Today, I am reminded of the famous saying in motorsports: “The best way to make a small fortune in racing, is to start with a large one.” Replacing “racing” with “electric vehicles” and you can describe Ford’s second-quarter results—which were still profitable overall even as the EV costs mount.

A happy Friday morning to you, Autopians, as we prepare to close out July and enter the final stretch of summer. (I hope you’ve done something fun with yours, I feel like I haven’t? I need to fix that with a road trip or something.) On today’s docket, we have that Ford Q2 news; some updates on how Tesla owners are feeling about the company vibes these days; some rays of light for AM radio; and General Motors wants to take new buyers to school to use all these fancy new tech features in cars. Let’s hit it.

Ford Has A Good Q2, Wall Street Still Unhappy

Here’s another saying that springs to mind today: “Damned if you do, damned if you don’t.” Considering various challenges like recall costs and supply chain headaches, Ford still managed what its executives called a solid Q2: net income of $1.9 billion.

However, it now projects to lose $4.5 billion this year on its nascent electric vehicle division, and revised down its production and sales goals on electrics through the end of 2023. Here’s Automotive News:

Citing consumer concerns with pricing, the company also scaled back EV output plans but vowed to continue on a path to earning 8 percent margins on EVs in three years.

Still, overall revenue in the quarter jumped 12 percent to $45 billion, and net income nearly tripled from a year earlier.

“It was a really strong quarter,” CFO John Lawler said in a call with media, noting it was “more evidence of what’s possible,” with the company’s Ford + growth plan.

Ford’s adjusted earnings before interest and taxes rose slightly to $3.8 billion. About $2.3 billion came from Ford Blue, the company’s gasoline-powered vehicle business. Ford made $2.4 billion on its commercial business, Ford Pro, and lost $1.1 billion on its electric vehicle business, Model e.

Ford Pro’s profit margins were 15 percent, while margins at Ford Blue were 9.2 percent.

Thanks, gasoline pickup trucks. But both Lawler and CEO Jim Farley were, like many in the industry after a year of ups and down, circumspect on EV stuff—yet Farley says Ford can afford to be cautiously optimistic here because it’s putting in the work now:

“The near-term pace of EV adoption will be a little slower than expected, which is going to benefit early movers like Ford,” Farley said in a statement. “EV customers are brand loyal and we’re winning lots of them with our high-volume, first-generation products; we’re making smart investments in capabilities and capacity around the world; and, while others are trying to catch up, we have clean-sheet, next-generation products in advanced development that will blow people away.”

Naturally, Wall Street analysts were skeptical. Here’s MarketWatch on that:

Share gains started to fade, however, as investors zeroed in on the shifted production goal, and ended the extended session down 1.2%. Ford said it expects to reach a production rate of 600,000 EVs in 2024; when it reported first-quarter earnings in May it said it would reach that milestone by the end of this year.

The company’s EV production growth has been “disappointing,” CFRA analyst Garrett Nelson said Thursday.

Nelson said he was “cautious” on Ford in light of the stock’s run so far this year and the possibility that “higher-for-longer” interest rates would weigh on sales after a strong first half of the year. Looming labor negotiations with the United Auto Workers are another reason for caution, he said.

All of those things in the last paragraph are fair, and the same kinds of headwinds facing many automakers right now. But I dunno, for all Ford’s challenges (and any legitimate criticism you could send its way over quality problems and such) it does seem like the company’s doing what it needs to be done to meet a more battery-driven future. And exactly what it said it would do: finance that with profitable gas trucks in the short term. Isn’t this what investors wanted?

By the way, Insider points out Farley thinks things are on the right track, and sees BYD, Tesla and Geely as its main EV competition, not GM or Volkswagen or BMW. That says a lot, I think.

Tesla Owners Love The Cars, But Elon Musk These Days, Not So Much

I have spent a lot of time inside Elon Musk’s head this year. Like, a lot, even for an automotive journalist who covers a lot of EV and emerging tech stuff. (It’s OK, I’m working through it, but I appreciate your concern.) And while there’s still endless respect for the guy in many corners for what he’s built at Tesla, there is a real loss of the superhero status he had, say, a decade ago when the Model S was challenging the best and proving the viability of EVs. He has no one to blame for this situation but himself.

Bloomberg recently revived a survey of 5,000 early Tesla Model 3 owners to see how they’re feeling about the cars, the brand and the man these days. They get high marks on the first one, but not so much on the other two:

Tesla’s most ardent early adopters have, to a significant extent, soured on the boss. Out of dozens of questions repeated verbatim from our 2019 survey, the steepest change of opinion was the drop in Musk’s approval. In total, the follow-up survey posed more than 130 questions; the lowest scores went to Musk’s 2022 acquisition of Twitter — which he renamed X — and to the divisive tweets that followed.

The survey comments were intense, and many felt conflicted. Model 3 owners still overwhelmingly loved their cars and had a lot to say about Tesla’s technology, which we cover extensively in this three-part presentation of the results. Most owners planned to stick with the brand. But they also reported feeling a sense of betrayal as Musk picked political fights online, downplayed the potential consequences of climate change and backed controversial figures and ideas.

“I love the vehicles but do not want to support someone who has such vitriol and low opinion of the very people who have made Tesla a success.”

There are also a good chunk of respondents who don’t care, say things like “Nobody doesn’t buy a Ford because they dislike Jim Farley” or “Hey, that’s what you get sometimes with billionaire genius innovators.” There are some other super interesting stats to parse here, including the fact that 96% of Model 3 owners say they would not want another gasoline-powered car again.

Also, these respondents claim that in terms of quality, their Model 3s have largely held up and proven to be reliable; in my own anecdotal experience I’ve seen those early cars to be pretty rough but I do think Tesla’s got build quality a lot more dialed-in these days. But on the Autopilot and “Full Self-Driving” front, results were a lot more mixed. “Some said it improved their safety with proper oversight. Others strongly disagreed. The general consensus was that FSD isn’t yet reliable enough for the average driver… FSD Beta is like my 15-year-old with her learner’s permit. You never know what it might do or why.” Sounds about right to me.

AM Radio Lives To Fight Another Day, Maybe

The august body that is the United States Senate is taking on one of the most crucial issues of our time as it undertakes the People’s Business: making it illegal for automakers to remove AM radio from cars. Here’s Automotive News:

The Democratic-led Senate Commerce Committee on Thursday advanced the bill, known as the AM Radio for Every Vehicle Act, which directs the Transportation Department to issue a rule requiring automakers to keep AM radio receivers in new vehicles as standard equipment.

A modified version of the bill allows the department to establish an effective compliance date within two to three years of a rule being issued. Automakers that made 40,000 or fewer passenger vehicles in 2022 would have at least four years to comply, according to the text.

“Americans rely on a radio to provide them with safety alerts, news, talk radio and music. Unfortunately, several automakers have announced plans to take this important resource out of cars. That’s a big mistake,” Sen. Ted Cruz, R-Texas, told committee members.

Automakers have sought to remove AM radio functions from new cars, especially from EVs, as they claim the signals could come with annoying static thanks to electromagnetic interference from batteries. But I tend to think it’s more of a cost-savings issue; OEMs would rather not bother with this function because it adds cost and complexity when they’re trying to pare those things down, and AM radio is a declining format anyway. Still, many pro-EV and auto industry groups oppose the legislation:

If Congress were to pass the mandate, it would “impede domestic EV manufacturing by demanding significant drivetrain redesigns and signal interference paneling,” The Zero Emission Transportation Association, whose members include Tesla, Rivian and Lucid, wrote in a policy brief.

“In turn, this would add weight to the vehicle and cost the U.S. billions of dollars in decreased economic output and job loss,” the group said.

Billions of dollars! A looming economic crisis! America in a state of permanent decline! All because some people haven’t discovered podcasts yet. Anyway, great news for all you sports talk radio fans out there.

Hybrid Sales Way Up

It is true that EV demand has declined this year as customers balk at their prices. But one thing I have heard from those who pay attention to such things is that hybrid demand is way up. Maybe it’s environmental awareness as this brutal summer cooks us all; maybe they’re just sick of paying for gas, which nobody loves. Either way, we’re generally pro-hybrid (especially for Normal Cars) around here so we’ll take it as good news.

Also taking it as good news is Toyota, which had a very successful June, reports Reuters:

In the month of June, global sales rose 10 percent to 898,947 units, benefiting from growing demand, including for electrified vehicles such as hybrids, in key markets such as the U.S. and Europe, the company said in a statement.

China sales in June posted their first monthly decline in three months, falling 13 percent to 174,548 vehicles. China sales were down 2.8 percent for January-June.

Global sales of hybrid electric vehicles grew 38 percent year-on-year to 292,131 units, accounting for just under a third of the total number of vehicles sold worldwide last month.

In June, Toyota sold 10,191 battery electric vehicles worldwide, including its Lexus brand, with about 5,000 of those sold in China. That brought the total number of battery-powered vehicles sold in the first half of 2023 to 46,171 units.

This is why I wish more OEMs would invest in hybrids (especially PHEVs) rather than “skip a step” and go straight to EVs, but hey, they don’t put me in charge of such things.

Your Turn

How much do you care about the company behind the car you make? My wife won’t ever buy a Volkswagen after the diesel thing; I would not say no to GTI, myself, but I’ve been consistently overruled there. At the same time, she’s more pro-Tesla than I am. Everybody’s different. How do you feel about it?