July 18 – Ford announced today that the company will be cutting the price of the F150 electric vehicle because the market is cooling off.
Although some wonder if the market was ever truly “hot” to begin with.
Pat Ryan of NewsTalk 103.7FM pointed out, “I thought this was a boutique market from the beginning. You see some of these Tesla’s driving around or some of these EVs. I did enjoy the hybrid. I thought the hybrid was a really good solution. But that market is or never really was hot in the first place. In fact talking with a number of car dealers and what they would be facing out of the manufacturers and all the stuff that they would have to put in to make these things happen. They’re still being forced to do this, but maybe they’re dialing it back with this market cooling off.”
The Ford F150 Lightning, an electric truck, initially cost about $60,000.
Attorney Clint Barkdoll said, “When they rolled that out about a year ago, and I don’t know what the production numbers were, it was pretty small, but they immediately sold out on the first day. But the price has been just astronomical.”
Ford has now reduced the price to $50,000.
Barkdoll continued, “Ford is citing a mixture of factors. One thing they’re saying is that the components to make the vehicle have declined, and they’re saying that its production has ramped up, it’s made it more efficient. But they are citing changes in consumer demand and competition. Now, you can read into that what you want. Maybe that’s meaning demand is not only cooling off, but because so many other companies are entering the space, you can’t keep extracting these crazy prices for these vehicles. When Ford reports earnings, they will break down typically how many units of this particular electric truck sold. I’m sure people will be comparing what that looks like year over year and quarter over quarter.”
Ryan added, “The other important thing here on this is how long those cars are sitting on the lot. I think the average is supposed to be about 50 and these things are sitting on the lot 90 days. As you look at the footprint that the car dealers are responsible for, they’re looking at their bottom line, too, going good grief, how much more do I have to eat on these things?”
Barkdoll said, “If the inventory of these existing F150 Lightnings is high, well, one way to try to move them is to start cutting the price. You wonder if that might be the prevailing factor in all of this discussion. If they have surplus inventory they need to move these things off the lots.”