They scaled the production for the $40,000 truck they promised, but only gave the dealers the $58,000 or up models to sell. If you could buy a Lightning for $32,500 after federal tax credit they wouldn't be able to keep them on the lot. But that inital pent up demand was very high so they jacked the price way up to try to capture more money, and now they can't drop it back to Earth to reinvigorate the demand. Also, they're losing money on every truck they sell so dropping the price is undoubtedly distasteful to management, even though everyone knows that volume is how you make money.
Pretty much every dealer here in the Houston area, which might be the pickup capital of the world (or at least feels like it), is selling them for closer to $80k.
Increase volume when you lose money on every unit?
This isn't software... especially when you better accrue a giant pot of warranty money for the inevitable battery and system recalls over the early infant years.
I agree with your initial premise about actually introducing low-cost versions, but these must be subsidized by the high margin versions just like airline flights. Business travel pays for the infrastructure used by the masses.
The whole model depends on high-margin cash flow carrying the business forward into the high-volume, low-margin production. If there isn't any cash leftover, the whole thing crashes into the terminal at the end of the runway in a fireball.
They should just take away the Chinese tariffs at this point so BYD and Geely can come in and clean the US automakers out. Any idiot can see that a cheap EV or even hybrid is all people want, but no one wants to deliver it.
Just for a point of reference the BYD electric pickup with a smallish 85kWh battery pack and few features has a MRSP of about $32,000 US. There is zero chance it would qualify for the federal tax credit however, even if it were available in the US. Still, many vehicles are getting their tax credit cut in half next year due to stricter domestic sourcing rules.
I think domestic automakers underestimate the number of buyers who's first, second, and third priority is low price. They have all forgotten their origin as the company that sold the lowest price most mass market vehicle to people who couldn't previously afford them.
The point of the Chinese tariffs is precisely to prevent companies from BYD and Geely from killing American automakers with their cheap, low-quality cars.
(BYD, for example, is notorious for the abysmal quality of its electric busses, which are so bad that they're now effectively banned from consideration by most American public transit agencies. A SoCal agency bought several dozen busses a few years ago; only a single bus survived a year without major problems. Contrast that with their ICE or natural gas counterparts, which last decades.)
There were people waiting for the Cybertruck pricing announcement; they were like "If the Cybertruck is actually $40K I'll get that, but otherwise I'll get a Lightning". Or "If they actually have a 500 mile Cybertruck I'll get that despite its looks".
Neither came true, so Ford is probably reducing production just as they get a bump in orders.
Tesla screwed the pooch with the Cybertruck. The looks get crapped on a lot, but if they were selling those things for $40,000 people would have bought them anyway, especially if it qualified for the full federal tax credit. The $70,000 price point is an early Christmas gift to Ford and Rivian.
Exactly. Now, the lack of inventory will cause slow sales to become a self-fulfilling prophesy
This, plus, I'm not sure the F-150 was the right platform target to begin with. Maybe for commercial sales, but not necessarily for the general public. The F-150 Lightning is still a "big" truck, and the trim options actually available from dealerships all seem to be the most expensive ones. There are zero models within 100 miles of me at the base trim, and only one under $70,000, but dozens of everything-but-the-kitchen-sink trucks that are priced more like real estate than vehicles. All I want is a no-frills electric truck that I can go grab some boards from the local hardware store with. Instead I'm better off with a Ford Ranger that gets 26 MPG and putting the $50,000+ I saved into offsetting my carbon impact a different way.
I wanted the $40-50k Lightning. I called all of my dealers I've ever bought from. None of them had it. They had the $80-100k Lightnings.
The couple of people I know who got the base model got them through buying fleet trucks. I cannot afford to buy 5 trucks, I can't afford to buy 1 truck at the current prices.
Thankfully, my 2019 Ford Ranger is probably the closest to the perfect truck as I think I can get, big enough to handle 8 foot lumber, small enough to drive in any congested city (at least in America).
>"The news comes amid an industrywide pullback in EV investment due to slower-than-expected sales growth."
This slower-than-expected sales growth is primarily due to the higher-than-expected pricing increases across the board for EVs that are made by car companies that aren't 100% EV by design, as well as higher interest rates.
I have zero interest in ever buying a new vehicle again in having to interact with a dealership, particularly when every dealer now feels entitled to some random markup in price over MSRP. Despite Musk's cringe factor these days, I'll applaud Tesla for setting a bar in removing the sketchy dealers from reselling their cars and only sell directly.
There is little reason for automobile dealers to exist anymore if they're just going to sell at MSRP+dealer markup, there is no value add, they are merely parasitic. The whole point of going to a dealership used to be to get them UNDER MSRP as much as possible, which is how the racket worked. If I wanted to pay retail, I should just be able go to the Internet, pick options I want, and go pick it up when it shows up like a Tesla.
People should insist on removing the asinine legal requirement for dealers and modernize around the Internet, everyone's lives would be improved significantly other the parasite auto dealers. Remove the middlemen dealerships, get cheaper vehicles. Win Win.
Automobile dealers are simply something that should not exist anymore, and this becomes more true every day.
Unlike Tesla, which makes a profit on its EV's, most other EV makers lose money on every car. Losing money on every car when there are economic clouds approaching probably doesn't make the accounting department happy.
Are they? I haven't seen any numbers to back up that claim. Do you have any you can share? I know that Kia has been seeing record profits on the back of strong EV sales, but perhaps they're an outlier.
Where I live (admittedly not representative of the entire country) I see a ton of non-tesla EVs, but they are all compact SUVs like the mach-e, vw id4, hyundai etc. Not many trucks other than that Rivian
Without proper parking sensors buying a €45k car (model Y) nowadays is a risky gamble. Closer to the dense cities parking by intuition can be dangerous - even simple white bumper repair goes for 500-700€ in not so reputable repair shop. Vision only failed badly and no solution in sight.
And now with all the stamped parts the insurers are going crazy. The cars after easy crash are basically thrash. Proper identification of damaged parts is very expensive and proper repair not worth it at the end anymore.
Better charging is the only one of those three where I think you could argue Tesla has the advantage.
Engineering seems like is becoming more problematic with time, and experience is mostly subjective, but also feels like is losing ground.
Charging is definitely better with Teslas for now, but the tide is starting to turn a bit here as well, on both sides: Superchargers are becoming compatible with CCS with the introduction of the Magic Dock, plus non-Tesla manufacturers are starting to use NACS.
Better charging, yes, but I feel like many other models are better in measurable ways. I drive an EV6, so I'm biased, but things like V2L, CarPlay, ventilated seats, etc, are all great options that I couldn't get in the Model 3. Add in reputational things like build quality and none of the headline-grabbers like AutoPilot or FSD failures. (There are some things I envy in the Model 3, but overall, I feel it's a well balanced car)
I don't think driving a truck means that you're necessarily against EVs. The Rivian is proof that truck buyers do want EVs. Ultimately a truck has to provide utility. The Lightning just doesn't offer enough utility for the price.
I initially put down a deposit on the Lightning, but then the price got jacked up multiple times. And there were quality issues, and the towing range was terrible, and the charging network was subpar. It's not surprising that Ford is having to cut production.
I feel like the primary issue is the charging network and range. Tesla makes up for its lack of range with an extremely robust network. It doesn't seem like Ford is doing anything to reassure customers they will be able to charge their truck while on a road trip. Americans love to drive. You can get a ICE F-150 with a 35 gallon fuel tank, which will get you 500 miles of highway range. If you tell someone that the Lightning will only get 200 miles of range on the highway, generally they will find that amusing and make some sort of comment about how they don't want the government to force them to buy electric vehicles.
[+] [-] jandrese|2 years ago|reply
[+] [-] bdcravens|2 years ago|reply
[+] [-] el_don_almighty|2 years ago|reply
Increase volume when you lose money on every unit?
This isn't software... especially when you better accrue a giant pot of warranty money for the inevitable battery and system recalls over the early infant years.
I agree with your initial premise about actually introducing low-cost versions, but these must be subsidized by the high margin versions just like airline flights. Business travel pays for the infrastructure used by the masses.
The whole model depends on high-margin cash flow carrying the business forward into the high-volume, low-margin production. If there isn't any cash leftover, the whole thing crashes into the terminal at the end of the runway in a fireball.
[+] [-] zhivota|2 years ago|reply
[+] [-] jandrese|2 years ago|reply
I think domestic automakers underestimate the number of buyers who's first, second, and third priority is low price. They have all forgotten their origin as the company that sold the lowest price most mass market vehicle to people who couldn't previously afford them.
[+] [-] bryanlarsen|2 years ago|reply
[+] [-] gamblor956|2 years ago|reply
(BYD, for example, is notorious for the abysmal quality of its electric busses, which are so bad that they're now effectively banned from consideration by most American public transit agencies. A SoCal agency bought several dozen busses a few years ago; only a single bus survived a year without major problems. Contrast that with their ICE or natural gas counterparts, which last decades.)
[+] [-] coolbreezetft22|2 years ago|reply
[+] [-] bryanlarsen|2 years ago|reply
Neither came true, so Ford is probably reducing production just as they get a bump in orders.
[+] [-] jandrese|2 years ago|reply
[+] [-] anticorporate|2 years ago|reply
This, plus, I'm not sure the F-150 was the right platform target to begin with. Maybe for commercial sales, but not necessarily for the general public. The F-150 Lightning is still a "big" truck, and the trim options actually available from dealerships all seem to be the most expensive ones. There are zero models within 100 miles of me at the base trim, and only one under $70,000, but dozens of everything-but-the-kitchen-sink trucks that are priced more like real estate than vehicles. All I want is a no-frills electric truck that I can go grab some boards from the local hardware store with. Instead I'm better off with a Ford Ranger that gets 26 MPG and putting the $50,000+ I saved into offsetting my carbon impact a different way.
[+] [-] jermaustin1|2 years ago|reply
The couple of people I know who got the base model got them through buying fleet trucks. I cannot afford to buy 5 trucks, I can't afford to buy 1 truck at the current prices.
Thankfully, my 2019 Ford Ranger is probably the closest to the perfect truck as I think I can get, big enough to handle 8 foot lumber, small enough to drive in any congested city (at least in America).
[+] [-] GenerWork|2 years ago|reply
This slower-than-expected sales growth is primarily due to the higher-than-expected pricing increases across the board for EVs that are made by car companies that aren't 100% EV by design, as well as higher interest rates.
[+] [-] bryanlarsen|2 years ago|reply
[+] [-] bastard_op|2 years ago|reply
There is little reason for automobile dealers to exist anymore if they're just going to sell at MSRP+dealer markup, there is no value add, they are merely parasitic. The whole point of going to a dealership used to be to get them UNDER MSRP as much as possible, which is how the racket worked. If I wanted to pay retail, I should just be able go to the Internet, pick options I want, and go pick it up when it shows up like a Tesla.
People should insist on removing the asinine legal requirement for dealers and modernize around the Internet, everyone's lives would be improved significantly other the parasite auto dealers. Remove the middlemen dealerships, get cheaper vehicles. Win Win.
Automobile dealers are simply something that should not exist anymore, and this becomes more true every day.
[+] [-] floxy|2 years ago|reply
Well, for Ford, that's supposed to get you on the naughty list.
https://www.kbb.com/car-news/ford-ceo-warns-dealers-cut-the-...
[+] [-] nashashmi|2 years ago|reply
[+] [-] jupp0r|2 years ago|reply
[+] [-] givemeethekeys|2 years ago|reply
[+] [-] bdcravens|2 years ago|reply
[+] [-] daft_pink|2 years ago|reply
[+] [-] coolbreezetft22|2 years ago|reply
[+] [-] lnsru|2 years ago|reply
And now with all the stamped parts the insurers are going crazy. The cars after easy crash are basically thrash. Proper identification of damaged parts is very expensive and proper repair not worth it at the end anymore.
[+] [-] jader201|2 years ago|reply
Engineering seems like is becoming more problematic with time, and experience is mostly subjective, but also feels like is losing ground.
Charging is definitely better with Teslas for now, but the tide is starting to turn a bit here as well, on both sides: Superchargers are becoming compatible with CCS with the introduction of the Magic Dock, plus non-Tesla manufacturers are starting to use NACS.
[+] [-] bdcravens|2 years ago|reply
[+] [-] jerlam|2 years ago|reply
[+] [-] coolbreezetft22|2 years ago|reply
[+] [-] patwolf|2 years ago|reply
I initially put down a deposit on the Lightning, but then the price got jacked up multiple times. And there were quality issues, and the towing range was terrible, and the charging network was subpar. It's not surprising that Ford is having to cut production.
[+] [-] allenrb|2 years ago|reply
[+] [-] halyconWays|2 years ago|reply
[+] [-] philg_jr|2 years ago|reply
[+] [-] bryanlarsen|2 years ago|reply