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Ford getting $9.2 Billion federal loan to build EV factories
cvalue13
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Good article.
A few interesting bits, on the state of the world and the U.S. push within it:
“The rush of incentives, government lending and private-sector investment has led to a manufacturing boom in the wake of the IRA. More than 100 battery and electric-vehicle production projects are announced or already under construction in the US, representing about $200 billion in total investments.
“Not since the advent of the auto industry 100 years ago have we seen an investment like that,” says Gary Silberg, KPMG’s global automotive sector leader.”
And:
“Ford’s battery borrowing comes through a facility within the US Department of Energy known as the Loan Programs Office, or LPO, that’s disbursed nearly $33 billion over the past 14 years. Since the IRA passed, the total amount now available for lending through the LPO is around $400 billion, and loan sizes appear to be trending upward. Ford’s loan is more than triple the borrowing by General Motors Co.from the same program last year.
The office is perhaps most closely associated with the failure of Solyndra, a solar startup that received a $535 million loan in 2009. But it also made a far more successful loan to Tesla Inc. the following year, at a critical moment when the company was struggling to get its breakthrough Model S sedan into production. With the help of $465 million in federal financing, Tesla ramped up its first factory in Fremont, California, went public, and is now the world’s most valuable automaker.”
And:
“In an interview with Bloomberg Green, Jigar Shah, the director of the Loan Programs Office who was a pioneering solar entrepreneur, described the federal government’s battery-lending moves as a way to “onshore and reshore” manufacturing. “The goal of the program is not innovation but to get more of the supply chain to be manufactured in the US.”
And:
Between 2009 and 2021, the Chinese government poured more than $130 billion worth of subsidies into the EV market, according to a report last year by the Center for Strategic and International Studies.
“That’s a conservative estimate,” says Scott Kennedy, a senior adviser at the research group. The sum doesn’t include indirect support in the form of tax reductions and cheap land for factories. All that was matched several times over by investment from the private sector, including a big investment from Warren Buffett’s Berkshire Hathaway Inc. into made-in-China EV behemoth BYD Co.
China now has an iron grip on vast swathes of the world’s battery supply chain. More than 80% of lithium-ion battery cell manufacturing capacity is in China today, according to BloombergNEF.”
And:
“Tesla is also poised to earn billions in production tax credits each year under the IRA, a number that will climb as it pumps out more batteries. Separately, the Biden administration has said that Tesla could be eligible for billions of dollars in subsidies if it opens up its charging stations to non-Tesla vehicles, something the company has started doing.”
A few interesting bits, on the state of the world and the U.S. push within it:
“The rush of incentives, government lending and private-sector investment has led to a manufacturing boom in the wake of the IRA. More than 100 battery and electric-vehicle production projects are announced or already under construction in the US, representing about $200 billion in total investments.
“Not since the advent of the auto industry 100 years ago have we seen an investment like that,” says Gary Silberg, KPMG’s global automotive sector leader.”
And:
“Ford’s battery borrowing comes through a facility within the US Department of Energy known as the Loan Programs Office, or LPO, that’s disbursed nearly $33 billion over the past 14 years. Since the IRA passed, the total amount now available for lending through the LPO is around $400 billion, and loan sizes appear to be trending upward. Ford’s loan is more than triple the borrowing by General Motors Co.from the same program last year.
The office is perhaps most closely associated with the failure of Solyndra, a solar startup that received a $535 million loan in 2009. But it also made a far more successful loan to Tesla Inc. the following year, at a critical moment when the company was struggling to get its breakthrough Model S sedan into production. With the help of $465 million in federal financing, Tesla ramped up its first factory in Fremont, California, went public, and is now the world’s most valuable automaker.”
And:
“In an interview with Bloomberg Green, Jigar Shah, the director of the Loan Programs Office who was a pioneering solar entrepreneur, described the federal government’s battery-lending moves as a way to “onshore and reshore” manufacturing. “The goal of the program is not innovation but to get more of the supply chain to be manufactured in the US.”
And:
Between 2009 and 2021, the Chinese government poured more than $130 billion worth of subsidies into the EV market, according to a report last year by the Center for Strategic and International Studies.
“That’s a conservative estimate,” says Scott Kennedy, a senior adviser at the research group. The sum doesn’t include indirect support in the form of tax reductions and cheap land for factories. All that was matched several times over by investment from the private sector, including a big investment from Warren Buffett’s Berkshire Hathaway Inc. into made-in-China EV behemoth BYD Co.
China now has an iron grip on vast swathes of the world’s battery supply chain. More than 80% of lithium-ion battery cell manufacturing capacity is in China today, according to BloombergNEF.”
And:
“Tesla is also poised to earn billions in production tax credits each year under the IRA, a number that will climb as it pumps out more batteries. Separately, the Biden administration has said that Tesla could be eligible for billions of dollars in subsidies if it opens up its charging stations to non-Tesla vehicles, something the company has started doing.”
Crissa
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Yeah, it's pretty important to make these investments, even if some don't work out. Everything will need batteries in the future, everything already does need batteries.
And we can't just stuff ships full of batteries and ship 'em here. We need too many. This is the way to true energy independence.
-Crissa
And we can't just stuff ships full of batteries and ship 'em here. We need too many. This is the way to true energy independence.
-Crissa
rodolfocampbell
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It's exciting to see this push for green tech, especially with a major player like Ford getting support. With EVs becoming the future, this investment can lead to great developments. My financial advisor (Mortgage Broker Swindon) says it's a great move. Can't wait to see what's in store!
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JWass
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This is good news! Some people may complain that EV’s and battery tech are being subsidized and thus artificially lowering their price. But it’s a drop in the bucket compared to what oil companies get subsidized. Which help offset refinery construction, drilling and exploration costs. Thus artificially keeping gas prices lower. In fact, there are very few industries that are subsidized by the Feds.
ÆCIII
Well-known member
While I like the fact it is a loan, my concern remains with how it is actually used.
The hemorrhaging leaky business model of Ford still includes MSM advertising (of which 1.47 $Billion was spent last year in the U.S. alone):
If you include what Ford spent on advertising worldwide last year, it goes up to 2.2 $Billion:
Then you have dealer networks and lobbies which force Ford to sell at a lower margin so they can be middleman skimmers and take their own profit for absolutely no contribution to innovation or production whatsoever. Then you have the unions and their imposed stagnation of production versus wages.
I'm sorry, I don't mean to throw a 'wet blanket' on the cash infusion but actually it's not just Ford getting the $9.2 Billion loan, but rather Ford, Dealership Networks, and the MSM as an establishment eco-group getting the $9.2 Billion, and by the time its all sliced out maybe half or two-thirds of that at most gets put into actual production, after non-producing entities take their cut.
Ford already has approximately $94 Billion in Long Term Debt as of the last quarter of this year:
Tesla on the other hand has approximately $2.42 Billion in Long Term Debt as of the last quarter, which is only 2½ percent of what Ford's Long Term Debt is, and just over a quarter fraction of this latest total additional 'loan' to Ford is.
Yet we see how the MSM and establishment are trying to treat Tesla versus Ford. Anyone else have a problem with that? Considering these factors, how much faith can one honestly have that this money will be wisely and efficiently spent, and how much of it will actually go toward the actual production of EV factories, EVs, or parts?
If Tesla hadn't competitively forced legacy auto into attempting to make EVs starting over ten years ago, Ford and others wouldn't be asking the government for this "EV" manufacturing money specifically, but they would still be asking for it all the same just for 'other' virtue labeled causes.
The business model of establishment legacy auto was already a problem well before EVs was even a childhood daydream of Elon's. I myself was avoiding car dealers like the plague already way back then too.
This 'money laundering' is not going to solve that either, which is one of the main reasons I've appreciated Tesla's substance focus and clean business model from day one. You're just never going to get the same value or quality in an EV produced, if the legacy auto company making it has too many mainlines of sending streams of money elsewhere other than production.
- ÆCIII
The hemorrhaging leaky business model of Ford still includes MSM advertising (of which 1.47 $Billion was spent last year in the U.S. alone):
If you include what Ford spent on advertising worldwide last year, it goes up to 2.2 $Billion:
Then you have dealer networks and lobbies which force Ford to sell at a lower margin so they can be middleman skimmers and take their own profit for absolutely no contribution to innovation or production whatsoever. Then you have the unions and their imposed stagnation of production versus wages.
I'm sorry, I don't mean to throw a 'wet blanket' on the cash infusion but actually it's not just Ford getting the $9.2 Billion loan, but rather Ford, Dealership Networks, and the MSM as an establishment eco-group getting the $9.2 Billion, and by the time its all sliced out maybe half or two-thirds of that at most gets put into actual production, after non-producing entities take their cut.
Ford already has approximately $94 Billion in Long Term Debt as of the last quarter of this year:
Tesla on the other hand has approximately $2.42 Billion in Long Term Debt as of the last quarter, which is only 2½ percent of what Ford's Long Term Debt is, and just over a quarter fraction of this latest total additional 'loan' to Ford is.
Yet we see how the MSM and establishment are trying to treat Tesla versus Ford. Anyone else have a problem with that? Considering these factors, how much faith can one honestly have that this money will be wisely and efficiently spent, and how much of it will actually go toward the actual production of EV factories, EVs, or parts?
If Tesla hadn't competitively forced legacy auto into attempting to make EVs starting over ten years ago, Ford and others wouldn't be asking the government for this "EV" manufacturing money specifically, but they would still be asking for it all the same just for 'other' virtue labeled causes.
The business model of establishment legacy auto was already a problem well before EVs was even a childhood daydream of Elon's. I myself was avoiding car dealers like the plague already way back then too.
This 'money laundering' is not going to solve that either, which is one of the main reasons I've appreciated Tesla's substance focus and clean business model from day one. You're just never going to get the same value or quality in an EV produced, if the legacy auto company making it has too many mainlines of sending streams of money elsewhere other than production.
- ÆCIII
BTW: No Automotive Company deserves any more taxpayer funded bailouts ever - period.
Crissa
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charliemagpie
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Yes. I sort of just fast tracked to this :
Just so happens, Tesla is spending 9 Billion in 2023. Ford would need a 10X handout to equal Tesla's efficiency.
Or put another way, After consultant fees, delays, cost overruns, Ford's 9 Billion will in the end net them 2 kilo's of Bananas. lol
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