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By Joseph White, Global Automotive Correspondent

Greetings from the Motor City!

It’s a summer Friday. It’s already been one of those eight-day weeks the Beatles used to sing about. And it’s not over.

Before we all clock out, could the U.S. government release some potentially controversial new vehicle fuel economy rules just ahead of quitting time? Find someone who will bet against you, and your first drink could be free!

Ok, no more time for wisecracks. Today –

• • Ford slows its EV roll

  • How Tesla games driving range complaints 

  • GM clashes with Biden over climate policy

Ford CEO Jim Farley

Ford CEO Jim Farley used Thursday’s Q2 results call to sketch out a sharp turn in the automaker’s electrification strategy. Not a full U-turn, perhaps, but a change in speed and direction abrupt enough to leave some analysts dizzy.

There was a lot going on in the presentation from Farley and CFO John Lawler. One way to put the pieces together is to start with what’s happening in Ford’s business:

Ford’s projected losses on its first-generation EVs are soaring, and now could total $4.5 billion this year – roughly 50% more than forecast just a few months ago. Tesla’s price-chopping and slower-than-expected uptake of EVs by mainstream U.S. consumers (aka Ford’s base) are clobbering the Ford Model-e EV unit with no near-term respite in sight.

At the same time, Ford Pro, the automaker’s commercial vehicle unit, is crushing it, delivering 15% pre-tax margins in Q2. Ford Pro sells mostly combustion vehicles, including the latest versions of the super-profitable Super Duty F-series trucks.

Farley’s response (sketched in Ford’s presentation here: ) Slow the ramp up of Ford’s money-losing EVs and feed more capital to Ford Pro’s strategy of bundling work vehicles with high-margin software products.

Put another way, Ford is sending capital to a business model that works and pulling back from a capital-burning war of attrition with Tesla.

Before yesterday, Ford’s official plan was to build 2 million EVs annually by 2026. Today, Ford no longer will say when it could hit 2 million EVs a year. The new key words for EV strategy: “Flexibility, balancing growth and profitability.”

One more thing: Over the next five years, Ford plans to quadruple sales of gas-electric hybrids such as the Maverick pickup and Ford F-150 hybrid.

As Toyota’s Akio Toyoda could tell you, climate action advocates aren’t fans of hybrids. But Ford customers are. Farley said 60% of Maverick buyers are opting for the 37-mpg hybrid version, far more than Ford planners expected.

As GM showed earlier in the week, the best-laid business plans often don’t survive the first encounter with market reality. Especially when the competition isn’t playing by Detroit’s rules.

How far does it go, really?

Tesla used in-car software to persuade drivers they had more driving range than they could likely achieve, and then created a team of employees to suppress customer complaints and visits to Tesla’s overloaded service centers, Reuters correspondents Steve Stecklow and Norihiko Shirouzu disclosed.

Members of that team would bang on a xylophone to celebrate a cancelled service appointment, sources said. Musk did not respond to Reuters questions.

It’s not clear what the fallout from these revelations will be. Range matters in the EV business. Tesla’s dominance in the EV market depends, in part, on its claims that its vehicles deliver driving range superior to most competitors.

Tesla has gotten in trouble with regulators in South Korea for overstating range. U.S. regulators have ordered Tesla to ratchet down range claims by an average of 3%.

But the Tesla approach to range, detailed by Reuters, suggests that this is one more area, like autonomous driving, where U.S. regulators are scrambling to keep up.

Should they stay or should they go?

Global automakers that once dominated the Chinese market are in trouble as domestic EV makers and Tesla gobble up market share.

Some are in full retreat, but others, including Volkswagen and General Motors, have little choice but to double down and fight for survival or resign themselves to becoming much smaller and less global – as shown here, and above.

For years, industry executives predicted a shakeout in China’s crowded vehicle market would clear away weak Chinese auto companies, some propped up by provincial governments.

Now, the players being sent to the showers could also include once-mighty global brands.

General Motors and the White House are butting heads over the Biden Administration’s efforts to attack climate change with much tougher vehicle CO2 emissions standards.

In a presentation to regulators, GM said administration emissions proposals – including fuel efficiency standards expected today from the National Highway Traffic Safety Administration – could cost the industry between $100 billion and $300 billion in fines and penalties from 2027-2031.

The White House told Reuters’ David Shepardson GM’s estimates of the potential fines are wrong by a factor of 100X – and the proposed rules could save consumers $18 billion more than they cost.

This dustup underscores the administration’s climate policy dilemma: U.S. President Joe Biden’s re-election efforts depend on winning votes from Michigan auto workers who build big trucks and millions of Americans alarmed by climate disruption. Their priorities are not the same.

Waymo said it will slow down its efforts to develop an autonomous truck driver, and focus instead on its Waymo One robo-taxi operation.

The move comes as rival Cruise, the General Motors robo-taxi unit, is accelerating expansion of its services in San Francisco, Phoenix, Austin and other cities where Waymo One is trying to build franchises.

Waymo, Cruise, robo-trucking company Aurora Innovation and others still hoping to turn a profit from autonomous vehicles are not getting much comfort from lawmakers and policy makers.

Federal legislation to clear the regulatory path for widespread, large-scale AV deployment is stuck in a loop, as demonstrated by a hearing this week. The AV and auto industry’s new argument – that the United States risks falling behind China in the AV version of the space race – isn’t working yet with lawmakers worried about the impact on jobs.

In California, homebase for much of the AV industry, lawmakers are advancing legislation that would require human minders to be in the cabs of robo-semis until at least 2030. The AV industry is trying to stop the train, but so far, opponents, including the Teamsters, are winning.

Robo-truckers get a much more welcoming reception in Texas, Arizona and other Southwestern states. But the robo-truck business model doesn’t work as well if trucks with no wage-earning humans aboard cannot haul loads from the Port of Los Angeles all the way to Dallas.

South Korean EV battery maker LG Energy Solution warned investors it sees slower EV demand in Europe and China. The warning from LGES came two days after Chinese battery power CATL reported sharply slower profit growth.

A top Panasonic executive said this week the Tesla supplier needs four more factories, notwithstanding what LGES and CATL had to say.

The United Auto Workers hailed the new contract negotiated by shipper UPS and the Teamsters because it eliminated UPS’s two-tier wage structure – which paid new hires less than veterans. Ending tiered wages at the Detroit automakers is a top goal for the UAW as it bargains ahead of a Sept. 14 strike deadline.

Volkswagen cut its full-year sales outlook to 9 million vehcles, down by 500,000 vehicles, in part because of declining sales in China. CFO Arno Antlitz promised more cost-cutting to sustain profits.

Mercedes raised its full-year profit forecast and executives said the luxury automaker expects to raise prices to cover higher costs. Mercedes’ Q2 sales rose by 6% and the company said its supply chain problems are easing – in contrast to Volkswagen’s Porsche brand which said it is still having problems getting all the components it needs.

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