outside suppliers for these things.

Having covered the auto industry for decades most of what I share in terms of opinion and theories is based on my experience and base knowledge of how the business works. They are based on my intimacy over the decades with the people who run these programs - many conversations, collaborations and watching the outcomes prove out initial conceptions over time. In this case it's also based in my heightened familiarity with Ford Motor Company for a variety of reasons.

Am I 100% correct? Unlikely. Am I pretty spot on? We'll see.

 

[MichaelG]

We do not know what the ratios are of what actual orders are relative to mix. Ford generally does not produce data on that. So all of your percentages quoted and amounts of "orders we're seeing" are based on hearsay from a few people here and there who are only sharing their own anecdotal data such as a dealership manager talking of their own orders. Anecdotal data from forum members here does also not constitute what is really happening nationwide in the marketplace - it's a small sliver of information relative to the whole.

Is it all incorrect? Not necessarily but it certainly is not big picture fact.

Ford does not share this data, thus everything talked of in this forum space and in the media is either hearsay or anecdotal. The only information Ford shares is their intended mix, their production numbers and their actual sales numbers. On a few occasions they have shared a production mix of hybrid vs. EcoBoost but they do not as a regular practice.

As to capacity, Ford builds their own hybrid battery packs in Rawsonville, MI. They build their own hybrid motors and transmissions in Sterling Heights, MI. Of any manufacturer they have the most control over their supply of components as they are not entirely dependent on outside suppliers for these things.

Having covered the auto industry for decades most of what I share in terms of opinion and theories is based on my experience and base knowledge of how the business works. They are based on my intimacy over the decades with the people who run these programs - many conversations, collaborations and watching the outcomes prove out initial conceptions over time. In this case it's also based in my heightened familiarity with Ford Motor Company for a variety of reasons.

Am I 100% correct? Unlikely. Am I pretty spot on? We'll see.

The 2.5L is built in Chihuahua, Mexico.

PDF Link

 

[Shay]

The 2.5L is built in Chihuahua, Mexico.

PDF Link

Was referring to the electric motors.

 

[LSchicago]

I'm thinking that Ford shutting off 2023 orders so quickly indicates that there was an even bigger ordering issue with 2022 than we realized. I do feel bad for any 2022 order holders who didn't make it to the dealer in time for reorder a 2023.

I do believe they shut it down before constraints were hit. Remember they said there would be no 23-24 order rollovers. They will probably limit the remaining orders for EB only dealer stock orders, so they have some inventory to sell.

 

[DavesMav]

To see how effective this really is, what are the numbers Ford is required to meet? I.e. 20 mpg?

I honestly haven't a clue.

 

[MichaelG]

Was referring to the electric motors.

Ahh, gotcha. I didn't know that Sterling Heights made the electric powertrain.

 

[atomguy245]

I do believe they shut it down before constraints were hit. Remember they said there would be no 23-24 order rollovers. They will probably limit the remaining orders for EB only dealer stock orders, so they have some inventory to sell.

I'd say they shut it down because of the constraints. Ford was clear in advance for 2023 what the constraints would be. They saw how the orders were coming in and stopped it before they got too far out of hand.

 

[Shay]

Ahh, gotcha. I didn't know that Sterling Heights made the electric powertrain.

Van Dyke Powertrain Center

 

[MichaelG]

Van Dyke Powertrain Center

I live close to this plant and didn't know that they made the powertrain. Pretty neat that they make the electric power train and the battery here in SE Michigan. It's a long trip for these parts to ultimately end up in my driveway.

I found this interesting article detailing the production of the motor. Link

 

[PriusHater]

This is most likely in part because the additional profit margin for the EcoBoost balances out what may be a low or negative margin for Hybrid. This is typical in the industry.

With Ecoboost no longer having a markup over Hybrids for MY2023, the profit margin has shifted a bit I would think.

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