Ford has huge inventory of Mach E

[jdeve]

I am waiting for better incentives. It looks like Tesla again lowered the price of their Model Y. Didn't the Mach E's price get adjusted the last time Tesla lowered the Modely Y?. The Model Y now starts at $36490 purchase price after the federal tax credit which you can get immediately applied. The long range model is $41,490 and the performance model is $44490. I like the Mach E better, the Model Y has a little better range and a little better performance. Is the Mach E worth $10-17 thousand more than the Model Y? Guessing Ford can't sell Mach E's with Model Y's so cheap right now.

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[superdave80]

Ford needs to take a page out of the Tesla handbook and slash their prices right now. The moment Tesla had even a whiff of inventory building up, they started knocking the price down.

 

[dbsb3233]

I am waiting for better incentives. It looks like Tesla again lowered the price of their Model Y. Didn't the Mach E's price get adjusted the last time Tesla lowered the Modely Y?. The Model Y now starts at $36490 purchase price after the federal tax credit which you can get immediately applied. The long range model is $41,490 and the performance model is $44490. I like the Mach E better, the Model Y has a little better range and a little better performance. Is the Mach E worth $10-17 thousand more than the Model Y? Guessing Ford can't sell Mach E's with Model Y's so cheap right now.

Yep. The tax credit changes destroyed them. Just over a year ago, the Mach-E got the $7500 credit and the Model Y didn't get any. Now the Mach-E lost the $7500 and some trims of the Y gained the $7500. That's a whopping $15,000 swing.

Killer for the Mach-E.

 

[dbsb3233]

Ford needs to take a page out of the Tesla handbook and slash their prices right now. The moment Tesla had even a whiff of inventory building up, they started knocking the price down.

Except Tesla has profits on their EVs that they could afford to cut into. It's just the opposite for Ford. They're already losing big money on all EVs and struggling to cut costs. Slashing prices just means even bigger losses.

Sadly, Ford needs to do just what it did: cut their losses by cutting production of money pit EVs. At least until they can cut costs (a lot). The primary plan for that being getting their own battery plants up and running so they don't have to pay premium 3rd party prices for them, and so they can qualify for tax credit again. The tax credit mess killed them.

 

[superdave80]

Just over a year ago, the Mach-E got the $7500 credit and the Model Y didn't get any. Now the Mach-E lost the $7500 and some trims of the Y gained the $7500.

Which tells you just how non-nonsensical the Federal tax credit is. They need to all go away.

 

[superdave80]

They're already losing big money on all EVs and struggling to cut costs. Slashing prices just means even bigger losses.

But if they don't move the '23s, what are they going to do with factories that have nothing to build? It seems at this point their two options are 1) Slash prices to move the '23s so that they can start to build '24s, or 2) Shutter all production/development of the MachE for now.

If there is another option, I'd like to hear it.

 

[dbsb3233]

But if they don't move the '23s, what are they going to do with factories that have nothing to build? It seems at this point their two options are 1) Slash prices to move the '23s so that they can start to build '24s, or 2) Shutter all production/development of the MachE for now.

If there is another option, I'd like to hear it.

The cars currently on dealer lots will end up selling at a loss to the dealers as they negotiate with buyers to get rid of them as they age.

They've already cut shifts at those factories. Yes, it's a loss but it's a bigger loss if they keep spending more money cranking out higher volume. They're literally cutting their losses until demand improves and they can get costs down. And hopefully get at least some of the tax credits back from qualifying battery sourcing. Not sure what options they have for that, other than just slowing down until they get their US battery plants open next year. And try to make it back on more ICE sales.

 

[superdave80]

The cars currently on dealer lots will end up selling at a loss to the dealers as they negotiate with buyers to get rid of them as they age.

If Ford makes the dealers take the loss on all these ‘23 vehicles, why would they order any ‘24s?

 

[dbsb3233]

If Ford makes the dealers take the loss on all these ‘23 vehicles, why would they order any ‘24s?

It's not really "making them" take a loss any more than it is making them take a bigger profit with ADM when the market is hot. That's the risk/reward of being a retailer with inventory. But to your point, yes, when sales are weak they won't order as many for inventory. Which is why Ford is cutting back production. Vehicles are still selling (better in some areas of the country than others), just a lot more slowly on the whole. And some are custom orders rather than off-the-lot. Dealers with a lot of inventory will probably not be ordering new ones for a while until they work through that excess inventory.

We've also heard of some instances where dealers have pulled out of the Model E commitment altogether and will just stick with selling ICE.

 

[KevinS]

Ford just has to work something out with dealers to cut their losses. If they don't, dealers will refuse to offer EVs in the future.

Can't emphasize enough how much Ford has botched their EV strategy. I never would have bought my MME if I had known they'd be so bad at this.

 

[nvabill]

The cars currently on dealer lots will end up selling at a loss to the dealers as they negotiate with buyers to get rid of them as they age.

They've already cut shifts at those factories. Yes, it's a loss but it's a bigger loss if they keep spending more money cranking out higher volume. They're literally cutting their losses until demand improves and they can get costs down. And hopefully get at least some of the tax credits back from qualifying battery sourcing. Not sure what options they have for that, other than just slowing down until they get their US battery plants open next year. And try to make it back on more ICE sales.

I just did a quick search on cars.com and some dealers are already aggressively discounting the '23 Mach E's still on their lots.

Check this one out, $10,000 price drop and now $15,000 off msrp, just one of many.

https://www.cars.com/vehicledetail/4fe4a81a-9e87-4c88-a900-28e63e15c24b/

 

[dbsb3233]

Ford just has to work something out with dealers to cut their losses. If they don't, dealers will refuse to offer EVs in the future.

Can't emphasize enough how much Ford has botched their EV strategy. I never would have bought my MME if I had known they'd be so bad at this.

I dunno, I doubt dealers were willing to share their ADM profits with Ford when the market was hot a few years ago. Not sure I'd offer the reverse now.

Plus 90%+ of the sales are still ICE (or hybrid) anyway. Which while impacted by high interest rates and the choppy economy too, are holding up better than EV sales. I don't think there's any Ford EV-only dealers, which are about to go out of business because Mach-E and Lightning demand hit a wall. They make up the losses and more with far more plentiful ICE sales.

Ford has botched the timing some. They committed too deep to BEVs a few years ago when they should have been easing in slower and focusing more on PHEVs. But to be fair, much of the blame lies outside of Ford. A huge one is how the tax credits got jacked around by the government. Those policies should have had like a 2-year lead time on them to allow manufacturers time to adjust. They can't just make new models and battery plants overnight. Takes years. Right now the tax credit situation favors more affordable PHEVs over expensive BEVs. And Ford's not ready to leverage that. Had they known 2-3 years ago, they might have been.

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