After struggling to find enough batteries and other components for the past two years, automakers are finally starting to turn out large numbers of electric cars and trucks. More than 30 new models will hit showrooms this year.
They need more customers now.
While sales of electric vehicles are growing — they rose about 48 percent in the second quarter from a year earlier — they haven’t risen as fast as the number of vehicles rolling off assembly lines. And inventories of unsold vehicles have started piling up.
More than 90,000 battery-powered cars and trucks are sitting on dealer lots, more than four times the number from a year ago, according to market research firm Cox Automotive. At the current rate of sales, it will last 103 days, compared to 50 days for the industry as a whole.
Manufacturers are having a “Field of Dreams” moment, said Jonathan Gregory, senior manager of economic and industry intelligence at Cox. “They’ve built EV inventory, but now they’re waiting for buyers to come in.”
Given this unbalanced supply and demand, automakers are cutting prices and offering more offers. On Monday, Ford Motor Company slashed prices on its F-150 Lightning electric pickup truck from $6,000 to nearly $10,000, or 17 percent on some versions. The company offers discount interest rates ranging from 1.9 percent to 3.9 percent on certain loans for Lightning Purchases.
The moves follow several rounds of price cuts by Tesla, the dominant seller of electric cars. Tesla’s price cuts prompted Ford to lower the price of its Mustang Mach-E electric sport utility vehicle, though it hasn’t brought Mach-E inventory back in line with sales.
At the end of June, Ford dealers had 16,400 of that model in stock — about 2,000 more than they sold in the first six months of the year.
Although many consumers have expressed interest in electric vehicles, they are often not ready to buy. Many people have been put off by the high prices of electric cars and are waiting for them to be no more expensive than comparable petrol models – something that could be accelerated by recent price cuts.
Other car buyers have concerns about how far these cars and trucks can travel on a full charge. Many models available now require recharging after 200 to 250 miles of travel. The uncertainty of finding charging stations and how long it takes to charge vehicles may put some off.
Glenn Stapp, a personal trainer in White Plains, NY, said he would like to buy a hybrid or fully electric car because of the potential environmental benefits and savings in fuel costs. But his 2014 Toyota Corolla won’t be on the market until Conks.
“My policy for owning cars is that I drive them until they are no longer serviceable,” he said. It won’t be for a few years; His Corolla has been driven and runs well under 100,000 miles.
Sales for high-priced luxury models, a segment of the market that includes the likes of Tesla, Mercedes-Benz, BMW, Porsche and Lucid Motors, have been particularly sluggish. Many of these cars cost between $75,000 and $160,000.
“I think there’s been a lot of hype about EVs and people have done their research and realized that these are premium vehicles and they’re not cheap,” said Rick Rickard, president of Rickard Automotive, which owns nine new car dealerships in Dublin. Ohio “And there is some retreat.”
For more than two months, Mr. F-150 Lightning Platinum truck has been on sale for $92,000 at his family’s Ford dealership. Richard said. “A year ago, it would have been sold by now,” he said.
Another group of electric vehicles struggling to find buyers is one that qualifies for a $7,500 federal tax credit under President Biden’s ambitious climate change law, the Inflation Reduction Act. Credit is available only for cars assembled in North America and includes a certain percentage of battery materials from that region or from US trading partners.
In addition to those restrictions, electric sedans must sell for $55,000 or less, and SUVs, pickup trucks and vans must sell for $80,000 or less.
Buying Ford’s Lightning trucks makes buyers eligible for a $7,500 credit, and the company plans to sell a lot of pickups in the coming months. The company temporarily halted production this year to upgrade its assembly line and increase production. By fall, the company expects its Rouge Electric Vehicle Center near Detroit to be able to crank out 150,000 Lightnings a year, tripling its current production capacity.
The company’s decision to cut prices may also have something to do with growing competition in the electric vehicle business. Tesla has begun production of its much-delayed Cybertruck pickup, and General Motors said on Saturday that it will soon begin offering an electric version of the Chevrolet Silverado truck.
Ford began production of the Lightning in the spring of 2022 and raised the price several times by $20,000 overall, citing rising costs of raw materials for its batteries. At the time, demand outstripped Ford’s production, and some dealers were charging thousands of dollars more than the company’s suggested retail price.
Shortly after the introduction of the F-150 Lightning, rapidly rising material costs, supply constraints and other factors drove up EV truck prices for Ford and our customers,” said Marin Gajaja, chief customer officer of the automaker’s electric vehicle division, in a statement. “Lower prices for our customers , we are constantly working in the background to reduce wait times and improve access.”
The company’s decision to cut prices worried investors who feared it would hurt Ford’s profits, sending its share price down 6 percent on Monday.
Ford said the Pro model of the F-150 Lightning is now $49,995, a $9,979 reduction. The XLT 312A model with extended battery is $8,879, reduced to $69,995. The top-of-the-line Platinum Extended model will sell for $91,995, or $6,079 less than last week’s price.
As a result of the price cuts, most Lightning models cost less than $80,000, making them eligible for a $7,500 federal tax credit.