Does Ford have an issue with its growing EV inventory? Ford Model e’s vice president of electric vehicle programs, Darren Palmer, says “it’s a little premature” to worry about EVs piling up.
Is higher EV inventory a concern for Ford?
A new report this past week from Cox Automotive highlighted a record in EV sales in the US in the second quarter, with nearly 300,000 units sold.
Despite the rising number of electric vehicles sold, more and more are sitting on dealership lots. The days’ supply of EVs was over 100 this past month, compared to the industry average of around 53 days. So what gives?
Although EV sales will continue to outpace the industry, Cox suggests “the hard-growth days are over.”
Ford’s EV leader disagrees. In a recent interview with The Detroit Bureau, Palmer said, “It’s a little premature to be concerned about a pileup.” He explained that the automaker had been constrained on production since launching each of its EVs, the Mach E, F-150 Lightning, and E-Transit.
Instead, Palmer claimed, “We’re just loading up dealers” with EV inventory, adding:
Until now, every Mach-E (and Lightning) was backordered and people had to wait months for them. Now, we’ll have more, and have better deals.
Palmer said Ford decided to build capacity relatively quickly, but the “volume is just about to come online.” He added:
We’re also introducing a new LFP battery and making other changes that will allow us to move the price point(s) to a new area, as well as offer other derivatives in a completely new price (range) and bring it down. (The Mach-E has already) gotten more range, even as it’s gotten significantly cheaper.
To spark growth in an uncertain environment, several automakers, led by Tesla, have cut EV prices.
After raising the prices of its popular Mustang Mach-E and Ford F-150 Lightning several times last year due to overwhelming demand, Ford joined in with significant price cuts of its own.
Ford’s leader said EVs are entering the mainstream after reaching early adopters. However, “that may take a little time”; he believes this will be a short valley as the industry transitions to EVs.
Palmer has a point. More EVs on dealer lots and in inventory will be good for buyers as more deals roll out – but not so much on automakers’ bottom lines.
We are already seeing many automakers cutting EV prices or offering additional incentives to boost sales.
Ford’s EV sales slipped in the second quarter by 2.8% after upgrading its facility in Mexico, where the Mach-E is built earlier, this year.
Despite this, Ford’s VP of sales distribution, Andrew Frick, said, “Improved Mustang Mach E inventory flow began to hit at the end of Q2 following the retooling of our plant earlier this year.” Frick added that Mach-E sales climbed 110% in June while overall EV sales were up 35.5% last month.
After zero Mach-E’s were built in January, Ford has ramped production all year. Ford made 200 in February; 7,381 in March; 11,858 in April; 13,639 in May; and another 13,000 in June. This could be a reason for the pileup. We’ll keep you updated on the situation as more information is available.