Since the $7,500 EV incentive in the Inflation Reduction Act last August, Ford hiked the Lightning’s price by $16,000.
By wolf richter For wolf street,
I warned you about over a year ago, when an earlier version of the EV incentive was being pushed in Congress: You don’t subsidize a product that’s already in red-hot demand with little or no supply, large waiting lists and long sell-out times with. You’re not making this product cheaper for consumers, you’re making it more expensive because automakers will immediately raise prices to swallow all those incentives and some, and that’s exactly what’s happening now, and it’s inflationary. That’s going to add to the pressures and create more headaches for the Fed and the economy.
Ford, which makes one of two EV pickups in the US market, announced a third price increase for its electric F-150 Lightning, bringing the total price increase since its introduction to $16,000, or 40%. Inflation has come, thanks Congress.
Ford raised the price of the base version of the F-150 Lightning by $4,000, or another 8%, to “start at $55,974”. plus destination and delivery charges.
Back in May 2021, before Congress passed the EV incentive, Ford originally priced the base version of the Lightning at $39,974. plus destination and delivery charges.
Then Congress comes along with the Profit Enhancement Act.,
In August 2022—just as Congress was passing the “Inflation Reduction Act”, which included all kinds of incentives, including a $7,500 subsidy for EVs, to fuel even more inflation and enrich corporate America—Ford Raised the Lightning’s price by $7,000 to $46,974, eating up nearly all EV subsidies in one gulp. So inflation got worse LOL.
Then a few months later, in early October 2022, Ford hiked the Lightning’s price by another $5,000 to $51,974, laughing even louder about EV subsidies,
Then a few months later, meaning now, Ford is up by $4,000 to $55,974. Plus destination and delivery charges of $1,895, for a total MSRP of $57,869. For the cheapest version.
During the price-hike period, destination and delivery fees were also increased by approximately $200.
Ford also hiked the prices of its Mustang Mach E SUV in August 2022, passing on $7,500 in incentives ranging from $3,000 to $8,000 depending on trim.
Tesla hikes its US prices by $2,000 to $6000 in June 2022
I’ve been ranting about EV incentives for a while,
prices go up because they can do Go up. If competition and a buyer strike by consumers don’t allow prices to rise, prices don’t rise, and if automakers try to raise prices anyway, sales fall, and suddenly supply increases. Increases range, which also reduces cost. This is how inflation ends.
But today that is not the case. Today there is red hot inflation, red hot demand for EVs, already overstimulated consumers, who are now receiving $7,500 from the federal government and more than state governments to buy EVs, and a shortage already in place for EVs. Only increasing the hot demand. Competition and very limited supply.
When there is strong demand, little or no competition, limited supply, and now plenty of incentives to heat up demand amid a rising inflationary mindset where enough consumers will pay just about anything, well then whatever the manufacturer Let’s charge
If you want to encourage a new technology to continue, that’s fine. But EVs are the hottest product now, with huge demand, massive amounts of enthusiasm, long waiting lists, sold-out production runs and very little supply.
In September 2021 when an earlier version of the EV incentives were kicked off in Congress, I said.,
“Picking on government stimulus through tax credits on an already red-hot industry, which is already planning to invest hundreds of billions of dollars to compete and bring down EV prices, will drive new vehicles.” Chasing “no matter what between the red-hot demand of over-stimulated consumers. Price, between red-hot inflation and historic inventory shortages” is a “thoroughly mindless economic policy”.
If you’re on Corporate America’s payroll don’t be brainwashed because this bill, like so many other bills going back in the eons, is turning into a glorious Corporate-America-enrichment bill, as they show price increases.
Competition will bring down prices, incentives will not. And low prices stimulate demand. Incentives are driving price increases and profit margins. Heat Inflation? High Interest Rates? Don’t worry, to bring down inflation, Congress is throwing more fuel at it, LOL.
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