Ford Mach-E. Source: Ford
Ford has posted disappointing sales numbers for its electric vehicle division for the month of May with its flagship Mustang Mach-E down 44% year on year. Ford sold just 2,917 units of the Mach-E in May, down from 5,179 in May 2022.
Including E-Transit and F-150 lightning, Ford sold a total 5,444 electric vehicles in the month of May, translating into an annualised sales rate of just 65,300.
According to Ford Authority, a website dedicated to Ford news, the company produced 11,858 Ford Mach-E crossovers in April and produced 19,599 Mach-Es in the first four months of 2023, meaning the drop in sales isn’t caused by a supply constraint but rather demand issues.
This is highly concerning for the company as EV demand is outstripping supply around the world. If Ford is only selling a fraction of the EVs it makes then the company potentially has some serious issues to deal with.
In a press release in March, Ford stated that it would reach an annualised production rate of 210,000 Mach-Es by the end of 2023. At an annualised rate the May sales figures mean Ford is currently selling just 35,000 units of the Mach-E per year or just 17% of the company’s 2023 annual production target.
Ford has already cut the price of its Mach-E over the last 12 months. Ford started taking orders for the Mach-E in Australia last month with the first cars expected to hit dealerships later this year with an estimated drive away price of $A83,583.
With the Tesla Model Y RWD over $A10,000 cheaper at $A72,201, it will be interesting to see how the Mach-E fairs in the Australian market against the world’s best selling car.
Ford Mach-E Australian pricing. Source: Ford
The figures for the F-150 Lightning don’t look good either.
Ford sold just 1,707 Lightning pickups in May, up from 201 in its inaugural sales month in May last year. But in March the company said it would reach an annualised production rate of 150,000 units of the electric pickup by the end of 2023. At that rate it will need to increase its sales to 12,500 per month, seven times more than current sales numbers.
Long term production targets irrelevant if Ford can’t sell EVs
Ford has recently made some bold claims around its future EV production growth of which many analysts have been sceptical. The company says it will produce 2 million EVs per year by the end of 2026, a production growth rate more than double that achieved by Tesla.
Speaking at Ford’s Capital Markets Day last month, CEO Jim Farley laid out Ford’s EV strategy which included big changes to the company’s business model.
“Now all this is on building an industrial machine that can produce 2 million EVs a year and just a few years from now,” said Farley.
During Ford’s earnings call last month Morgan Stanley analyst Adam Jonas seemed skeptical.
“I just get a little nervous with the 2 million unit capacity target that you have hanging out there for the second half of 2026, which, just in my opinion is a crazy high number.” said Jonas.
Ford has set some lofty goals for scaling its EV production. Tesla CEO Elon Musk has also praised Ford’s approach to splitting off its EV business and restructuring its distribution with a new direct to consumer model.
Ford’s strong ambitions and new business model are good to see however if the company can’t do something to increase its EV sales it has a big problem on its hands.
Keyword: Electric Ford Mustangs have a demand problem as Mach-E sales slump 44 pct