Ford increased the price of its all new F-150 Lightning recently. The increase across the model line averaged about $7,000. Ford said it needed this increase because of the rising costs of material needed to build EVs, particularly their batteries. What Ford also did was jeopardize the possibility that the Lightning could storm the pickup SUV market and position itself as the best selling vehicle in the market.
Ford’s additional plans to raise EV prices will hurt the sales of one of its most successful new products. The price of the Mustang Mach-E will jump between $3,000 and $8,000, according to a CNN analysis. The Ford public relations team did what they often do without shame. They buried the information in a press release that included the new colors that will be available in the 2023 model year. Ford management has clearly not put a check on this PR practice.
At the very end of the Mustang Mach-E release was a description of the price changes. “Ford is adjusting the MSRP on the Mustang Mach-E due to significant material cost increases, continued strain on key supply chains, and rapidly evolving market conditions, and will continue to monitor pricing across the model year.” It then listed the new prices.
The method of the announcement aside, the price increase will dent the overwhelming demand for the EV and help its competition This includes the Tesla Model Y, which has already been on the market for two and a half years. It has been highly popular among EV customers.
Ford is stuck in the vice of car price and demand. Keep prices low, and a model can lose money but sell well. Increase prices and undermine demand. Ford is not in an isolated situation. But, since it is in the critical stage of its EV launch, it is particularly vulnerable to the consequences of sharp price increases.
Ford wants to become the leader in the global EV market, as is the case with virtually every large manufacturer in the world. It has just made reaching that goal much more difficult. .
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