- Ford’s CFO, John Lawler, says he’s worried about inventory piling up on dealer lots.
- He stressed the need for diligent careful progress throughout the rest of the year.
- His comments appear to indicate that additional EV price cuts could be coming.
The automotive industry is slowly but surely coming back to earth after several strange years. In terms of pricing, that’s great for consumers but in terms of dealer inventory, it’s not so great. Now, the CFO of Ford, John Lawler, admits that increased supply sitting on dealer lots worries him and that additional price cuts might be due in the near future.
Lawler made his comments at the Deutsche Bank 2024 Global Auto Industry Conference, per The Detroit News. It’s there that he addressed recent trends. “It worries me that the stocks are building… We haven’t seen that impact so far, but we are watching it very closely.” To a degree, it’s no surprise that some stock is piling up.
Read: Most Americans Aren’t Sold On EVs, Blame Charging Woes, Range, And High Costs
Interest rates are still very high and while some prices are coming down, others aren’t dropping as quickly. Ford’s gas-powered vehicles are selling well and saw an 11 percent sales increase year-over-year in May. Nevertheless, Ford (and by extension other automakers) have to proceed carefully.
“So far the consumer has held up pretty well. Pricing has held up,” Lawler said. “We’re at a point in the industry where we need to be very thoughtful about how we proceed from here and watch our production relative to supply very closely and the stocks on the ground at the dealers.”
On the other hand, electric vehicles aren’t selling as well. The solution might be more incentives, despite Ford already slashing prices of its Model e electric division by over 20%, as reported by the CFO.
“When you look at this year, we’re going to continue to have cost reductions,” Lawler said. “And for Model e, the question is: Is the pricing going to stabilize, or are we going to continue to see downward pressure on the top line? So, we plan for additional price compression in the e segment through the rest of this year.”
That’s big news considering that the Blue Oval has already dropped prices and increased incentives on some of its EVs. It’s worked too. When Ford slashed prices of the Mustang Mach-E for example, sales skyrocketed – which shows that many new car buyers are ready to jump on the EV bandwagon, provided that they can afford to.
