Ford recently made significant price cuts on the Mustang Mach-E following the loss of federal tax credit eligibility at the beginning of the year. This led to discounts of up to $8,100 on certain trim levels, ultimately resulting in a decrease in Mach-E inventory levels due to increased sales.
In their Q1 2024 sales report, Ford disclosed that their electric vehicles, including the Mach-E, F-150 Lightning, and E-Transit, experienced a notable increase in sales. The Mach-E specifically saw a 77% rise in sales compared to the same period last year, reaching 9,589 units in the first quarter.
High MSRP is a barrier to wider EV adoption.
Multiple studies have shown that potential EV buyers are deterred by the high sticker prices. Price reductions initiated by Tesla last year demonstrated that competitive pricing with traditional gas cars can drive adoption of EVs.
Rick Wainschel from Cloud Theory emphasized the positive market response to the Mach-E price cuts, noting a significant increase in demand. Inventory levels saw a 9% reduction within weeks of the discounts being announced, indicating sustained interest in EVs when priced appropriately.
Despite the increased sales, Cloud Theory suggests that the Mach-E’s turn rate is still below industry standards, even after a significant improvement post-price cuts. These reductions were aimed at clearing space for the upcoming 2024 models.
Currently, Ford stands as the second best-selling EV manufacturer in the U.S., trailing behind Tesla by a significant margin. While Ford’s sales numbers are notably lower, the recent surge in demand for their EVs indicates a positive trajectory for the brand.
While the impact of the price reductions remains uncertain, it’s clear that Ford’s EV division faces financial challenges. Past estimates indicate substantial losses per EV sold, highlighting the brand’s struggle to achieve profitability.
Despite the hurdles, the recent increase in demand presents an opportunity for Ford to streamline costs and plan for future projects. The development of affordable electric vehicles on a BEV platform and strategic initiatives aim to position Ford competitively in the EV market, including against Chinese automakers and Tesla.