Ford Sales -- This Sure Doesn't Feel Like A Recession Despite Poor EV Results -- Sales Soaring -- June, 2023 And 2Q23

Locator: 45915AUTOS.  

EVs update.

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EVs Forecast

These were forecast by the company back in 2022:

• 2023:
• Tesla: 1.1 million EVs
• F: 500,000 EVs -- original estimate
  
• run rate
• F-150 Lightning: 150,000 annual run rate
• on track to triple production y/y
• sold 3,600 through February, 2023
• list price: $52K to $97K
  
• Mustang Mach-E: 210,000 annual run rate

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Today's Reports

Link here.

Ford, June, 2023: link here:

But look at horrendous EV numbers for 2Q23, link here: 

Sales of Ford’s F-Series trucks jumped 34% during the second quarter compared with the prior year, including sales of an all-electric version of the F-150 that more than doubled to 4,466 units sold.

However, Ford’s EV sales during the quarter declined 2.8%, to 14,843 vehicles, as supplies of the Mach-E were short amid an overhaul of the factory that makes the EV.

Ford revamped that plant to increase production of the Mach-E during the quarter, part of a larger plan to significantly boost its electric vehicle production and turn a profit on its EV business by the end of 2026.

Ford’s electric vehicle sales remain small for now: EVs represented just 2.8% of the automaker’s total sales during the second quarter, while traditional internal combustion engines represented roughly 91% of sales. Hybrids represented 6.5% of sales.

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My Takeaways Re: Auto Manufacturers

Comments (pertain to US, only):

• transition from "legacy" ICE to EV is going to be very, very, very expensive;
• we will very likely see change in leadership positions at some legacy auto makers as shareholders become more frustrated;
• there are three major groups of auto manufacturers
• pure play EVs from the very beginning, e.g.: Tesla, Rivian, Lordstown
• legacy auto makers transitioning to EVs, e.g.: Ford, GM, Stellantis
• niche, luxury automakers, doing what they want, e.g.: Rolls-Royce, maybe Porsche in this group

Among the second group, legacy auto makers transitioning to EVs (Ford, GM, Toyota), there are three sub-groups:

• CEO not sold on EVs, yet, e.g.: Toyota
• CEO reluctantly moving forward, e.g.: GM
• CEO going all in, e.g.: Ford

The second group (Ford, GM, Toyota):

• will cover costs to ramp up EVs by inflating prices of ICE vehicles (already occurring)
• GM will lose money hand-over-fist on ramping EVs, we won't know how bad it is; GM won't report
• Ford will also lose money hand-over-fist ramping EVs, but F will break out the details

The second group (Ford, GM, Stellantis):

• will give lip service to affordable EVs
• they can't make money on "Bolt-like" EVs
• they will gravitate to luxury EV brands
• consumers will "see" entry level EVs starting at $50,000 whether or not that's accurate
• tax incentives don't matter to most car buyers
• tax incentives favor the wealthy who would buy/not buy regardless of tax incentives
  

The second group (Toyota)

• hybrids (e.g., Prius): fake EVs; will be nothing more than a small niche
• will reluctantly move to EVs, mostly to meet California mandates -- otherwise they can't operate in that state

First movers, autos: Tesla

• other than Chinese no-names, Tesla could be "last-man" standing

EV niche:

• medium-haul trucks / urban delivery vans / urban fleet  >>> long-haul trucks >>>> luxury sedans / SUVs >>>>> non-luxury SUVs EVs >>> pick-up trucks >>> muscle cars
• best niche for EV trucks and vans
• medium haul
• east coast / west coast ports to neighboring warehouses / fulfillment centers
• urban / last mile delivery
  

India:

• my enthusiasm for India and four-wheel EVs has waned

US recession / EU recession:

• will further dampen enthusiasm for EVs

Ukraine Without The Wagner Group -- July 6, 2023

Locator: 45914UKRAINE.  

Link here.

Article from link above --

One of many replies to tweet above:

Obviously someone who never studied the Vietnam War.

Usually the Scots are smarter than this.

Sure Doesn't Feel Like A Recession -- And If We Were In A Recession Would GDP Be 2% -- And Would We Be Expecting A 50-BP Jump In The "Fed Rate"? -- July 6, 2023

Locator: 45913ECON.  

We're in a mild recession (Charlie Munger).

Link here.

FDA Approves Alzheimer's Medication; Energy Sector Dividends; High Interest Rates And Oil -- July 6, 2023

Locator: 45912MED.  

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Dividends

Link here.

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High Interest Rates --> Tailwind For WTI

Link here.

EIA Weekly Petroleum Report -- Numbers Are More Than Just A Passing Interest -- KODA Resources With Four New Permits -- July 6, 2023

Locator: 45911WTI.  

EIA weekly petroleum report: link here.

• US commercial crude oil in storage decreased by an unremarkable 1.5 million bbls; and, at 452.2 million bbls, US crude oil in storage is 1% below the five-year average;
• the five years go back to 2018, so at least two full years of that five-year average include the plague years;
• take a look at gasoline demand reported today; see below;
• crude oil imports his the 7-handle which is not often seen;
• refiners are still at 90+ percent operational capacity;
• distillate fuel inventories decreased by 1.0 million bbls and now stand a whopping 16% below the five-year average; harvesting season coming up; and, then look at jet fuel demand:
• jet fuel product supplied was up 8% compared to same four-week period last year:
• all-in-all, one wonders if "something is going on"? Perhaps "analysts" at social media will help out.
  

Gasoline demand: link here.

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Back to the Bakken

Active rigs: 36.

WTI:

Four new permits, #40020 - #40023, inclusive:
Operator: KODA Resources

• Field: Fertile Valley (Divide County)
• Comments:
• KODA Resources has permits for four Stout wells, SESE 16-160-102; 
• two of which to be siteed 650 FFSL and with one at 827 FEL and the other 797 FEL;
• the other two will be sited 450 FSL with one at 778 FEL and the other at 748 FEL;

Five permits were renewed:

• CLR (4): two Charleston and two Olympia permits, all in Brooklyn oil field;
• Formentera Operations: SWD