The small truck market point that's brought up.

[fuzzyweis]

I was going to reply in another thread, but this goes a bit long and don't want to take from that. The topic of the market is brought up frequently, and having lived through most of it and still having a small EV truck I'd like to review some points on the market for the Slate or other small trucks.

I feel like the market concern is valid, but my view is the US systemically has just become unwelcoming for small trucks here the past 40 years. And most manufacturers instead of chasing the market, just went with profits.

Starting with the numbers, last full sales year of the small Ford Ranger in 2011, over 70,000 units, and first sales year of the small, but still not that small, Maverick, over 70,000 units, and almost double that 2 years later, that is not a Market that went away, it was just vacated.

In the 1970s the small truck craze started, imports from Japan, but in 1989 the chicken tax loophole was closed on shipping here without the bed or adding seats to the bed(Subaru).

But Americans had the bug, Toyota found ways around the tax, Nissan built them here starting in 1983, Toyota at the NUMMI plant in 1991 (yes, THAT NUMMI plant), so they weren't going away, Ford and GM kept making their small trucks.

So things were cool for like 20 years, and if you look at between the mid 80s to mid-2000s, small trucks didn't change much, grew a little but mainly styling changes. In 2008 the CAFE Footprint rule started, with hard enforcement in 2011, that along with the recession reducing the overall market and the small trucks just went away, Ford didn't even offer the 'new' Ford Ranger again here until 2018, even though they had a new version in 2011 globally.

So now, with EVs and hybrids, why haven't more car companies followed the Maverick into the market? It's clearly doing well, but only Hyundai tried and apparently failed. But if you look at the Santa Cruz it still gets the footprint rule applied and doesn't have the efficiency of the hybrid Maverick so it was really close to not meeting it, it was also more expensive, and according to people like Fuzzyweis on the Slate forums it's front end has all the appeal of a cheese grater, not trucklike enough, at least the Maverick cosplays the part well.

I'll quote a co-worker on why nobody else has brought back a smaller(let's not call the Maverick regular small) truck yet. "When manufacturers get too big, they're like a government, decisions can not be made quickly."

Look at Tesla and how quick car makes were to react, the Cadillac ELR was a sad attempt of repurposing the Volt platform, I test drove a used one recently, it was a dog, heck the Chevy Spark EV could out accelerate it at the time. Ford's closest attempt at a Tesla competitor, the Mach-E, came out a full 7 years after Tesla, 7 years! Tesla released it's 4th model around the same time.

Only in the past 5 years, and with help from China and Saudi Arabia are car makes starting to have models on par with what the Model S was over a dozen years ago, nevermind the Model 3 and Y that came after. Ford also recently said they built the Mach-E wrong, and if you look at the Munro teardown of the first model when he pulled the frunk liner out, it was obviously slapdash created to have 'something' to compete.

But what about Bollinger/Canoo/Lordstown? They were mainly targeting fleets and still expensive, the Bollinger was going to be over $100k, Lordstown over $50k, Canoo around $40k, and they still followed the standard road map Tesla used, buy an old car plant for way too much money, and just keep pumping money into it until critical mass is achieved. Even Rivian hasn't had a profitable year yet, and Ford and GM are taking write downs on their EVs.

Ford has spent 4 billion on their $30k Slate competitor and isn't even in production ready yet, that's 4x the expense of Slate so far, and that is their 'skunkworks' project. That's not Skunkworks, that's an entire Scout(funded by VW) factory build! So that's the upcoming competition and they're already so far behind in costs it's insane.

So with all that(and sorry it's a lot). I feel like there is a market, there is definitely a market still here. Even with all it's recalls Mavericks are flying off the lot. I see young guys driving around in old Rangers, Frontiers and SR5s around here, it's the south so they're still in great shape. Just this past week I saw a teal SR5 2WD with side stripes go by and some kid, looked like he was 12(to me) in it and his face was beaming just driving his truck.

Used small trucks are still going for crazy prices, 15 year old Ford Rangers with 100k miles on them in good shape go for $10k, Tacomas add another $5k, $15k for a 15 year old truck with over 100k miles on it! But truck makers see that and say, if they're willing to pay that much for something that old, new trucks should cost at least $50k, and new EV trucks another $10k on top of that, at least!

So I feel like Slate, with it's low cost so far in implementation, simple build plan, classic truck looks, and low price target, has a chance. Not saying it's a slam dunk, but the market is definitely there, the only reason other makes aren't jumping in the pool is they don't want to bother or just can't move that fast or that cheap.

-Jim

 

[ScooterAsheville]

Very well written, thank you for that. I have a few minor, and hopefully polite, disagreements, but generally I think you're on track.

I was honestly dumbfounded when Ford dumped the old Ranger 15 years back, but I kind of understood why everyone was abandoning truly small trucks - all the reasons you listed. One thing I'd add is demographics. Baby Boomers were aging out of small trucks into family SUVs, and the size of a demographic cohort matters.

• My first disagreement is the idea that Ford's BEV is a Slate competitor. I just don't buy that, which is a popular meme on this forum. Completely different target audience. Slate is going for cheap-ass pennypinchers like me who will buy a totally decontented, minimalist product. Ford is going for an audience that wants to feel they got a lot more than they paid for. In fact, the Ford program chief recently said in an interview that they're not going for classic truck buyers. They're going for CUV owners. I'd argue those are very different audiences. I would agree the Slate is a reborn Ford Ranger (the older generation of which I owned two).
• I disagree that Ford spent $4 billion on a Slate competitor. Ford spent plenty of billions on a BEV PLATFORM, one designed for and highly configurable for multiple tophats (several already announced). And one built in a factory that can scale to build multiple tophats under one roof. It is a highly contented vehicle with modern design features lacking in the Slate - OTA, zonal architecture, Blue Cruise, 48V and so much more. Also, the new platform premiers theoretically world-changing assembly line methodology. Meanwhile, Slate is regressing to the 1970s and calling that "innovative".

I don't like making predictions about the future, because I'm always wrong. We're gonna have to sit back and see how Slate fares. Hope Slate pitches a no-hitter on the opposition. But the game is nine innings long. We'll know Slate made it if they are prospering in the 2030s.

One other thing we don't know - what's going on behind closed doors at other OEMs? I suspect things are going on. But who knows if they'll reach the market. The easiest thing to say as a CEO of a car company is "NO".

I hope this came across as polite and respectful, as I really enjoyed your posting. I think you hit a lot nails pretty squarely.

 

[AeroWolf]

In multiple product industries, you can see a large amount of risk aversion to bring new products to market, especially products that compete against existing products. These manufacturers often try maximizing returns on sunk cost investments.

It often takes a new manufacturer to bring the new idea to market, because they are not encumbered by sunk costs into established products, and expected returns on investment. The potential loss in expected returns due to loss of market-share is what drives the existing manufacturers to increase their risk. Otherwise, a different external motivator (regulation, new activist leadership, etc.) is required.

You can see this auto, aviation, beer, appliances, movies, etc.

 

[fuzzyweis]

I hope this came across as polite and respectful, as I really enjoyed your posting. I think you hit a lot nails pretty squarely.

Absolutely, thank you for the response, and it's a great point on the Ford platform, but I will say their first product off the line, be it more like the Maverick or more like a Ranchero, will be compared to the Slate, or the Slate will be compared to.

I'm reminded of when I worked at an oil change shop years ago like a Jiffy Lube. The owner pointed across the street to the Walmart with it's oil change express, and proudly declared they weren't our competitor because we vacuumed the cars and cleaned the windshields and what not, a more 'upscale' experience. There were few people that actually cared, they saw price, and that they could go shopping while their car was getting serviced, the shop I was at did not last that long.

So I feel like, especially as familiar as we as forum members are with the Slate marketing, and the differences between it and what Ford or Telo or whoever will bring, to the public at large they will be cross shopping those with the Slate. It may just take sitting in the Ranchero Platinum's ventilated massaging seats while Sirius XM's smooth jazz station pipes through the 16 speaker sound system to make a person consider that over the Slate despite costing nearly 75% more.

To your point on the baby boomers aging out, one thing they aged into was crossovers. The higher seating position and easier entry was part of their appeal over sedans. Big trucks are comfier sure, but not as easy to get into.

To my original point I believe there is a market that can sustain multiple decent models at the right size and price, as there was 15 years ago. People want affordable vehicles under $30k, they like crossovers and SUVs for their higher seating and ease of entry, they like trucky looking things like Broncos and Jeeps for their rugged personas, they don't like the subscription infotainment junk that's creeping in, the Slate should meet most of these metrics pretty well, they just have to actually start selling the things lol.

-Fellow penny pinching cheap ass.

 

[mikell]

When there was still some S-10's with low mileage down south I would take buying vacations to get one. Now the miles on them are so high it's not worth it. Now have 3 Maverick Hybrids and am happy.

 

[Paul]

So I feel like Slate, with it's low cost so far in implementation, simple build plan, classic truck looks, and low price target, has a chance. Not saying it's a slam dunk, but the market is definitely there, the only reason other makes aren't jumping in the pool is they don't want to bother or just can't move that fast or that cheap.

-Jim

US market will be caught with their pants down. It was all pretty much about - We can make a lot more profit by not making small, inexpensive trucks. Suddenly this week as gas prices jump a dollar, with a war, EV interest will be up and we have nothing but Chinese competitors waiting to jump in. So if this keeps up to the fall, Which will probably start pushing us into a recession by then, that's going to be a good launch for Slate. To defend Ford a little bit that platform is designed not just for one vehicle but for an entire new DNA. A way of manufacturing and efficiency, I guess we see how that actually turns into production.

 

[dn325ci]

There’s no question that there is a small truck market, really as a replacement for small sedans and hatchbacks, and as an alternative to the ubiquity of the small crossover SUV. All those vehicles have a second row, however, and therefore the market for a two seat small pick up is unknown and something of a risk. Ranger and S-10 finally got extended cabs, and still wound up falling out of popularity.

 

[ScooterAsheville]

The point I try to make so often, when it comes to Slate isn't whether or not there is a market for small affordable trucks (or cars or SUVs for that matter), but whether a startup offering only a stripper, bare-bones, low margin punishment box will survive long enough to offer anything else. Let me argue with myself - I have zero evidence that Slate will be low margin. You have to be the Slate financial VP to actually know that. And since Slate is privately held, they don't need to report financials.

Slate offers low-scale, low-profit, low-appeal (??? definitely tbd ???), obstacles to purchase and support, and low trust as a new brand. In a market where you are competing with high scale competitors who can crush you by offering a loss leader at the drop of a hat. Again, let me argue with myself, because I don't know Slate's market appeal, because I can't see the future (150,000 $50 reservations of a $20,000 Slate is not a true measure either).

That said, I don't think the OEMs will bother to compete. I think Slate gets a competition-free ride for at least a few years. OEMs have vacated that "stripper" market segment for a reason. There's no margin to be made - the OEMs investment capital is better spent on more profitable vehicles. Slate thinks they can make money, and now we all get to sit back and watch (or participate in the experiment).

OTOH, Ford has been reporting record sales of its XL entry-level trim over the last year. Which means Ford went to the trouble of changing the mix it builds. I would love to know if they saw something that led them to change the mix of trims, or if it was fleet and customer orders forcing them to change?

Heck, I spend more time on this site arguing with myself than debating with others. I can see two outcomes to almost everything "Slate". Because it's untrodden ground in the future.

 

[Sparkie]

As a fellow penny-pincher, I owned and loved the 1990s Mazda-Ford pickup (which was a Ranger with a better engine). I drove it until it basically rusted to death.

@fuzzyweis , @ScooterAsheville , @AeroWolf , and @mikell ,
You are all correct, but I believe your comments about cheap pickup trucks vs big-luxury pickups should extend to all cars sold in the US.
@fuzzyweis - thank you for this new thread. (in the other thread with @ScooterAsheville , I was going to explain what my fellow truck owners discuss on this very topic.)

In other countries, these same auto makers build and sell simpler (more affordable) cars.
My job required a lot of international travel over the last 20 years and have seen for myself what Ford and others sold in those countries.

Why?

Because the most profitable division of these auto makers is NOT the passenger car, truck, SUV, or cross-over divisions.
The highest profit margin division is the Financing division.
The vehicles they sell in the US are just the "item" they offer to hook customers.
More expensive vehicles require bigger loans which yield more profits.
Furthermore, making decisions on interest rates and forecasting returns is much easier than design, engineering, and manufacturing decisions.
For executives that need to "answer to Wallstreet", this is a no brainer.

For all of this, I believe Slate is on the right path of making simple affordable vehicles for the population -- ironically, Henry Ford's original plan a long time ago.

 

[Sparkie]

Because it's untrodden ground in the future.

Yup.
20 years ago, the same could be said for the smart phone.
And people bought them up.

I think the insights that you and @Paul posted has high probability.
Soon, consumers will get wise that it's not good to sign a mortgage for a commodity known as a "car".
When that happens, as @Paul said, the US market will be caught with their pants down.

 

[The Weatherman]

I don’t have all the quality information and analysis of that data as some who have posted very informative information here, but I do have one point that needs to be made.

If (big if) Ford can deliver their feature rich $30k small EV pickup at or very near the same time Slate launches its scaled down, highly customizable, featureless $30k small EV pickup, the small EV pickup market is going to get split and may spell a disaster for both halves of the market.

That said, I have one of the earliest reservation on file for the Slate and want to see it succeed in a big way, but it would (will) be a tough decision which way I will fall in the end. And that’s even taking into consideration how Ford left us Lightning owners swinging in the wind with their cancellation of the sweetest vehicle I’ve ever owned.

And I’ve owned a few at age 68.

 

[Paul]

As a fellow penny-pincher, I owned and loved the 1990s Mazda-Ford pickup (which was a Ranger with a better engine). I drove it until it basically rusted to death.

@fuzzyweis , @ScooterAsheville , @AeroWolf , and @mikell ,
You are all correct, but I believe your comments about cheap pickup trucks vs big-luxury pickups should extend to all cars sold in the US.
@fuzzyweis - thank you for this new thread. (in the other thread with @ScooterAsheville , I was going to explain what my fellow truck owners discuss on this very topic.)

In other countries, these same auto makers build and sell simpler (more affordable) cars.
My job required a lot of international travel over the last 20 years and have seen for myself what Ford and others sold in those countries.

Why?

Because the most profitable division of these auto makers is NOT the passenger car, truck, SUV, or cross-over divisions.
The highest profit margin division is the Financing division.
The vehicles they sell in the US are just the "item" they offer to hook customers.
More expensive vehicles require bigger loans which yield more profits.
Furthermore, making decisions on interest rates and forecasting returns is much easier than design, engineering, and manufacturing decisions.
For executives that need to "answer to Wall

For all of this, I believe Slate is on the right path of making simple affordable vehicles for the population -- ironically, Henry Ford's original plan a long time ago.

If (big if) Ford can deliver their feature rich $30k small EV pickup at or very near the same time Slate launches its scaled down, highly customizable, featureless $30k small EV pickup, the small EV pickup market is going to get split and may spell a disaster for both halves of the market.

I'm curious what the actual size is of the new Ford EV, Ford calls it midsized and a Slate is smaller than a Maverick. So if they can pull off that efficiency and price out of a larger vehicle with stuff in it that will be another part of the equation or maybe it is Maverick sized and it's just marketing.

 

[The Weatherman]

I'm curious what the actual size is of the new Ford EV, Ford calls it midsized and a Slate is smaller than a Maverick. So if they can pull off that efficiency and price out of a larger vehicle with stuff in it that will be another part of the equation or maybe it is Maverick sized and it's just marketing.

I do expect the Ford to have a larger footprint than the Slate. I also expect it to have a larger $30k footprint than the Slate. I am interested in the long range battery of the Slate so I fully expect my Slate truck configuration to slide into the $30k category. You can see it in my aviator.

 

[E90400K]

US market will be caught with their pants down. It was all pretty much about - We can make a lot more profit by not making small, inexpensive trucks. Suddenly this week as gas prices jump a dollar, with a war, EV interest will be up and we have nothing but Chinese competitors waiting to jump in. So if this keeps up to the fall, Which will probably start pushing us into a recession by then, that's going to be a good launch for Slate. To defend Ford a little bit that platform is designed not just for one vehicle but for an entire new DNA. A way of manufacturing and efficiency, I guess we see how that actually turns into production.

The price of gas will drop back down to $3 in a few weeks; it's a short-lived price spike. I doubt it will move the EV market much. My opinion.

 

[ScooterAsheville]

...
Soon, consumers will get wise that it's not good to sign a mortgage for a commodity known as a "car".

Yes. Some of the car loan terms now are mind blowing. We're headed to ten year car loans. It's madness.

Another wrench in the gears, if it happens, will be transportation as a service. TBH, as I get really way up there in Boomer years, I can see myself not owning a car inside the decade. As long as a safe ride (human or robot) picks me up with a mouse click, why would I want to toss $10,000+ a year into the air when I could toss $5,000 a year for rides to the usual "ancient geezer" destinations?