OEMs

Ford’s opens the betting with a pretty substantial wager – It’s called the Mustang Mach E. (www.insideevs.com)

A few quick observations. First, naming the EV after Mustang, arguably their best HALO car line unless you’re a truck guy / gal, Ford’s had to have known it would be controversial and would upset MANY ‘car guys’ who think a Mustang is ‘THIS’ and ONLY this. I’ve had numerous convo’s this week regarding whether that was a good or bad move and my take is that Ford’s is looking at this purely as helping ‘lay the foundation’ of the new Ford’s, it shouldn’t negatively impact the Mustang brand in the long term, and will bring a broader audience into the fold since it’s already a well-established, trusted marque and the market for a 2-door sports car isn’t HUGE.

Second, in order for the naming to work, the new product that reps that names needs to BRING IT. Now, it was JUST launched so we don’t know whether it lives up to the Mustang pony just yet but initial readouts from media reports seem to give it a ‘We like what we see so far’ vibe so let’s see if the production version can keep that promise of ‘bringing it’ when it’s launched later next year.

There’s even a backstory about the Mach E, which are always the most interesting part of the product development (PD) process – the why’s and the why not’s of design decisions – that took the PD team from more conservative, built for the mass market EV, to the version they just launched that’s a bit edgier and technologically forward but firmly places Ford’s into the mix when it comes to EVs.

Next, I totally commend Ford’s for taking this HUGE step, accepting and embracing this risk and going for it! If you’ve followed my newsletter AT ALL, you know that I am NOT an advocate of waiting around like sitting ducks as newbies or even incumbents to pick you off, even if you’re collecting gobs of cash selling ICEs.

I still have quite a few ex-colleagues and friends at Ford’s, here in China and in Dearborn so it’s good to see some of this well-deserved (and positive) attention that’s been shined on them this week for that Mach E launch. The Mach E isn’t coming until late 2020 for the US and 2021 in China and there’s still a lot to get done if Ford’s is to be considered a major player in the future, including a big mess that’s trying to get cleaned up in China, and mobility initiatives that will NOT bear fruit in the immediate timeframe.

If Ford’s doesn’t clear the path to profitability in China, that will handicap them from achieving their goals in the rest of the world so those that are rooting for Ford’s to succeed, play careful attention of how the China turnaround is going in 2020.

Finally, last observation is that many people thought that Ford’s missed an opportunity to pay homage to its Model T by not naming the Mach E, the Model E. You could be very right about this since Ford’s does have the rights to Model E, but I am sure that they have a vehicle planned in the next few years that’s going to be worthy of that moniker so we will have to just wait and see. BBTW, the 's on Ford was not a mistake. 

#MustangMachE #EV #NewFord #WhynameitMustang

Further commits from VW to growth E-Mobility in China. (www.cnbc.com)

VW, along with its China partners SAIC & FAW, announced this past week that it’s committing $4.4B USD to invest in the China automotive market for 2020. Over 40% of that amount will be dedicated to promote e-mobility, a bit of a nebulous term, since that could mean services and/or products.

That commitment includes upgrading their Shanghai and Foshun plants to be able to manufacture 600K units annually which will likely take up the bulk of that investment amount. As I determine what other ‘e-mobility’ investments are made, will update accordingly.

#VW #SAIC #FAW #Bigcommitment #emobility #China #ALLIN

AV/EVSTARTUPS

WM going with a capital B, as in $1 Billion, for series D funding.

After having just recently closed their series C round (~$450M USD) earlier this year in March, WM Motor has its sights on more than doubling the $400M XPeng announced they raised last week, to a $1B series D round which WM is targeting to close before summer of 2020. Ambitious timing indeed but as the EVStartups begin to wither away burning through Brinks trucks worth of cash and still unable to actually bring any vehicles to market, we should begin to see the genuine article separate themselves, which I think WM is, from the poseurs.

One big thing that separates WM from many of their competitors including NIO & XPeng is that they build their own cars in their own, soon to be factory(s). This means their fundraising needs are substantial and their balance sheet should look more like Tesla’s than NIO or XPeng’s, guys that ‘design & test’ vehicles and outsource the heavy lifting (read: manufacturing) to others.

Their challenge is going to be to fill those factories with orders, ideally so they can get those plants consistently running at over 80-85% capacity utilization. That should allow them to put some money in the bank while still having a healthy amount of working capital to manage the day to day. With the launch of their EX6 SUV this week, which should be a boost to their monthly sales numbers, they’re hoping to do just that.

Don’t let the quiet, more workmanlike demeanor of Freeman Shen fool you, these guys have some serious ambition and investing in two manufacturing facilities should make that pretty obvious. Their ambitions are global as well so that cash could go a long way to allowing them to enter an international market like the US or the EU. Before we get ahead of ourselves though they’re going to have to prove themselves in their home market.

My WAG is that they’d need to get to 150K minimum unit sales / annum combineda at both plants for them to be break even. That means IMHO they’re going to have to spend a decent % of the capital they’ve raised to really ‘raise’ the WM profile, increase awareness of the brand, while also creating excitement about their products, that’s going to take time, a very clear message of who they are and why customers should want their product and a capable team marketing team that’s carefully growing that awareness. With the recent announcements from VW & Ford’s, they should ALSO know how challenging it will be for them to do that.

#WMMotor #fundraising #billionwithaB #globalambitions

MOBILITY

Canoo aiming to be the first? (www.electrek.co)

Love what Canoo is trying to do, but it’ll be a challenge to really determine how many vehicles need to be in the fleet, at what minimum capacity they'd need to be used, and ultimately what’s the right monthly service fee to charge at that utilization rate in order to make money?

The writer of this article commends the Canoo management team for its boldness but let’s be clear here, these guys weren’t able to make their old companies profitable either, and the attitude about companies blitzscaling in order to grow has now shifted mightily to a ‘we want to see some moneymaking’ before we open our checkbooks.

You can tell from the comments quoted in the article that the management got that memo and have really massaged their messaging to emphasize their goal of being profitable. With that said, the assessment of the current market and the opportunity I agree with. Whether Canoo can crack that code remains to be seen but I’m thinking that subscription fee is going to need to be a lot farther north of $500/month if the company plans on being profitable.

#Canoo #subscriptionservice #comingtoamarketnearyou #willtheybreakthrough