Posted on 07/28/2023 12:12:29 PM PDT by Red Badger
(By Jon Miltimore, FEE) Ford Motor recently announced it is slashing prices on its F-150 Lightning, an electric vehicle the company rolled out in 2021.
The Lightning now carries a suggested retail price of $49,995, about $10,000 lower than its previous recommended price tag ($59,974), a reduction the company says is possible because of lower “battery raw material costs and continued work on scaling production and cost.”
It’s certainly possible that reduced overhead from battery minerals and production costs played a role in Ford’s decision to trim its price tag by nearly 20%, but that may be only half the story.
Several reports show EVs are not exactly flying off dealership lots. In fact, there’s a glut of them.
“After a prolonged period in which EVs quickly disappeared from dealerships, the electric vehicle industry now has the opposite problem: unsold models are piling up,” reported Money last week. “About 92,000 EVs currently sit on dealers’ lots; that’s a 342% increase from a year ago, when only about 21,000 did so, according to automotive research firm Cox Automotive.”
Ford is not immune from the weakened demand for EVs. Sales of its flagship car, the Mustang Mach-E, have slumped, down 44 percent in May from the same month last year.
The Lightning, which won the title of EV king of pickup trucks after Ford moved nearly 16,000 units in 2022, has fared better but is still struggling to keep pace with 2022. And now the company is facing some stiff new competition. (More on that in a minute.)
This was not the scenario many people predicted.
In April, the International Energy Agency released a report in which it predicted EV sales to increase 35 percent after a record-breaking year. But economists I spoke with said such predictions were overly optimistic considering current macroeconomic conditions.
This invites important questions. Is the glut of EVs simply a product of tightened money supply?
Apparently not. As Axios noted, the 92,000 EVs currently sitting on lots is comparatively high relative to gasoline-powered cars.
“That’s a 92-day supply — roughly three months’ worth of EVs, and nearly twice the industry average,” wrote Joann Muller. “For comparison, dealers have a relatively low 54 days’ worth of gasoline-powered vehicles in inventory….”
In other words, dealerships are sitting on a lot more EVs than gasoline-powered vehicles—despite efforts to entice consumers to buy EVs with taxpayer-funded credits up to $7,500.
This is evidence that pretty much everyone—from central planners to auto manufacturers—misjudged the demand for EVs, which are not even as environmentally friendly as politicians would have you believe.
Not only do EVs require an astonishing amount of mining—an estimated 500,000 pounds of rock and minerals must be upturned to make a single battery, physicists point out—but their carbon footprint isn’t much smaller than gas-powered cars.
It turns out that EVs actually require a lot more CO2 to produce than gas-powered cars. EVs can make that up, but it takes a great deal of time because EVs also often run on electricity generated from fossil fuels. Just how long? In 2021, Volvo admitted that its C40 Recharge has to be driven 70,000 miles before its carbon impact is lower than its gas-powered version.
All of this is to say that a bunch of unused EVs isn’t just a financial headache for auto dealers and motor companies; it’s also an environmental problem.
That said, the weaker than expected demand for EVs doesn’t mean the future of electric vehicles is doomed. On the contrary, demand for EVs is likely to increase as battery technology and EV infrastructure improves. Ford’s Lightning, for example, only has half the range of its gas-powered F-150 because of its small battery—a clear concern when charging stations are not yet readily available in many places.
For now, however, motor companies are competing with one another to attract customers in a smaller than anticipated EV market. Which brings me to Elon Musk.
Tesla last week rolled out its much-hyped Cybertruck, which is a direct challenge to the Lightning, and likely played a role in Ford’s price cut.
Federal lawmakers may have created a glut of EVs with their meddling, and it’s likely to have an adverse impact on both the auto market and the environment. But one of the virtues of capitalism is that consumers will ultimately decide who wins in the EV market and who loses.
Whether that turns out to be Musk’s Cybertruck or Ford’s Lightning remains to be seen. Either way, the competition is bringing down prices, which is a win for consumers looking to purchase an EV.
But the glut of electrical vehicles on the market reveals the danger in letting lawmakers decide what consumers should be driving.
If they want to move them off the lot, I suggest having a fire sale.
Maybe that’s why they are piling up. People don’t want to burn their houses down. LOL!
People are smacking themselves on the head and saying “I could have had a V8”.
Given news of that fire off the Dutch coast, its in the realm of possibility.
They do that all by themselves...................
Good.
Do you think the businesses care about market forces?
“People are smacking themselves on the head and saying “I could have had a V8”.
LMAO. That’s really good.
......I suggest having a fire sale......
Nicht so gut!!!!
BAN EVs in the USA and beyond!!!!
I live only a couple of miles from a Tesla dealership and the number of cars there just keeps on increasing every time I drive by. They’re practically out of room to store them now.
The secrets are coming out on those white elephants.
No one wants a ticking time bomb in their garage that may or may not spontaneously combust whether it’s charging or not.
Got a friend that has a salesman friend at a local dealership. The other day he asked how EV sales were going, the salesman said they can’t give ‘em away.
I thought tesla only built to spec after order and down-payment? 🤔
This was not the scenario many people predicted.
Actually, lots of people predicted this scenario. The ones that ignored it are the greedy politicians and investors that have and are pushing these things on everyone, regardless of their ability to do what they say the EVs can do. They’re POSs, pure and simple.
The savior of the world, isn’t he...nothing but a snake oil salesman
Tesla created secret team to suppress thousands of driving range complaints .... https://www.reuters.com/investigates/special-report/tesla-batteries-range/
Problem is the 50k base models are no where to be found, while the 80k+ models are the majority of what is sitting on dealers lots with another 15k over MSRP adjustment. If you want to spend 80k on a EV truck, you just have to be lucky enough to walk in when a dealer has to trim back it floor plan. A few people are getting MSRP with ornerouse dealer sold financing on the EV-150s. Buying with cash at MSRP still is not back to a thing. Willing Customers have to hold out and say you have 5 on your lot, 120 days worth, MSRP all cash deal is my final offer. The rest of us who have 50k to spend on an EV, will wait and pick up the deals.
Let the EVs sit around for a while and they will become a self-starting fire sale.
Stories like this only reinforce the reputation of the EV as a serious fire hazard:
I’m not buying an EV. Nope.
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