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[orangefirefish]

There are certainly a lot of moving parts here.

Yes and the F-150 is far from a luxury product- plus Ford’s sales model and dealer experience leaves a lot to be desired if the comparison is against the cachet of those luxury brands. I just don’t see that type of intention here with the Lightning. F-150 has been and is a household, high volume product. With the high cost of auto R&D, tooling, line setup, and the efficiencies of scale, there’s not much point in a large automaker doing that aside from creating a special trim.
Sure the volume is limited now, it’s still an early stage product with supply constraints. They’re not purposely limiting volume as a whole for profit reasons. What they did do is pull a pretty fast one with the media and reviewers, leading folks to think they could get an EV pickup for a mass market price of $40K… when in reality that was a loss leader that they never intended selling to the masses. The PRO was purposely limited.

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[greenne]

Yes and the F-150 is far from a luxury product- plus Ford’s sales model and dealer experience leaves a lot to be desired if the comparison is against the cachet of those luxury brands. I just don’t see that type of intention here with the Lightning. F-150 has been and is a household, high volume product. With the high cost of auto R&D, tooling, line setup, and the efficiencies of scale, there’s not much point in a large automaker doing that aside from creating a special trim.
Sure the volume is limited now, it’s still an early stage product with supply constraints. They’re purposely limiting volume as a whole for profit reasons. What they did do is pull a pretty fast one with the media and reviewers, leading folks to think they could get an EV pickup for a mass market price of $40K… when in reality that was a loss leader that they never intended selling to the masses. The PRO was purposely limited.

I agree. Although it is hard to believe, I do think Ford got caught flat footed by demand. I do not think the "shortage" was planned in any way to either enhance uniqueness or drive up price.

If I'm being pragmatic, It is believable that Ford would have underestimated demand somewhat. At initial product development (maybe 2-4yrs ago?) the market outside of Tesla was rather thin. Chevy Bolt, BMW i3, and the Nissan leaf were not hot sellers and appeal to a different demographic. They are essentially viewed as built for economy and the running cost is the main sales push(vs Tesla which emphasizes performance). The Lightning would be the first to emphasize performance.. but also utility. Would this sell? No one really knew and Ford can't afford to screw up anything with their bread and butter..the f150. So go conservative, just in case and increase production if needed.

Ford has always made money by mass production. Ford has never been a niche brand, a uniqueness brand and exclusive sell. It would be hard for me to believe they would try this tactic(on the f150 no less) that they did not have experience in doing. Such a sales tactic has to be done just right and can easily be screwed up. I just don't see Ford risking it.

Ford is conservative as a company in recent years..some say too conservative. I just don't see them taking the risk on driving up the f150 price by slowing production. I'm guessing they would/will try to sell as many as they possibly can.

 

[hturnerfamily]

agreed...this is not a 'ploy', it's a business. They just have a HIGH DEMAND product, which is a good thing.

 

[Blainestang]

The Lightning would be the first to emphasize performance.. but also utility. Would this sell? No one really knew and Ford can't afford to screw up anything with their bread and butter..the f150. So go conservative, just in case and increase production if needed.

A couple other concerns I'm sure they considered:

Will it sell... at a price we can make money on?

Can we make enough that it doesn't Osborne Effect the gas truck business temporarily?

It was a balance, for sure. If they make it too good, people stop buying trucks until they can get an EV. If they build them but the Pro needs to cost $60k to make any money, that's no good either.

So, they had to wait long enough that the cost was feasible, and had to know they could ramp up at a reasonable rate.

IMO, there's *some* risk that as the Lightning gets out there that people get a chance to ride/drive in one and say they're not buying another truck until it's an EV, which could hurt gas truck sales in the short term somewhat.

 

[greenne]

A couple other concerns I'm sure they considered:

Will it sell... at a price we can make money on?

Can we make enough that it doesn't Osborne Effect the gas truck business temporarily?

It was a balance, for sure. If they make it too good, people stop buying trucks until they can get an EV. If they build them but the Pro needs to cost $60k to make any money, that's no good either.

So, they had to wait long enough that the cost was feasible, and had to know they could ramp up at a reasonable rate.

IMO, there's *some* risk that as the Lightning gets out there that people get a chance to ride/drive in one and say they're not buying another truck until it's an EV, which could hurt gas truck sales in the short term somewhat.

They obviously took a different approach than GM(or Rivian)--

Ford is after existing f150 owners or potential owners who they can convince to go electric. The tagline is-- everything you love about the f150(the looks, the feel, the utility) only much better.

Also-- Ford is trying to dominate the Fleet market. Ford is advertising ease of use, low cost of operation, interoperability with accessories/current upfits, etc. Low service requirements, decreased downtime, etc. Ford is making a strong business case. They have to keep the truck like old if they want to spur fleet/business sales.

Rivian is after people who want the latest and greatest EV and perhaps lifestyle crowd. I don't think they are marketing towards the hard core truck fans or current full size truck owners. (Maybe they can convince Ranger, Tacoma, etc owners to switch).

GM---??? I think somewhere in the middle..but will the Avalanche style turn people away?

 

[cvalue13]

Not 100% sure which is which:

F-150 has been and is a household, high volume product.

They’re purposely limiting volume as a whole for profit reasons.

No doubt Ford has been a “high volume product” - but one on the brink of financial ruin many times, only just this year repaying a $6B “loan”/subsidy from the Fed.

As mentioned before, it is being widely discussed by analysts that auto-manufactures are in recent years reducing production numbers across all lines in order to drive up and maintain retail prices: it is credited to being the reason Ford in recent years has increased net profits, while reducing revenue and total unit sales (something I think you yourself have noted a time or two before).

I don’t really take it to be controversial that auto manufacturers, including Ford, are doing this broadly across the industry.

And so I see no reason to doubt that it’s being done at the level of a “halo”
Product like the Lightning.

And that Ford isn’t a traditionally luxury brand really is irrelevant. It no longer takes being “luxury“ in price to be “luxury,” as I noted in the post

Turns out, having money to buy something is no longer how luxury is best defined - having access to buy something, is far more attractive and seemingly attainable.

The Idea that “luxury” means “exclusivity enforced by price,” is a bit of a dinosaur notion in marketing - because people discovered price is not the only means of enforcing exclusivity. Rarity works, and even better, from a psychological standpoint.

Neither is Starbucks a “luxury“ brand in the traditional sense (listed earlier as an example), or any number of other brands I could rattle off that have adopted a “drop culture” form of hype marketing where perceived rarity is employed to drive demand

And certainly neither is Nike viewed as a luxury brand, yet it has been at the forefront of redefining how luxury is marketed. So much so, “luxury” has long ago come looking to Nike to borrow its “new” version of luxury (Nike X Dior and Nike X Louis Vuitton as a few examples)

Which is all to say that: it’s irrelevant whether the brand is viewed as “luxury” for the brand to nonetheless benefit from artificial scarcity/exclusivity

Or have you not tried to purchase a Stanley thermos cup these days?

Or a McRib in the off-season?

Or a “limited” Swatch?

Or a BeanieBaby?



But look, the “magic” of these marketing strategies is that they work because ‘nobody’ believes it’s true … afterall, Nikes, Starbucks “unicorn” drinks, and F150L’s are simply commodities that have no actual intrinsic rarity.

The companies must first make you believe they are rare in virtue of some story…

… and then have you talk about them, wonder about them, fret over them, create spreadsheets and “cheat codes” to accessing them ….

… create communities around them, say, like a forum…

I wouldn’t want to take that away from you!

 

[WaitingInRaleigh]

This whole rollout is a cluster^&%# of historic proportions. Just inform your potential customers how long they will have to wait. How hard can that be?

 

[orangefirefish]

Not 100% sure which is which:

Apologies, typo. I meant I don’t get the impression they are limiting volume as a whole. Although certainly the PRO is limited.

 

[BennyTheBeaver]

This whole rollout is a cluster^&%# of historic proportions. Just inform your potential customers how long they will have to wait. How hard can that be?

As someone that had waited a long time, and will need to still wait a little longer for my Pro, it's easy to harp on Ford.

I think "cluster^&%# of historic proportions" is a pretty egregious overstatement. That sentiment should be reserved for the Cybertruck (for example).

Ford did under estimate demand because their current customers of ICE Ford F-150 didn't give them the appropriate demand because Ford didn't understand their target audience (as noted by the amount of people who reserved that have never owned a Ford or a Truck).

That being said, Ford has been behind from day one because they didn't poll the public (just current F-150 owners, a large majority don't care about EV). Since then, they've ramped up production, increased proposed output, and still are battling supply shortages like the rest of the industry.

I'm starting to think that the idea of Ford should "just tell us dates and info" is probably unfair because alot of it is out of Ford's control.

They have definitely done some things wrong...but alot hasn't been completely in their control.

 

[ivan256]

I think the desired balance of supply/demand might be a bit different than our intuitions first suggest.

From the perspective of the manufacturer, I think there are two main drivers in this - what I’ll call “new” style of - marketing and supply that is becoming more standard across industries:

(1) in the near term, have absolute certainty of supply and timing to market; that is, it is nearly invaluable to manufacturers to have a direct and 100% confident line of sight on all three of (A) an ability to sell every unit, (B) to sell it at full MSRP, and (C) to sell it as soon as manufacturing is completed. In the converse, manufactures of high-cost/low margins goods can be absolutely devastated by unsold units, units sold below MSRP, or units left as stranded stock for extended periods - all causing “bullwhip” effects in the manufacturing chain. So, compared to the alternatives, the relative value of being 100% certain to sell, say, 100 units at MSRP instantly is hard to overstate - in important ways, more valuable than being “mostly” certain you could instead sell 200 units.

(2) the second driver is almost philosophical and a bit harder to nail down: here’s the thing, it is possible that the reason there is so much extra demand is precisely because there is so little stock; not only is it possible, it’s increasingly the apparent world-view of manufacturers; as a result, it’s not as you say that “they can go way higher in supply” and not effect the correlating over-demand, but instead that as supply increases ~linearly, demand decreases ~exponentially.

So, on this manufacturing view, there is a sweet spot, errored toward significant under-supply, that almost paradoxically increases demand to levels that provide manufactures derisked certainty that they’ll sell every unit at MSRP instantly.

FYI, I come to all this from working in luxury manufacturing industries, where - like Birkin bags, stainless steel Rolex watches, ‘hype’ sneakers and clothing, NFTs, etc., etc., etc., these rules of manufacturing and managing supply-demand has become uncontroversial.

Perhaps the best singular example I can give: I know a manufacturer for certain products with Hermès, who in English (from their French) roughly translate this dynamic as “maintaining frustration in the client.” It’s an amazing little instance where the inexact translation actually creates rather honest phraseology.

So, “maintaining frustration in the client” is exactly what you see around this forum, and - and with Hermès and others - I suspect has Ford reading with great pleasure exactly the dynamics they hoped to create:

• a small group of “golden ticket” owners, thrilled not only with the product but especially the “golden ticket” attention it attracts

• a larger group of aspiring owners, all thinking regularly and positively about how they might one day become “golden ticket” owners

• another larger group of aspiring owners, all surface-level irritated and grumpy about not her being “golden ticket” owners, but still yet thinking regularly about achieving it, and despite their irritations almost undoubtedly committed to purchasing if given the chance

• a small group that have such irritation they would, if offered the chance to own, turn it down on principle

Meanwhile, all four of the above groups are interacting, talking, thinking, about a product in ways that never occur if instead Ford simply built a truck en masse.

Turns out, having money to buy something is no longer how luxury is best defined - having access to buy something, is far more attractive and seemingly attainable.

Sorry for the soap box, but from my vantage coming from the luxury manufacturing sector, I see nothing about the Lightning roll-out that suggests Ford is doing anything other than following the modern day marketing and manufacturing rule book.

I think your analysis is generally spot on, but it's missing a big point.

There are precious few $100k plus vehicles that have sold more than 100k units in their entire production run. There might not be any that have sold 100k units in a single model year.

Any benefit of exclusivity they might have had is right out the window come 2024 when these things will be by far the most common late-model six-figure vehicle on the road.

I'm also not aware of Rolex or Hermès ever taking paid-preorders and then telling those customers that they've altered the deal at a later date. That's not part of the brand-building playbook.

 

[hturnerfamily]

I have said more than once, and more than once today alone, that MEN do not want to buy an EV, they want to buy a TRUCK(!)... this is why Ford is having it's 'problems' delivering enough of these to placate the public - none of us would be on these forums if these 'trucks' were just sitting at dealers ready to be purchased. We are asking a LOT from Ford. Ford is doing what they can.

 

[cvalue13]

I think your analysis is generally spot on, but it's missing a big point.

There are precious few $100k plus vehicles that have sold more than 100k units in their entire production run. There might not be any that have sold 100k units in a single model year.

Any benefit of exclusivity they might have had is right out the window come 2024 when these things will be by far the most common late-model six-figure vehicle on the road.

I'm also not aware of Rolex or Hermès ever taking paid-preorders and then telling those customers that they've altered the deal at a later date. That's not part of the brand-building playbook.

But this is the point of “halo” products: they’re intended to sell themselves, so much as to sell the brand.

Nike doesn’t make its money selling the latest hype dunk for $200 a pair of which they only produce 4,000 pairs - it makes its money selling “dad shoes” by the millions, which are sold, in part, based on thevalue of the brand

 

[ivan256]

But this is the point of “halo” products: they’re intended to sell themselves, so much as to sell the brand.

Nike doesn’t make its money selling the latest hype dunk for $200 a pair of which they only produce 4,000 pairs - it makes its money selling “dad shoes” by the millions, which are sold, in part, based on thevalue of the brand

Even Nike doesn't take an order for their limited sneakers and change the deal later.

You've got the right idea except that isn't how Ford is playing it.

What percentage of Lightning reservation holders that don't get the truck they had a reservation for are going to buy a down-market Ford instead will be?

I'm guessing fewer than will swear off Ford forever.

If they wanted it to be a Halo product they did it wrong. They should have let dealers call their favorite customers and offer them the truck. Or they should have taken the reservations they intended to fill, and filled them. You've got a shot at making a sale to the guy who didn't get a place in line. You've probably blown it with the guy you made wait in line and then sent packing after selling something to the 10 guys behind him.

 

[BennyTheBeaver]

I have said more than once, and more than once today alone, that MEN do not want to buy an EV, they want to buy a TRUCK(!)...

I'm trying to figure out if this is a joke?!?

Aside from being sexist, it's also completely not true. According to an automotive research firm:

"Owners of the Model 3 are overwhelmingly male. Women only own 16% of Model 3s and men own 84%. That makes the Model 3 the most “male” of the Tesla models. Males own 77% of Model S vehicles and women own 23%."

The EV portion of this is more important to me than the Truck portion. If the Lightning didn't exist I would be looking for a different EV at this point before considering another ICE truck.

 

[cvalue13]

Even Nike doesn't take an order for their limited sneakers and change the deal later.

You've got the right idea except that isn't how Ford is playing it.

What percentage of Lightning reservation holders that don't get the truck they had a reservation for are going to buy a down-market Ford instead will be?

I'm guessing fewer than will swear off Ford forever.

If they wanted it to be a Halo product they did it wrong. They should have let dealers call their favorite customers and offer them the truck. Or they should have taken the reservations they intended to fill, and filled them. You've got a shot at making a sale to the guy who didn't get a place in line. You've probably blown it with the guy you made wait in line and then sent packing after selling something to the 10 guys behind him.

could be, but I still think Ford’s playing the part, even if they’re not a good actor

you may not really know the Nike drop environment. While Nike has absolutely “sold” pairs it later order-cancels, Nike also but primarily “maintains frustration” in its customer base through terrible, mysterious, unequal, “raffle” releases whereby for big drops there may 200,000-800,000 people attempting to buy the same 2,000 available pairs … each week, three or four different mornings each week … and. They. All. Keep. Coming. Back.

when Swatch & Omega released the MoonSwatch and said everyone would could get 2, and “anyone who wants one will get one,” and “we’ll sell them online soon,” which on release day resulted in world-wide lines, near riots, and ultimately Omega last minute reducing max but to 1 per person, delivering only a few hundred per store location, and several countries shutting down the stores for risk of violence. On that release, maybe 5% of people that waited in lines overnight actually walked away with a watch.

Omega/Swatch said, “gee-wiz, we never anticipated such demand!“ Then they followed up with “PS we’ve decided not to sell online afterall.”

Secondary prices for the MoonSwatch stayed at 2-4X for months thereafter (some models still are), Swatch got an amount of news and watch forum “press” that a billion dollars couldn’t buy, and …

… sales of the actual Moonwatch (Omega’s Speedmaster) rose >20% (overall sales also bumped demonstrably) Swatch Group’s stock saw considerable bumps, and - more importantly - huge chunks of the public now knew the words “MoonSwatch” and “Speedmaster” for the first time.

While the different types of “maintaining frustration” differ in some respects, and some may do it better or worse than others, at the end of the day what is roughly shared is this: being very comfortable in irritating many customers who, the data all suggests, do not in fact hold a grudge that changes their purchasing behavior.

There are exceptions that hold a grudge, but their numbers and value is minuscule compared to the press, exposure, and fever for the product otherwise produced by “exclusivity.”

Again, I’m not here suggesting Ford is a well-oiled machine at this sort of “new” manufacturing model - or that they aren’t ham-fisted and peppered with mistakes.

But instead only saying what started the conversation: that the overall plot arch here is far too familiar, far too by-the-playbook, to not at least completely ignore Ford’s official statements regarding its inaccurate demand estimates, etc.

Meanwhile, people here repetitively wonder aloud things like, “why does Ford find it so hard to just tell people how long they might be waiting!?” When to me one possible answer is pretty clearly an available option. Afterall, they’re right: it would be easy for Ford to address these issues with more clarity and adjusted plans to resolve all this “maintained frustration”

They may be sloppy and new to this, if even not cut out for it, but that doesn’t mean they aren’t playing the game.

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