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In the evolving landscape of electric vehicles (EVs), Ford Motor Company grapples with a growing predicament: an expanding surplus of EV inventory outpacing consumer demand. One Ford dealer on the East Coast, who requested anonymity to avoid potential repercussions, recently voiced their apprehension about the situation, emphasizing that the mounting stock of Ford F-150 Lightning and Mustang Mach-e models had not been witnessed to this extent previously.
According to the dealer, Ford's strategic decisions may be coming back to haunt them. They said, "I think Ford has a real problem on its hands, based on the bets it has made." The sentiments conveyed by this dealer are not isolated, as other Ford dealers have also declined their allocations for the new Mustang Mach-e due to concerns over sales viability.
One contributing factor to the lackluster sales performance could be the extended delivery times experienced by potential buyers. Many individuals who have placed orders for the F-150 Lightning likely have multiple EV reservations for different models, and they ultimately purchase whichever one becomes available first.
Consequently, this dynamic further hampers the conversion of orders into actual deliveries.
Ford Offers Unprecedented EV Rebates
Ford's current inventory situation was recently highlighted when it was revealed that the company had a 56-day supply of electric trucks, including vehicles in transit.
Ford has taken the unprecedented step of offering rebates to make their EVs more enticing. In select cities across the United States, customers can now enjoy savings of up to $2,500 on the F-150 Lightning, in addition to federal and state-level tax incentives.
Examining the sales figures paints a complex picture of Ford's EV trajectory. During the first half of 2023, the Detroit automaker sold nearly 23,000 battery electric vehicles (BEVs), reflecting a 12 percent increase compared to the same period in 2022.
Notably, F-150 Lightning sales experienced a staggering 281 percent surge. However, Mustang Mach-e and E-Transit sales encountered declines of 21 percent and 3 percent, respectively. Another metric shedding light on the situation is the turn rate, which measures the percentage of EVs sold from existing inventory.
In the second quarter of 2022, Ford dealers successfully sold 86.4 percent of their Mustang Mach-e inventory within the initial 30 days. However, that figure plummeted to a mere 27.7 percent in the second quarter of 2023, according to data shared by Cloud Theory and reported by Insider.
Ford recognizes the need to address these challenges head-on and has committed billions of dollars to ramping up EV production in North America. At the Rouge Electric Vehicle Center in Michigan, the production of their electric trucks is projected to triple this year.
Additionally, the Kansas City Assembly Plant will scale up the production of the E-Transit, which emerged as America's top-selling electric van in 2022. Furthermore, Ford aims to achieve a global annual production target of 210,000 units for the Mustang Mach-e by the end of 2023, manufacturing them both in Mexico and China.
As Ford grapples with its mounting EV inventory and strives to align it with consumer demand, the company faces a critical juncture in their electrification journey. The decisions they make in the coming months will be pivotal in determining their success and competitiveness in the rapidly evolving EV market.