After struggling to find enough batteries and other parts for the past couple of years, automakers are finally starting to bring out large numbers of electric cars and trucks. More than 30 new models are coming to showrooms this year.
What they need now is more customers.
While sales of electric vehicles are increasing — they climbed about 48 percent in the second quarter from a year earlier — they are not growing fast enough to keep pace with the number of vehicles rolling off assembly lines. And inventories of unsold vehicles are starting to pile up.
More than 90,000 battery-powered cars and trucks are sitting on dealership lots, four times as many as a year ago, according to Cox Automotive, a market research firm. That’s enough to last 103 days at the current rate of sales, compared to about 50 days for the industry as a whole.
Manufacturers “are having a ‘Field of Dreams’ moment,” said Jonathan Gregory, senior manager of financial and industry insights at Cox. “They’ve built EV stock, but now they’re waiting for buyers to come.”
In light of this unbalanced supply and demand, automakers are cutting prices and offering more incentives. On Monday, Ford Motor slashed prices on its F-150 Lightning electric pickup truck by $6,000 to nearly $10,000, or as much as 17 percent on some versions. The company also offers discounted interest rates of 1.9 percent to 3.9 percent on certain loans for Lightning purchases.
These moves follow several rounds of price cuts from Tesla, the dominant seller of electric cars. Tesla’s price cuts previously led Ford to lower prices on its Mustang Mach-E electric car, although that hasn’t brought Mach-E inventory back in line with sales.
By 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.
While many consumers express interest in electric cars, they are often not ready to make a purchase. Many people have been put off by the high prices of electric cars and are waiting for them to cost no more than comparable petrol models – something that could be accelerated by recent price cuts.
Other car buyers are concerned about how far these cars and trucks can travel on a full charge. Many models now available need to be recharged after driving 200 to 250 miles. Uncertainty about finding charging stations and how long it takes to charge the vehicles can deter some.
Glenn Staub, a personal trainer from White Plains, NY, said he wanted to buy a hybrid or all-electric car because of the potential environmental benefits and savings on fuel costs. But he won’t be on the market until his 2014 Toyota Corolla is ready.
“My policy for keeping cars is that I drive it until it can’t be serviced anymore,” he said. It may not be for a few years; His Corolla has been driven just under 100,000 miles and runs fine.
Sales have been particularly slow for high-priced luxury models – a segment of the market that has an abundance of options from the likes of Tesla, Mercedes-Benz, BMW, Porsche and Lucid Motors. Many of these cars cost $75,000 to $160,000.
“I think there was a lot of hype about electric cars and people did their research and realized these are premium vehicles and they’re not cheap,” said Rick Ricart, president of Ricart Automotive, which owns nine new car lines in Dublin. Ohio. “And there has been a pullback.”
Mr. Ricart said the family’s Ford store had a top-of-the-line F-150 Lightning Platinum truck for sale for $92,000 for more than two months. “A year ago it would have been sold by now,” he said.
Another group of electric vehicles struggling to find buyers are those that no longer qualify for a $7,500 federal tax credit under the Inflation Reduction Act, President Biden’s ambitious climate change law. The credit is only available on vehicles assembled in North America that include a certain percentage of battery materials from the region or from US trading partners.
In addition to these restrictions, electric sedans must sell for $55,000 or less to be eligible for credits, and SUVs, pickup trucks and vans must sell for $80,000 or less.
Purchases of Ford’s Lightning trucks make buyers eligible for the $7,500 credit, and the company plans to sell many more of the pickups in the coming months. The company temporarily halted production this year to upgrade the assembly line and increase production. By fall, the company expects the Rouge Electric Vehicle Center near Detroit to be able to produce 150,000 Lightnings a year, tripling current production capacity.
The company’s decision to lower prices may also have something to do with the increasing competition in the electric car industry. Tesla said Saturday it had begun production of its long-delayed Cybertruck pickup, and General Motors is expected soon to begin delivering an electric version of the Chevrolet Silverado truck.
Ford began making the Lightning in the spring of 2022 and raised prices several times by a total of about $20,000, citing rising raw material costs for the batteries. At the time, demand far exceeded Ford’s production, and some dealers were charging thousands of dollars more than the company’s suggested retail price.
“Shortly after the launch of the F-150 Lightning, rapidly increasing material costs, supply constraints and other factors drove up the cost of the electric vehicle for Ford and our customers,” said Marin Gjaja, chief customer officer for the automaker’s electric vehicle division. in a statement. “We have continued to work in the background to improve availability to reduce prices for our customers and shorten waiting times.”
The company’s decision to cut prices angered investors who feared it would hurt Ford’s profits, and the stock price fell 6 percent on Monday.
Ford said the Pro model of the F-150 Lightning now had a list price of $49,995, a reduction of $9,979. The XLT 312A model with an extended-range battery was cut by $8,879 to $69,995. The top-of-the-line Platinum model with extended range will sell for $91,995, or $6,079 less than last week’s price.
As a result of the price cuts, most Lightning models will cost less than $80,000, making them eligible for a $7,500 federal tax credit.