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Recent Ford EV Price Cuts Cost Automaker $300 Million

Following Tesla’s decision to slash the prices of both the Model 3 and Model Y over the past several months, Ford followed suit with its existing EV lineup, too. In fact, with inventory of leftover 2023 models building, the Ford Mustang Mach-E received some substantial price cuts back in February, which was also true of the Ford F-150 Lightning earlier this month – moves that were coupled with special lease deals and even an incentive targeted specifically at Tesla owners. However, as one might imagine, those Ford EV price cuts wound up costing the automaker a substantial amount of money, as CFO John Lawler explained during the company’s Q1 2024 earnings call with investors.

2024 Ford F-150 Lightning Flash - Exterior 003 - Rear Three Quarters

“When you look at the average selling price, with the math, it’s difficult because of the quarter,” Lawler said. “So we had quite a few units in stock. And as we saw the competitive pricing in the industry come down, we took our prices down, too. So then we had to take the prices down of all units in stock equally, and that was about $300 million of impact there. So when you look at the tenth of revenue for the quarter for Model e, you need to add that $300 million in, if you want to do the math based on the wholesales in the quarter.”

This news doesn’t come as a huge surprise, necessarily, given the fact that the Ford Model e division has thus far struggled to turn a profit, though it’s expected to reach that point in the coming months. The issue pertains to the high costs of building EVs these days, which leaves little room for profit – particularly when the competition is pricing their EVs at a lower rate.

Regardless, pricing remains a major sticking point for new vehicle shoppers, and a large disparity between traditional ICE models and pure EVs is also a big barrier standing in the way of more widespread adoption. Ford CEO Jim Farley has acknowledged this fact several times in the past, though forthcoming second-generation models are expected to significantly reduce costs and help drive prices down.

We’ll have more on these Ford EV price cuts soon, so be sure and subscribe to Ford Authority for 24/7 Ford news coverage.

Brett's lost track of all the Fords he's owned over the years and how much he's spent modifying them, but his current money pits include an S550 Mustang and 13th gen F-150.

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Comments

  1. Dave

    Price is definitely a huge sticking point, especially after FJB’s inflation reduction act has reduced the amount of money we all have to spend and skyrocketed inflation. Most EV’ don’t qualify for the federal tax credit because of all the hoops the liberals have put up. Bit look at the bright side , we get to pay for others college debt now also.

    Reply
    1. George

      Amen!

      Reply
  2. William

    And EVs still won’t sell due to the grassroots boycott against EVs. Consumer Reports recently rated EVs as less reliable and more problematic than ICE vehicles. NY Times also stated recently that Americans don’t want EVs.

    Reply
  3. Barbara Ganson

    I love my Ford Mach-E. It is a fabulous car. Best car ever.

    Reply

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