SUPER EXCITED! Got my invitation to order today!

[chl]

I got the invite, but I am suffering from sticker shock. All the local dealers (greater DC/Va/Md area) have '22 Lariats in stock, usually only one or two, but the in stock trucks have a ADM of $4,000 to $10,000. I found one Pro but the sticker MSRP was $41k and the asking price was $62K!!! OMG. Gouging.

Feels like a bait-and-switch situation with the $39k announcement turning into $50k starting price.

I was surprised there were ANY in stock with the allegedly high demand. But none were less than $72k and many were over $80k. Say good-bye to the $7,500 federal tax credit - only available if you have that much tax liability anyway - if the price is over $80k beginning in 2023 under the new law.

I presume that means $80 at the time of purchase which would be 2023 if I ordered one. If I buy one under the old law now, in 2022, no price cap I assume.

My selected dealer, Ourisman Ford, agreed to sell me one at MSRP if I order a new one, and said they'd negotiate the $10k ADM if I bought one of the two they have in stock.

I just can't get my head around a $70k pickup truck. Sure it looks really nice, and all, but...

Normally it would be unlikely Ford would LOWER the price in the future. However, with the 40% or more price hike in MSRP since the May 2021 announcement, I expect the demand frenzy is going to cool once all the people with money to burn have bought theirs. And when the Silverado is available, also announced with a $39k MSRP, there could be some price competition. My local Chevy dealer, also Ourisman, said they expect by the end of 2023, they will start to get inventory.

Also, when Ford ramps up production of the Lightning, the cost to produce could go down and the supply will increase, both things that generally lower the asking price of goods.

And if there is a recession, which some forecasters say may be likely, that will further depress demand presumably - not that I want a recession to happen of course.

So, like some others posting here, unless I win the lottery, I am going to pass on the invite.
I read somewhere that if I don't want to order now, I can wait for a future wave of invitations.

Sponsored

 

[luebri]

And when the Silverado is available, also announced with a $39k MSRP, there could be some price competition. My local Chevy dealer, also Ourisman, said they expect by the end of 2023, they will start to get inventory.

I'll eat my shoe if Chevy actually produces and sells the EV WT at $39k in any meaningful volume. They are (maybe) getting to market 18 months after the original PRO got to market. Costs have soared in that time.

Also, when Ford ramps up production of the Lightning, the cost to produce could go down and the supply will increase, both things that generally lower the asking price of goods.

I'll eat my other shoe if the MSRP prices go down. Maybe in a recession dealers will sell under MSRP again... maybe.

The primary reason for the price increases is the battery costs have increased at a higher rate than even the rapid inflation rate. If I had to guess they are still at below typical margins on the Lightning compared to F-Series ICE. The ramp up will likely only result in them clawing back at their margin %, not lowering sell price. See article linked below from Friday discussing the very topic of EV transition hurting the bottom line.

https://in.tradingview.com/news/seeking_alpha:7276ed676094b:0/

So, like some others posting here, unless I win the lottery, I am going to pass on the invite.
I read somewhere that if I don't want to order now, I can wait for a future wave of invitations.

Unless Ford changes their mind on this... I believe they have stated that by August of 2023 all reservations must be converted or they are gone. No more kicking the can down the road.

 

[Wsl346]

And when the Silverado is available, also announced with a $39k MSRP, there could be some price competition. My local Chevy dealer, also Ourisman, said they expect by the end of 2023, they will start to get inventory.

I’m fairly certain the Silverado coming out in 2023 is the >$100K First Edition and the normal Silverado comes out in 2024.

 

[chl]

I'll eat my shoe if Chevy actually produces and sells the EV WT at $39k in any meaningful volume. They are (maybe) getting to market 18 months after the original PRO got to market. Costs have soared in that time.



I'll eat my other shoe if the MSRP prices go down. Maybe in a recession dealers will sell under MSRP again... maybe.

The primary reason for the price increases is the battery costs have increased at a higher rate than even the rapid inflation rate. If I had to guess they are still at below typical margins on the Lightning compared to F-Series ICE. The ramp up will likely only result in them clawing back at their margin %, not lowering sell price. See article linked below from Friday discussing the very topic of EV transition hurting the bottom line.

https://in.tradingview.com/news/seeking_alpha:7276ed676094b:0/



Unless Ford changes their mind on this... I believe they have stated that by August of 2023 all reservations must be converted or they are gone. No more kicking the can down the road.

Yes, good points. I had to assume a lot of ifs to see the price go down.
If they don't sell and sit on the lot for too long is another reason,
Like I said I was surprised there were any '22s available.
Ford only made a limited number and there were so many reservations - what explains that?
The price increase? The dealer markups? Not the model people wanted (almost all Lariats)?

One dealer lowered their initial asking price - they had originally put a $10k ADM on one of their Lariats but lowered it to only $4k above MSRP, and the sales person sounded ready to go lower, on the phone anyway.

Battery production is ramping up, and with China stopping the COVID shutdowns, some supplu chain issues should go away - yes the new law makes trouble for the tax credit if too much of the battery is made in China.

I agree the most costly single thing in the EV's right now is the battery.

That's why some genius is going to see that they could sell a vehicle for less without the battery, and the owner could lease the battery which could be modular and swappable, such as the AMPLE business model.

The push in China, the single largest potential market for EV's, seems to be swappable batteries.

NIO has a battery swap business, and the one of the major makers of batteries for Tesla's does as well.

Obviously, Ford is headed in the other direction. But any pickup truck manufacturer could go the other way. Not that I have much faith in the big car companies in the US doing anything that smart.

They have been late to the game for EVs. I bought my Nissan Leaf in 2011.

And why was Ford so surprised at the demand for the Lightning?

Did they not see that by May of 2021, there were over 1 million reservations for the Tesla Cybertruck?

Duh.

I just can't see paying $70k for a pickup truck.

I could probably pay someone to convert my 2001 Ranger to EV for less.

How much of the Lightning price increase is really the costs and how much is taking advantage of the high demand?

Logically, if the battery costs are really the issue, then when the costs of producing the batteries comes down as production ramps up, then the MSRP should come down.

Also what is the strategy behind producing so many high-end models of the lightning and not the Pro? The Pro is 'sold out' for 2023. Huh?

If the Pro is sold out already, then it must be in high demand, so why not switch to making MORE Pro's instead of the other most expensive models? Because the profit margin is lower and Ford figures they can take advantage of the high demand to up-sell all us reservation holders.

From my experience, the ownership costs of an EV are way lower than an ICE.
Less work for the dealership mechanics because an EV is much simple mechanically.
I have had zero maintenance requirements on my Leaf, no oil changes needed, no transmission fluid changes, etc. Rotate the tires, add washer fluid, wash and wax, that's it. Oh, they did want me to have the battery checked once a year to maintain the 8 year battery warranty - but my local Nissan dealer comp'ed me the check - it was just hooking the car up to a battery testing apparatus and running a program, and printing out a report.

So I think maybe Ford decided to put the lost maintenance costs up front in the MSRP (and dealers in their markups) because you aren't going to be need parts and service to maintain your Lightning, unless you have an accident.

Anyway, time will tell.

Apparently having a reservation didn't really matter, because I found 10-20 Lightning available in stock at the local Ford dealers in the Va/DC/MD area. So if mine runs out, no problem.

c

 

[chl]

I’m fairly certain the Silverado coming out in 2023 is the >$100K First Edition and the normal Silverado comes out in 2024.

Could be. They'd sell a lot more if they were smart enough to put out the lower priced one first, but car CEO's seem to be some of the dumbest overpaid things on the planet.

 

[chl]

Just found a '23 Lightning Pro for sale in NJ, a bit far to travel for me, for $54,289.
However MSRP not shown.
It is listed as "in transit" not on the lot yet.

 

[luebri]

Could be. They'd sell a lot more if they were smart enough to put out the lower priced one first, but car CEO's seem to be some of the dumbest overpaid things on the planet.

It's not about units sold, it's about margin and bottom line. This is capitalism after all. The Silverado WT and the Lightning Pro are essentially loss leaders to get the marketing "Starting at price" in the headlines. Which is done to get people interested in the concept of an EV Truck. Then people get excited, but ultimately realize that getting the entry level truck is nearly impossible because of the constrained supply by Ford (and likely Chevy) because they dont want to sell a lot of lower margin (or no margin) trucks. They'd much rather sell the higher trim levels with higher profits so that is what they built. Other than pissing a few people off, the dollars and cents of it all make perfect sense.

Also, There will be no price break on the lightning "ramp up" for the battery. The ramp up cost benefit will be primarily efficiency of labor and maybe some amortizing of costs on other capital expenditures to get the lines built out. However the more batteries needed = the more battery material demand goes up = the higher EV prices go.

Until there are wholesale changes in battery tech, or EV demand plateaus due to price, the prices will rise. They will not go down. Sorry.

 

[chl]

It's not about units sold, it's about margin and bottom line. This is capitalism after all. The Silverado WT and the Lightning Pro are essentially loss leaders to get the marketing "Starting at price" in the headlines. Which is done to get people interested in the concept of an EV Truck. Then people get excited, but ultimately realize that getting the entry level truck is nearly impossible because of the constrained supply by Ford (and likely Chevy) because they dont want to sell a lot of lower margin (or no margin) trucks. They'd much rather sell the higher trim levels with higher profits so that is what they built. Other than pissing a few people off, the dollars and cents of it all make perfect sense.

Also, There will be no price break on the lightning "ramp up" for the battery. The ramp up cost benefit will be primarily efficiency of labor and maybe some amortizing of costs on other capital expenditures to get the lines built out. However the more batteries needed = the more battery material demand goes up = the higher EV prices go.

Until there are wholesale changes in battery tech, or EV demand plateaus due to price, the prices will rise. They will not go down. Sorry.

As for the margin point: if only Henry Ford had been as short-sighted and not produced the model-T, eh? Would Ford have been as successful and revolutionary?

I know WHY they do it - short-sighted focus on short term profits - doesn't make it smart though.
Opens them up to being out-competed by someone who gives the mass consumer market what they want in affordability.

Will Ford channel Henry Ford and give consumers an affordable EV truck? If not, who will step in to do it? @Ford Motor Company

"Ford cites the rising cost of raw materials, ongoing supply chain issues, and market factors as the reason for the price hike."

Raw materials are a commodity and commodity prices fluctuate.
As battery production ramps up, the commodity market has to get more efficient and scaled up both of which should reduce the costs of making batteries.
Economies of scale, ECON 101.

The ramp up of battery production will deal with some of 'supply chain' issues although chips may be part of that too.

The cost of shipping went up and therefore the cost of EV components went up because of oil/gas prices (ironic isn't it) but those fuel shipping costs have come down substantially recently.

For 'market factors' read high demand.

Demand curve: ECON 101. The demand curve determines how many units will be sold at a given price. The quantity demanded will decrease as the price increases - which is why there are unsold '22 Lightning sitting at dealerships right now.

The EV truck market is a growing market which also has an effect on the curve increasing the demand in effect.

So assuming improvement is economies of scale and supply chain issues, the question is will Ford pass along the reductions in the cost of production to the consumer?

And as competitors enter the market (assuming they don't collude to fix prices) will Ford see fit to produce more of the affordable models consumers will gobble up?

If things go as usual, Ford will miss the boat. Hope not. There seemed to be a change in perspective recently, but maybe it was smoke and mirrors?

c

 

[davehu]

with ADM's of $4k - $10K no one should be surprised that there are units on the lot. but I'll be they aren't there for long.

 

[luebri]

As for the margin point: if only Henry Ford had been as short-sighted and not produced the model-T, eh? Would Ford have been as successful and revolutionary?

I know WHY they do it - short-sighted focus on short term profits - doesn't make it smart though.
Opens them up to being out-competed by someone who gives the mass consumer market what they want in affordability.

Will Ford channel Henry Ford and give consumers an affordable EV truck? If not, who will step in to do it? @Ford Motor Company

"Ford cites the rising cost of raw materials, ongoing supply chain issues, and market factors as the reason for the price hike."

Raw materials are a commodity and commodity prices fluctuate.
As battery production ramps up, the commodity market has to get more efficient and scaled up both of which should reduce the costs of making batteries.
Economies of scale, ECON 101.

The ramp up of battery production will deal with some of 'supply chain' issues although chips may be part of that too.

The cost of shipping went up and therefore the cost of EV components went up because of oil/gas prices (ironic isn't it) but those fuel shipping costs have come down substantially recently.

For 'market factors' read high demand.

Demand curve: ECON 101. The demand curve determines how many units will be sold at a given price. The quantity demanded will decrease as the price increases - which is why there are unsold '22 Lightning sitting at dealerships right now.

The EV truck market is a growing market which also has an effect on the curve increasing the demand in effect.

So assuming improvement is economies of scale and supply chain issues, the question is will Ford pass along the reductions in the cost of production to the consumer?

And as competitors enter the market (assuming they don't collude to fix prices) will Ford see fit to produce more of the affordable models consumers will gobble up?

If things go as usual, Ford will miss the boat. Hope not. There seemed to be a change in perspective recently, but maybe it was smoke and mirrors?

c

I repeat. Until there are wholesale changes in battery tech, or EV demand plateaus due to price, the prices will rise. They will not go down. Sorry.

@ me when someone actually comes to market with a lower price EV truck at any meaningful volume. For your case, I hope Im wrong. I dont think I am.

 

[chl]

with ADM's of $4k - $10K no one should be surprised that there are units on the lot. but I'll be they aren't there for long.

Yes, there seems to be a feeding frenzy...that will cool down eventually. I can wait it out.

 

[BennyTheBeaver]

Battery production is ramping up, and with China stopping the COVID shutdowns, some supplu chain issues should go away - yes the new law makes trouble for the tax credit if too much of the battery is made in China.

I agree the most costly single thing in the EV's right now is the battery.

The issue is not production, it's the cost of material. Ramping up production doesn't solve the cost or sourcing of material.

 

[chl]

I repeat. Until there are wholesale changes in battery tech, or EV demand plateaus due to price, the prices will rise. They will not go down. Sorry.

@ me when someone actually comes to market with a lower price EV truck at any meaningful volume. For your case, I hope Im wrong. I dont think I am.

Seem like Chevy MAY BE going to do the smart thing if what they are saying comes to pass:

"...First out of the gate will be the Silverado EV Work Truck (WT), in the spring of 2023. Chevrolet says that, actually, only the version of the WT with the larger battery affording 400 miles of driving range will go on sale then. Later, a sub-400-mile Silverado EV WT that is promised to be the price leader of the lineup—ringing in at $41,595, per Chevy—will arrive.."

https://www.motortrend.com/news/2024-chevrolet-silverado-ev-pickup-truck-availability-timing/

I put in a reservation and talked to a salesperson. It maybe hurry up and slow down like with the Lightning, but I hope not...without a crystal ball who really knows?

And Ford is planning on cracking down on the ADMs eventually, seems like not until 2024 though.

A few of my local dealers are promising not to sell at MSRP for orders.
Today I talked to a local salesperson - they have a Pro that is a demo, 750 miles on it, that they are putting on sale next week, but for at least $20k over MSRP. He said it is not normal for his dealership to do that, but with the high demand, they are cashing in.

EV battery prices have been steadily going down since 2010 and before, until recently with the pandemic supply chain issues causing a spike in the raw materials costs, according to all the data I have seen.

So no offense but I think you're just wrong about where the prices are heading, once that is sorted out. That is, they should continue to become more affordable as they have been for the last 30 years (down 97%).

https://www.sustainabletruckvan.com/price-of-lithium-batteries-fall/

But anything can happen.

It reminds me of the Cabbage Patch Doll craze when my kids were young.

Ford got to market with the Lightning quickly, but I think they are going to miss an opportunity if they continue to limit manufacture of the Pro and XLT models. Even if the margins are smaller there, volume sales can make up for the lower margin. Unless they are selling them at a loss (loss leader). Even then, using a loss leader can be a good strategy to corner a market.

When I bought my 2012 Leaf, battery prices were much higher, so now, even with the supply chain issues, I could get a Leaf with twice the range for less money. But I was happy to have it even so, very reliable, no maintenance, really fun to drive, and even better when gasoline is over $4/gallon.

I think the $40k-$45 range is right for a basic EV pickup right now. And as batteries return to their declining price trend, the EV trucks should be able to compete in price with entry level ICE trucks, that is in the $21k-$25k range.

that's all

 

[chl]

The issue is not production, it's the cost of material. Ramping up production doesn't solve the cost or sourcing of material.

Yes, right, to me the raw material availability is part of the production capacity issue and the supply chain issues.

The raw material price spike has been a very recent problem since the pandemic hit.
It had the effect of slowing the downward price trend for EV battery production.

EV battery production capacity had been increasing before the pandemic.

So, once the production supply chain/raw materials availability gets back to normal prepandemic levels, production capacity should continue to increase and the upward pressure on battery prices should ease.

Eventually the EV battery prices should return to their steep downward trend.
The price trend has been down 97% in the last 30 years, so the statisticians say (Bloomberg).

Looking at the big picture, this recent price rise is the first time they have gone up since 2010.
It is part of the price inflation going on all around the globe in all sectors after the pandemic shutdown and reopening caused a surge in demand while production capacity, including mining of raw materials, is still down.

It will take time for the supply chain to get back to normal. How much time is hard to predict.

The increasing demand will tends to push prices higher. Supply chain issue resolution and increased production will tend to push prices down.
So it may take some time to sort out.

Some say the price spike could last 5-10 years. I hope it resolves sooner, otherwise EVs sales will suffer of course.

 

[chl]

On another related issue, I noted today the XLT order ability is gone on-line.
Now it is just Lariat and Platinum for MY23.

Sponsored