Only Losing Half As Much!

  • October 8, 2023

How much money is it possible to lose “selling” electric vehicles? Ford and Rivian are trying hard to find out.

Ford expects to lose more than $4.5 billion on EVs, according to the most recent projections of company CEO Jim Farley. Such losses are incurred by “selling” EVs like the F-150 Lightning electric truck, which Ford reportedly costs Ford $60,000 per “sale.”

Rivian, which also makes an electric truck and an electric SUV (they’re both the same battery-powered devices; built on a common underlying skate with different shaped bodies placed on top) is doing much “better.”

It is only losing a reported $33,000 per “sale.”

Put another way, according to a story in the Wall Street Journal, Rivian “hopes to slash production costs  by as much as $40,000 to claw back the losses it makes on each vehicle.”

Italics added.

The losses it makes.

This is how things “work” in a fascist economy.

People draw back when they hear the latter italicized word, having been taught – having been misdirected – to equate “fascist” with “right wing” (even more misdirection, as “right wing” and “left wing” are the same thing, which is authoritarian collectivism with different symbols) and more specifically, goose-stepping. But the goose-stepping is not required; it is an affectation of one variety of fascism. What all forms of fascism have in common is  that government allows the formality of  private property but tells everyone how they may (and may not) use what they are allowed to pretend is “their” property. Corporations become inseparable from government – and vice versa. They amount to the same thing.

We all experienced the ne plus ultra of the fascist model during the (cough) “pandemic.” Ostensibly private businesses were allowed to remain open – or not – depending on the arbitrary yes or no of the government, which then dictated who could (and could not) enter those ostensibly private businesses, irrespective of the wishes of the business owners and those who wished to patronize the businesses.

Drug corporations – the rightly styled Big Pharma – used the government to force practically everyone to buy their drugs and take them, too. The drug corporations do their own “studies” of the “safety and effectiveness” of the drugs they then push on people, using the government to do that.

And that is textbook fascism.

Prior examples – that set the precedent – including the partnering of what has become the insurance mafia and the government (the original legalized mafia). Once again, private corporations leveraging the strong-arming power of the government to make money by forcing people to hand it over.

But fascism breeds its own demise – and we’re seeing that roll out of assembly lines right now.

In a free-market economy, Ford would have stopped losing money on the Lightning and other EVs long before now. It would have done the math – as the saying goes – and recognized there is no market for models like the Lightning, except for perhaps a very small handful of them priced to reflect what they actually cost and sold at a price that results in a profit for Ford.

Rivian would never have “sold” a single battery-powered device because it would have had no capital to malinvest in such a project.

Rivian – unlike Ford – does not make anything that sells – except the faith of investors that government forcing people to buy EVs by leaving no alternative to EVs will result in a “market” for EVs. This is how Tesla makes money selling EVs. More accurately, it is how Tesla made itself into the model for selling EVs. It got in early and cashed in on the artificially created “market” for EVs engendered by government mandates and subsidies, including the greasy wealth-transfer scheme styled “carbon credits,” which Tesla used to extort money from car manufacturers that were making market-driven rather than government-mandated cars.

But it made most of its money via people buying stock in Tesla, which those who bought safely assumed would make them money because of government mandates forcing the manufacture of more and more EVs. It’s not rocket science. If you know that the government is going to favor a given industry or business – if you know the government is going to create a “market” for whatever the product or service is – then you know it’s not much of a risk to “invest” in that.

Until the money runs out, of course.

That is happening right now – to Ford. And Rivian. And to every other company that decided not only to go along to get along but two-hand-gulped the EV Kool Aid, convinced they were going to be the next Tesla. The problem being Tesla has already saturated most of the market for these hugely expensive battery-powered devices. If Ford – and Rivian – had to price their devices so as to reflect what they actually cost to make, with a profit margin on top of that, there would be no market for these devices.

In the case of Rivian, it would be necessary to price each one in the vicinity of $120,000 (that’s the sum of the $80,000-ish current transaction price plus the $33,000 that Rivian is not currently charging to cover its losses). And Ford would need to price the Lightning similarly. There is a market for $120,000-plus vehicles. But it is a very small one. Fewer than 2 percent of all new vehicles sold sell for that kind of money – because 98 percent of buyers haven’t got that kind of money.

In a fascist economy, such things don’t matter – for awhile – because the government can create the appearance of a market, by creating one and then using the power of government to prop it up.

For awhile.

But not forever.

. . .

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