Ford Shifts Gears and Revamps EV Pricing Strategy Amid Weak Demand

Ford is revamping the invoice prices for its electric vehicle (EV) lineup, which includes the Mustang Mach-E, F-150 Lightning, and E-Transit. The change, which is a significant shift from its previous pricing strategy, is set to take effect on February 9th, reintroduces the concept of dealer holdback and alters advertising rules, potentially affecting the final prices consumers pay for these vehicles.

Since the launch of the Mustang Mach-E in 2019, Ford had maintained a pricing policy where the EV invoice prices were identical to their Manufacturer’s Suggested Retail Prices (MSRPs). This model aimed to offer consumers transparent, upfront pricing. However, this is now undergoing a substantial revision.

A notable change is the reintroduction of dealer holdback—a traditional aspect of car pricing absent in Ford’s initial EV strategy. Dealer holdback is essentially a set percentage of the MSRP, typically withheld by the manufacturer to assist dealers in offering discounts. With the upcoming changes, first reported by CarsDirect, Ford’s EVs will see a dealer holdback of 2% of the MSRP. This reintroduction is particularly significant as it creates opportunities for dealers to negotiate prices more flexibly, potentially leading to lower costs for consumers.

Another important aspect of the new pricing structure is the inclusion of additional incentives and allowances. For the Mustang Mach-E, Ford will offer a 1.5% Delivery Allowance, while the F-150 Lightning and E-Transit will receive a slightly higher allowance of 2.5%. Additionally, there’s a Model e Commitment Program providing 1% on the Mach-E and 1.5% on the other two models, contingent upon dealers meeting specific EV program standards set by Ford. These incentives are designed to make these vehicles more attractive to both dealers and consumers.

Furthermore, the revised invoice structure will incorporate an advertising fee allowance—0.5% of the MSRP for the Mach-E and 1% for the Lightning and E-Transit. This adjustment reflects Ford’s new stance on advertising, particularly the late December decision allowing dealers to advertise the Mach-E below its MSRP, a practice previously not allowed.

This overhaul in pricing strategy comes as Ford is experiencing weak demand for its EVs. The Detroit-based automaker has cut F-150 Lightning production in half for 2024, while at the same time delaying more than $12 billion in EV related investments.

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