Cadillac Lyriq debut today - will Ford give us any news to steal their thunder?

[Bond007]

While I agree that's what the market needs, getting there is a problem because the battery packs are still so expensive. Not sure what the wholesale cost is, but Ford is charging $5000 on the MME for an extra 24 kWh (ER). That would extrapolate to ~$15,000 for the first 75 kWh ($20,000 to get it up to 300 miles).

Then you have to add the cost of the entire rest of the vehicle to that. That puts the cost of even a low-end vehicle pushing $40k. But it's hard to sell a low-end vehicle for $40k. Most people spending that much for a vehicle want something nicer. That's why we're seeing $50k+ on most BEVs. (For instance, most MME buyers appear to be popping for Premium or GT, not Select).

Battery prices per kWh are simply gonna have to come down further before serious market share for BEVs occurs.

Add the cost of doing business with dealerships to that. I understand that with MME Ford gives a possibility of dealerships sticking to MSRP, somehow I feel that the MSRP already includes the dealership fees/ profit share. Pure online retailers such as Rivian, Tesla and others are going to make a killing at the expense of legacy automakers, if the dealership laws are not amended soon.

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[dbsb3233]

Add the cost of doing business with dealerships to that. I understand that with MME Ford gives a possibility of dealerships sticking to MSRP, somehow I feel that the MSRP already includes the dealership fees/ profit share. Pure online retailers such as Rivian, Tesla and others are going to make a killing at the expense of legacy automakers, if the dealership laws are not amended soon.

It's not nearly as big of a difference as many think. The average "profit" on a new car for a dealership is about $2000. (And buyers that know what they're doing can usually do far better than that.) That's not a big enough difference to "make a killing" from. Most of the dealership profits come from other things -- used car sales, trade-ins, parts & service, and financing.

https://www.cargurus.com/Cars/articles/show_me_the_money_how_do_car_dealerships_make_their_profit

Pricing at dealerships has already changed quite a bit in the internet era where it's much easier for buyers to compare and assess fair value. And there's a lot of fixed price programs (like through Costco, for instance). Plus consumers like to be able to shop in person. It's one thing for Tesla and their small handful of models to set up a showroom in a mall, but it's quite another for a large manufacturer with a wide variety of vehicles with a wide variety of options. Many consumers still want the huge car lots to go peruse, do test drives, and drive the car home that day.

 

[Bond007]

It's not nearly as big of a difference as many think. The average "profit" on a new car for a dealership is about $2000. (And buyers that know what they're doing can usually do far better than that.) That's not a big enough difference to "make a killing" from. Most of the dealership profits come from other things -- used car sales, trade-ins, parts & service, and financing.

https://www.cargurus.com/Cars/articles/show_me_the_money_how_do_car_dealerships_make_their_profit

Pricing at dealerships has already changed quite a bit in the internet era where it's much easier for buyers to compare and assess fair value. And there's a lot of fixed price programs (like through Costco, for instance). Plus consumers like to be able to shop in person. It's one thing for Tesla and their small handful of models to set up a showroom in a mall, but it's quite another for a large manufacturer with a wide variety of vehicles with a wide variety of options. Many consumers still want the huge car lots to go peruse, do test drives, and drive the car home that day.

I’d like to believe you, but how are dealerships able to offer $5-10k discounts for a $50k car (that is not at all an exaggeration) if their profit margins are only $2000. From what I heard about the higher priced trucks from GM / Ford, the manufacturer makes about 50% profit of the final price, so you can imagine how much the dealerships can demand as holdback.

 

[dbsb3233]

I’d like to believe you, but how are dealerships able to offer $5-10k discounts for a $50k car (that is not at all an exaggeration) if their profit margins are only $2000. From what I heard about the higher priced trucks from GM / Ford, the manufacturer makes about 50% profit of the final price, so you can imagine how much the dealerships can demand as holdback.

It's usually not the dealer taking $8000 off, it's more like the manufacturer taking $7500 off and the dealer negotiating with the buyer for those final $hundreds. Discounts off MSRP are already factored into that $2000 average profit on the sale of new cars. You're right that we often see big discounts off MSRP, but MSRP is often just for show. Manufacturers regularly run discounts that take thousands off MSRP prices (and are also reflected in the price the dealer pays for the vehicle).

Tesla lowers prices too (like they did on both the M3 and the MY), but it's just more direct and transparent since you're buying directly from the manufacture with fixed pricing.

It's the haggling aspect that most buyers don't like about the dealership model. But they usually like picking from a lot full of new vehicles, immediate test drives, driving away with the car same day, parts & service onsite, etc.

 

[ChasingCoral]

It's usually not the dealer taking $8000 off, it's more like the manufacturer taking $7500 off and the dealer negotiating with the buyer for those final $hundreds. Discounts off MSRP are already factored into that $2000 average profit on the sale of new cars. You're right that we often see big discounts off MSRP, but MSRP is often just for show. Manufacturers regularly run discounts that take thousands off MSRP prices (and are also reflected in the price the dealer pays for the vehicle).

Tesla lowers prices too (like they did on both the M3 and the MY), but it's just more direct and transparent since you're buying directly from the manufacture with fixed pricing.

It's the haggling aspect that most buyers don't like about the dealership model. But they usually like picking from a lot full of new vehicles, immediate test drives, driving away with the car same day, parts & service onsite, etc.

It's also feeling like the salespeople are so untrustworthy that you have to keep checking to see if your wallet is still in your pocket.

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