Ford's second-quarter sales results were presented last week as a triumph, with the tagline "Ford EV sales gain momentum." Ford's data shows that EV sales have shrunk in the quarter by 2.8 percent. In the meantime, industry insiders reveal that dealerships have lots filled with Mustang Mach-Es and don't accept new allocations, forcing the Blue Oval to get creative. Other carmakers face similar issues as dealers try to deter buyers from considering electric vehicles.
Corporate communication is something to marvel at, considering how half-truths are used to paint a rosy picture of what is, essentially, a disaster. They don't call people in the industry "spin doctors" for nothing. Ford's second-quarter results are a great example of what can be done when you put your mind to it. Reading the press release, you will understand that Ford did brilliantly in ramping up EV production, sales of electric vehicles are growing, and all the charts are through the roof. Going deeper into Ford's own data shows that things are not looking good, and EV sales are actually down for the quarter.
"Ford EV sales gain momentum," reads the tagline, as Ford explains that "the F-150 Lightning and Mustang Mach-E achieved higher sales through stronger inventory." The first warning sign comes when Andrew Frick, Ford's VP of sales, announces that Mach-E sales climbed 110 percent in June. What happened to the second quarter, then? The same stands for the overall EV sales, as Frick tells us they were up 35.5 percent in June.
Yet, despite the good news, the table at the bottom of the release shows that sales of electric vehicles actually dipped by 2.8 percent in the second quarter compared to 2022. The Q2 result is even worse, considering that the F-150 Lightning only started deliveries at the end of May 2022. This makes the 118.7% YoY increase in the second quarter lose significance. It tells us that Ford sold twice as much in the second quarter this year as in June 2022, which is not that much after all. The disappointing result is baffling, considering that it comes at a time when the EV market is booming thanks to the IRA tax credits.
Photo: Ford
Another piece of information questions even the Mustang Mach-E result. Industry insiders claim that dealership lots are filled with Mustang Mach-E to the point that dealers refuse new allocations. That's when Ford started filling overflow lots with Mustang Mach-Es, as revealed by pictures taken by people in Southern California. It also found a creative way to get rid of the cars, as shown in a Ford press release about a "flexible lease pilot" with Uber. Not surprisingly, the release is dated June 1, just in time to help Ford achieve that 110% Mach-E increase in June.
The Ford Drive program allowed Uber drivers to lease a Mustang Mach-E for "customized time periods." That means between one- and four-month increments, depending on location. The program launched in San Diego, San Francisco, and Los Angeles, with the latter being the first to get Ford vehicles. This helped Ford report a Mustang Mach-E sales increase in June, although it might not get away with it the next quarter.
All legacy carmakers struggle to sell EVs
The truth is that the situation is not limited to Ford but possibly all legacy carmakers. A recent Cox Automotive survey showed that EV inventory climbed to 92 days in the second quarter, up from 36 days a year earlier. This indicates that although production increased, sales are actually down for everyone except Tesla. This indicates that although production increased, sales are actually down for everyone except Tesla. The unfair selling practices, such as dealer markups, may have deterred buyers from considering an electric vehicle. Dealers are also less likely to recommend an EV when maintenance costs are almost non-existent, making it difficult to make money on servicing.
Volkswagen blamed this on "strong customer reluctance" and announced slashing output at its main EV factory in Germany. According to the Cox Automotive research, Genesis, the Korean luxury brand, sold only 18 Electrified G80 sedans in June while holding 210 in stock nationwide, a 350-day supply. Luxury models like Audi's Q4 e-tron and Audi Q8 e-tron have over 100 days of unsold inventory. Sales of imported EVs and those too expensive to be ineligible for the IRA tax credit are significantly affected.
For the Ford Mustang Mach-E, the problem is not the IRA program. According to the Department of Energy, Mustang Mach-E buyers can apply for a $3,750 tax credit. One reason Ford's electric crossover doesn't sell is Tesla's price-cutting strategy. Ford dealers hold a 117-day supply, well above the overall EV inventory. While Ford says this is because it ramped up production in anticipation of more robust third-quarter sales, things don't look good for the Blue Oval. Three months from now, we'll know the truth.
Some publications citing Cox Automotive's study imply that customers don't want to buy electric vehicles, which couldn't be further from the truth. The study shows that there's a disconnect between US buyers and dealers. More than half of people surveyed by Cox Automotive said they would consider an EV purchase in the next 12 months. At the same time, less than a third of the 152 dealers surveyed believe the EVs are the future and will replace gasoline vehicles.
After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions. Full profile
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