Everyone knew the $39k Lightning was as much of a fantasy as the $30k Model 3, and this markup puts them right in line with Tesla/Rivian. But now we get to wait another 5-10 years for an actually affordable EV work truck to be a thing. Unfortunately battery prices are going to keep EV's in the realm of rich person toys and second cars for years to come still.
Varies by where you are and how much you drive, especially in snowy conditions. But my experience is that most vehicles are better than that these days. You should be able to get to 10 years pretty reliably--and often 5+ years beyond before you start getting into expensive rust-related repairs. My prior SUV (a Ford) I definitely held onto about a year too long with a couple of expensive repairs associated with corroded fluids lines but that was almost a 20 year old vehicle in New England.
What parts usually rot out on ICE's and do they have equivalents on EV's? Getting rid of a large percentage of the moving parts seems like it might be a win (but I'm really not sure).
In my experience, frame/body (though that's better than it used to be). Fluid lines (brakes, power steering), muffler, other power train components [ADDED: Not so much powertrain itself but some of the associated hardware]. So some is common. Some is not. But presumably the motors in an EV could rust out as well.
Corrosion usually affects the body, the suspension, the exhaust, and bolts. The only thing the EV doesn't have is an exhaust system. And compared to the Model 3, which is mostly steel, there are some ICE cars which could do better - for example, the Ford F-150 has had a majority aluminum body for a few years now.
Regardless, this isn't a win for the EV column, it's not the powertrain that rots.
Rocker panels, wheel wells, fenders, cab corners. If that bodywork is rotted out on a modern unibody vehicle, it will fail safety inspections and has to be repaired.
Where does this myth come from? I grew up in Utah where the roads are basically made of salt for 6 months a year. There are old cars everywhere. I had two that lasted to 200k miles, and it wasn't rust that pushed them over the edge. Just wash your car and it'll be fine.
I'm not saying there's no affect at all, but suggesting the car will be unusable in 5 years (less than 100k on average) is an exaggeration bordering on dishonesty.
The 5 year thing is an exaggeration, but it definitely isn't a myth. The midwest and new england area gets a lot more snow than the western US outside small mountain towns. Also, the western US tends to use more environmentally friendly road salts that also don't cause as much corrosion as rock salt (NaCl). In the east, roads are heavily salted with rock salt and it is (or was common when I lived there) for cars to to be heavily rusted out 10 years in. People still drive those cars, but parts break more frequently.
When I moved to California in 2007, a local mechanic freaked out about all the rust on my 2001 car and advised me to sell it immediately. I kept that car and eventually sold it on to someone from the east coast who didn't see any issues.
Maine here. Not only do they sand and salt a ton, but I believe it is Calcium-Chloride that they spray down before storms are about to hit. Liquid, onto the roads. You should see cars following 10 ft behind them on the highway when this is being done... eeek.
You can literally hear it eating at your car if in a quiet place.
"Not too rusty" around here is... Well, you're familiar.
Decades ago my Canadian family had a Volvo that made it for nearly 20 years, and was a total rust bucket at the end of that time ;)
Somewhere near the end of that, a brand new Acura was bought. That made it through the next 20 years (on the same roads), and had next to no corrosion.
Look into the “salt belt”, and the references there regarding anti-lock brake and air bag sensor recalls only from these states: https://en.m.wikipedia.org/wiki/Salt_Belt
Note that the airbag recall included Utah, while the antilock brake probe did not. Also note that as mentioned, “other states such as … Utah are also considered part of the Salt Belt but use less corrosive substances.”
Did you exclusively drive on salted roads in Utah? There’s also the whole part of the state that is desert. I don’t think it compares to humid coastal states that also receive heavy snowfall and happen to include several huge metropolitan areas, with all the car commuting that entails.
My experience is that a large number of gas stations east of the Mississippi have an $8ish car wash that includes an underbody spray when you drive into the wash bay. Just get a few of those every winter, drive slowly when entering the wash bay, and never worry about corrosion.
Unfortunately 7 year and 8 year car loans are a thing and make expensive vehicles accessible to those with more meager incomes. They are terrible ideas though (for the consumer)
Another sign of the challenges of the dealer system. Ford took reservations, but then depends on dealers to close the sale, and they can increase the price.
For all their faults, Tesla held to their original pricing on S, X, and 3 for early reservations, even giving them free upgrades when the production model had higher specs than the original announcements. More recently, Tesla has hit some reservation holders with modest price increases, but not at over 50% of the base price of the vehicle like we're seeing here.
As I understand it, you pay the deposit to Ford first then you work with a dealer to finalize the sale. If all dealers are marking them up (they are) then your choice is to lose the deposit or pay a markup.
Edit: Actually it looks like the Ford deposit was $100 and refundable. This must be a separate dealer deposit. I am not sure if it comes before or after price agreement. Dealers are sketchy as hell so could be either.
No they did not. I recently tried to buy an id4 and was told by the dealer that there was a 5k markup from sticker price and no reservation system. They have a list of people they will call when a car gets to the dealership and the first to shore up in person will get it.
I just heard a story from a local guy who ordered a custom build Porsche, put down a sizeable deposit, waited six months, and then got the call that it was in at the dealership. When he went down there the next day to do the paperwork, they told him somebody that morning made them a cash offer and so they sold the car out from under him.
The guy told me this story as a way of warning me against ordered a car from this particular dealer. Problem is, the other Porsche dealer in the area I have heard different but just as terrible stories about. One was that they are selling cars as new that had already been put "in service" months ago, so if you bought from them without checking, you wouldn't get your full warranty period.
I've had plenty of terrible experiences with pretty much all local dealers I've dealt with, Audi, BMW, Ford, VW... dealers can get away with being terrible because they all are and there's nowhere to go.
Each state has a office that deals with and licenses dealerships. If he put down a deposit and had paperwork, it might be worth it to look them up. They can basically close down a dealership at will.
Too bad, totally different from my experience. I ordered and configured my car in the first early-adopter wave via the web form though so perhaps those were a better experience.
iirc, for a Mach-E reservation, Ford made you choose a local dealer as part of the process.
Anyone know how that played out? Were you locked into that dealer, and could they adjust the price?
The Mach-E $500 was refundable, like with Tesla. I'm reading that the Lightning deposit is $100, refundable. So the $5000 must be the step beyond that.
Yes you were locked in and yes they could adjust the price. I got around that by going through a dealer in the Costco network. I figured the full force of Costco would be enough to prevent shenanigans and it worked.
You're right that I should have talked to Costco about it. Unfortunately, I didn't have the patience for it at the time, I just bought the same car somewhere else.
Well, except for the LR reservation holders who were lead on and on that their vehicles were "about to enter production"... only to find it canceled, their place in the system lost, and Tesla barely able to say sorry, let alone offer an alternative.
> More recently, Tesla has hit some reservation holders with modest price increases, but not at over 50% of the base price of the vehicle like we're seeing here.
You mean _three_ price increases in 2021 alone that have bumped some Model 3 prices by about 30%? I'm not sure how "modest" an increase that is.
I agree that Tesla isn’t immune to the same mechanics of supply and demand that make dealerships do these markups, but I think it’s important to note that Tesla honors the price of the car from the time you placed the order. I ordered a Model 3 in October and the price of the car has increased since I placed that order, but I’ll still be paying the original price when I take delivery. I see that as a positive over what this article is saying, which is that the dealership hit reservation holders with a sudden markup, which probably wouldn’t have happened without the dealership as a middleman between Ford and the buyers.
> Tesla held to their original pricing on S, X, and 3 for early reservations,
That’s some serious rewriting of history, at least for Model 3.
Musk announced Model 3 at $35K price, took reservation money, and later announced that it will be a $45K Model 3 (or was it higher?).
The $35K Model 3 came much much later, after the Fed credit had ended, and I believe was only there for a short time (I stopped checking after the above bait and switch).
As the owner of the cheapest Tesla ever sold in the US, let me tell you my story. I placed a day 2 reservation for the $35,000 Tesla. It took over two years, but the final price I paid excluding destination was $36500 and I was eligible for the tax credit at 50% off (3500).
I can’t speak to Ford, but last year we order a Chrysler Pacifica plug-in hybrid direct from Chrysler, shipped to the dealer for pickup and we had no issues with dealership upsell. It was exactly what it said we were getting. We love it too. Probably put gas in every 2-3 months if we don’t go out of town.
Do you like the vehicle? We have a Town and Country and while I’m not a fan of the minivan life it’s just so damn practical with kids. The Pacifica seems more car like than our Town and Country (seems like it sits lower, maybe handles better). Looking into options, we use the Model 3 almost all the time but sometimes you need the extra luggage space or just ability to sit a little further away (separate the kids).
We love it. Have a 2020 and the plugin hybrid approach is similar to the Chevy Volt where the first 35 miles you drive everyday is all electric. For us, even driving into the next town everyday, that covers us.
The vehicle is great. Bells and whistles are solid. Really the only downside to it is that the battery sits in the space where you would have been able to fold down the middle row of seats. Instead, if you need to get the middle seats out of the way, you have to remove them and they are a little heavier than I expected.
Still though, the practicality can't be beat. When you fold down the back and remove the middle seats it's almost like having a covered pickup truck with as much as you can fit in there.
Thanks for the insight. To be honest I have almost never fully folded down the middle seats, since you have to move the front seats up, move the floor mats and then fold them in.
I wonder how Ford will combat this. I know they're limited as to what they can do due to state laws, but from what I've seen they're not a fan of high markups.
The bigger problem is that it appears that the dealerships have just done a big bait and switch, customers already preordered and if my research was correct - they basically said F* you to the customers that already pre ordered and said if you want it now - you have to pay more - or you lose your deposit.
The dealerships are more like a cartel because they're focused on keeping the cost of the product artificially inflated enough that they can scam their margin from inbetween the customer and the producer. Unions focus on keeping wages higher than they otherwise would be.
For example health insurance companies in the US fall into the same cartel category as automobile dealerships. They scam their margin / mark-up sitting - often with regulatory protection - inbetween the patient and the care provider (hospital etc) or producer (pharma company, device maker etc).
Calling that a deposit is stretching the definition - you're just paying a fee to skip ahead in line: a reservation. Suppose though it actually was a partial, non-refundable, advance payment of a yet-to-be-determined sum. Who in their right mind would sign such a contract? Those people should find someone else to manage their money for them ASAP.
What I would like to see is PS5's sold at market price by Sony, but the overage is donated to a charity of the buyer's choice.
It pushes the scalpers out of the game, which means there's less idle inventory, and the price can come down a little faster.
Another alternative is to sell at MSRP, but bind it to the buyer for a year. This means that it can be only be resold as a brick within a year, which is obviously unattractive to scalpers. To prevent scalpers selling a sale-sniping service, just take orders from qualified buyers anytime, then fill them randomly in e.g. a 7 day window. Within a week you either get a PS5 bound to you or a refund and a chance to try again.
You say scummy scalpers like it isn't every random person also doing it. Every time I've heard of someone coming across an extra one the last year they've had zero qualms about selling it for a profit. The only difference is that some people decide to do it more often.
As a sibling comment bored, there are ways to deal with this, but honestly other than selling them at market price or somehow making more, most options are limited, because that's just how the market works.
We're not talking about food or medicine here. It's a leisure machine.
I'm not going to begrudge someone making a couple hundred extra bucks because they got lucky. That money isn't coming from you or me, it's coming from Sony, who could be selling at that price but isn't because they want to manage customer expectations. PS5s cost the market price, and Sony happens to sell some at a steep discount, and some people make some money out of that. If Sony didn't sell at that discount, you'd still have to pay the same amount, but Sony would be getting the money, because the market demand and current supply is such that PS5s cost a lot of money.
One of the graphics card makers (PNY?) created an invitation system and would sell to randomly selected invites at MSRP. They stopped doing it, though -- I suspect they got flooded by scalpers adding immense numbers of email addresses into the "pool".
Defeating the scale part of the scalper attack means charging an entrance fee, or using some other "proof" that hard to get at scale (like a credit card number). I like the idea of a long-term refundable reservation fee (pay $25 to get on the lottery list via distinct credit card, and if it's not delivered in a year or two you get your money back).
Something like a Gamestop membership is somewhat useful as well, but I'd just really rather see the manufacturers adopt reservation systems.
Of course this is all just idle speculation. Lots of smart people (on both sides) have been thinking about this problem for a long time.
...at least one Ford dealership [...] informed them that an additional price adjustment of US$30,000 would be necessary in order to receive a unit from the first batches of Ford's new electric truck.
An additional non-refundable US$5,000 deposit is apparently also required to place an order for the electric pickup truck.
At ONE dealership, if you want a first batch its +$30K. If you wait, it isn't.
If you want to reserve one now it's $5000 down. That's not extra and you don't lose it if you take delivery.
I'm not a Ford fanboy, just saying.
And I wouldn't buy (let alone pay extra for) any first gen vehicle.
That's not gonna help, they're all sold out. It's part of a new crypto consensus algorithm called Proof of Transport (PoT). You need a mean truck to get the most rewards.
I doubt either of those strategies will yield results. The RAV4 Prime and Ford Focus RS are 2 examples of many of cars that pretty much were never available for MSRP except from a select few dealerships. I'm sure a couple people will respond and say, "wait but I got a Prime at MSRP so that invalidates your comment!" Nope, they just got lucky or were OK calling 20 dealerships to find one that wasn't OK ripping their customers off.
It's really hard to get any new car right now at MSRP and the dealers that let you place a deposit may pull it from under you if someone is willing to pay more
This kind of highlights a flaw in the dealership model, however. Ford took the reservation money and made a promise that they're unable to fulfill to the reservation holder.
Ford ought to let customers place reservations and shop around which dealership they want to purchase though at delivery time.
If the dealership tells me "It's $30,000 markup or we're taking your built-to-order vehicle and selling it to someone else" then I should be able to take that reservation and move my order to a different dealer.
Or maybe they could require the dealer to sign a contract on the final out the door price in order to submit an order.
> And I wouldn't buy (let alone pay extra for) any first gen vehicle.
I generally agree with this. I'm curious where you draw the line though. This isn't Ford's first EV and other manufacturers have been building them for years. At what point should we acknowledge this is as a mature technology? I wouldn't hesitate to buy a car with a new ICE, what will it take for EVs to reach the same level of trust?
Every so many years a new platform arrives. The generations built upon it iterate. The later iterations address issues and are considered superior. “The window seal on the driver side no longer potentially develops a leak, the headlight daytime running LED burnt out due to poor semiconductor fab you can see the new part number, the entertainment system revamped to support carplay” etc.
The down side is once they’re mature the body style changes and the cycle repeats.
I didn't read GP's comment as particular in any way to EVs. I'm not generally in the market for new cars (terrible value), but to the extent I consider them, I'd much rather buy a second-generation (or minimum, second model year) than a first-off car.
What do you mean by “generation” though? Take the Camry for example, that is a “new” car every ~8(?) years. That can’t be what you mean by “generation” so I assume you just mean “a few years after release”?
Anytime there’s a significant refresh of the model (when the Mustang got the Coyote motor, Corolla switched from rear to front drive, etc), I’d avoid the first year of that generation as well, but I’d particularly avoid the first year of a first-gen car.
My post above could have been much more clear. For a body refresh with an already proven engine/trans combination, I wouldn’t be as concerned (which is what I was trying to get at, albeit clumsily).
Not the commenter, but first gen vehicles have a particularly bad history of unreliability, even in ICEs. Later incremental model years tend to be the more reliable version of the car by a noticeable amount.
I don’t understand business rationale of not just returning the deposit to those who don’t want to pay the extra. Seems like a good way to burn basically all potential future customers while simultaneously pulling in more money than expected.
Maybe I’m kissing something? Are the dealers themselves paying more for the trucks?
Dealer's know about the sunk-cost fallacy. Very few people are going to walk away from that new truck that they were so enthusiastic about put down $5k to reserve it.
Dealerships are typically a low-margin business, and probably negative margin during the early part of the pandemic. An e-truck is probably going to last 10+ years and rarely go to the dealer service dept. (the high margin part of the business).
So if you ran a dealership, and you knew that the market price for this e-truck was much higher than MSRP, and you aren't going to make anything on the back-end with dealer service, and you've been starving for many months, what would you do? Leave the money on the table? Worry that your customer won't return sometime in the next 3-10 years, long after the sting of being forced to pay market price wears off?
> Dealer's know about the sunk-cost fallacy. Very few people are going to walk away from that new truck that they were so enthusiastic about put down $5k to reserve it.
> Dealerships are typically a low-margin business, and probably negative margin during the early part of the pandemic. An e-truck is probably going to last 10+ years and rarely go to the dealer service dept. (the high margin part of the business).
> So if you ran a dealership, and you knew that the market price for this e-truck was much higher than MSRP, and you aren't going to make anything on the back-end with dealer service, and you've been starving for many months, what would you do? Leave the money on the table? Worry that your customer won't return sometime in the next 3-10 years, long after the sting of being forced to pay market price wears off?
Feel free to clarify, but I find your post self-contradictory. If customers don't walk away, then the dealers gain _no_ money by doing this since the money goes to the purchase. They only gain money if customers pull out and leave the reservation money with the dealer. So if dealers believe that customers will view this as a sunk cost, the only rational thing for them to do is in fact to offer to return the money.
Then the dealer has to pay for the land, capital equipment, salaries, utilities, taxes, interest(*), etc. Profit is what is left after all these expenses are paid.
In most situations, the dealer borrows to buy the car and then pays interest on that debt while trying to sell the car.
> but if they didn't pocket it, many more would walk away.
You do realize that this would that customers do _not_ view it as a sunk cost right? Hence my original confusion. Also your statement here pretty directly contradicts what you wrote earlier:
> Very few people are going to walk away from that new truck that they were so enthusiastic about put down $5k to reserve it.
edit: Okay the more I think about it I can see sort how you're calling this a sunk cost. You mean it's a sunk cost in the sense that the dealer isn't letting them take the 5k back and that will keep some people in the game. That's not really my understanding of a normal sunk cost though. In this case the 5k comes out of the purchase price of the car meaning that someone who has put 5k down will actually pay (marginally) 5k less than who has not. So there is actual economic value in considering the 5k down payment in future decisions as opposed to sunk costs that are entirely lost.
In any case, I find it kind of insane to burn these customers like this when you have such a hot market. Instead just let people out if they want and increase the prices a little more if you want those 5k in your pocket. Killing your reputation for money you can get otherwise seems a bit silly when you realize that the market will someday turn around.
The article is unclear and comments seem contradictory: is it a price hike for new reservations or a bait and switch for old ones? The former would be merely sad, the latter should be illegal.
FWIW, my dealer is not adding any markup. Here is the email I received from them explaining the process:
"We finally received an update from Ford regarding the Lightning! This will be a completely unique process from Ford and they will send a detailed guideline in January, however I wanted to let you know in advance that things are in motion.
This process is going to be based on invitation to convert as demand has outweighed production capability by far. Due to demand, not all reservation holders will recieve an invitation to place an order for a 2022 model year. Ford will begin inviting reservation holders to place orders in waves starting in January. Subsequent waves will receive an invitation in two-week intervals until 2022 model year capacity is reached. Invitations are based on reservation timing, and our estimated allocation. You will be directed to an online configurator (Build and Price tool) where you will then be able to spec out your order and then submit your finalized order. At that time, we will provide you with complete pricing including MSRP, taxes, and dealer handling fee. We are not charging any dealer markup above MSRP. Once the 22MY production capacity is met, all remaining reservation holders will be notified that their next ordering opportunity will be for the next model year."
Sounds like you have a local dealer that's transparent and (relatively!) honest. From other posts it seems that Ford can't necessarily set the prices that the dealers charge...but what they can do is let dealers know that their allocations are at risk. In other words -- Ford can separately survey invitation receivers and find out what prices they pay. Excessive markups can be used to reduce allocations to dealers.
I can understand someone who needs a work truck but most of these trucks will be Vanity purchases, used to drive to Walmart or Chickfilet. Ford needs to mark it up across the board and any lost sales will be offset by large profit margins. Anyone buying a vehicle like this should be able to eat an additional 30-60k in markups.
If the cellular automata theory of class and status differentiation is true, electric vehicles are about to lose their caché. It will be interesting to observe.
When I was looking a Honda Accord a couple decades ago I walked into a dealer who was asking 3000 above MSRP in an Atlanta suburb. I asked him are you serious, dude didn’t even flinch and said bye as I walked out. I got the same car at MSRP with leather seats thrown in about 20 miles out of the city.
Some dealerships overcharge the customer because they think they can, and one should shop around because I was under the false assumption that all Honda dealers were equal. The civic was in high demand when I was buying it so inventories were low, but certainly not as low as now.
So this year they'll build around 700.000 normal F-150 trucks and only 15.000 electric ones, when they could sell many times more.
It seems they are out of touch with the market.
That may be understandable, as it is a bit nonsensical. 90% of the people who buy these trucks buy them as a status symbol: they are wasting resources, energy and emissions to signal they are active/outdoor types while driving to work and the mall. I read trucks do not count as part of manufacturer fuel efficiency targets, which is why they started marketing them to consumers in the first place. Buying an electric version of this still seems quite wasteful.
I hope people will think again and buy something right-sized.
Ford also released the hybrid Maverick with a starting price of 20k usd, which is much more right sized and extremely practical. It is attracting a lot of non traditional buyers who would likely never have considered the monstrosities that pass as 'full sized' nowadays.
I found this review by Demuro to be useful: https://youtu.be/ocHFC03Wmbw - it outlines the compromises they made, such as using the tried-and-true components from the Escape, focusing on function over shiny form, and making a well thought out design. I've priced one for myself a few times and the full msrp including destination charge was under 24k usd after the options that I added. The only reason I haven't ordered one yet is because of the nasty experience at dealers though there is at least one dealer in Iowa that is selling it for under invoice pricing, provided I fly there and drive it back.
These dealer markups in the chip shortage are insane. Went into a Kia dealership that had two Seltos on the lot. Prepared to pay sticker price of 24k even with bullshit delivery mark-up. Then they ran our credit and told us it would be 38k because they added bullshit mark-ups. We walked out the door.
Tesla shipped 1M vehicles in 2021. They are also about to open 2 more assembly lines.
Ford better play it's hand carefully. The F150 could be a winner, or it could be a quick flash in the pan (largely ignored, if other EV makers provide reasonable alternatives quickly.)
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[ 62.7 ms ] story [ 259 ms ] threadVaries by where you are and how much you drive, especially in snowy conditions. But my experience is that most vehicles are better than that these days. You should be able to get to 10 years pretty reliably--and often 5+ years beyond before you start getting into expensive rust-related repairs. My prior SUV (a Ford) I definitely held onto about a year too long with a couple of expensive repairs associated with corroded fluids lines but that was almost a 20 year old vehicle in New England.
Regardless, this isn't a win for the EV column, it's not the powertrain that rots.
I'm not saying there's no affect at all, but suggesting the car will be unusable in 5 years (less than 100k on average) is an exaggeration bordering on dishonesty.
When I moved to California in 2007, a local mechanic freaked out about all the rust on my 2001 car and advised me to sell it immediately. I kept that car and eventually sold it on to someone from the east coast who didn't see any issues.
You can literally hear it eating at your car if in a quiet place.
"Not too rusty" around here is... Well, you're familiar.
Somewhere near the end of that, a brand new Acura was bought. That made it through the next 20 years (on the same roads), and had next to no corrosion.
The manufacturers really did get a lot better!
Note that the airbag recall included Utah, while the antilock brake probe did not. Also note that as mentioned, “other states such as … Utah are also considered part of the Salt Belt but use less corrosive substances.”
Did you exclusively drive on salted roads in Utah? There’s also the whole part of the state that is desert. I don’t think it compares to humid coastal states that also receive heavy snowfall and happen to include several huge metropolitan areas, with all the car commuting that entails.
Unfortunately 7 year and 8 year car loans are a thing and make expensive vehicles accessible to those with more meager incomes. They are terrible ideas though (for the consumer)
For all their faults, Tesla held to their original pricing on S, X, and 3 for early reservations, even giving them free upgrades when the production model had higher specs than the original announcements. More recently, Tesla has hit some reservation holders with modest price increases, but not at over 50% of the base price of the vehicle like we're seeing here.
If a random dealership does this to me, I walk down the street to the other dealership and buy a car from them.
Edit: Actually it looks like the Ford deposit was $100 and refundable. This must be a separate dealer deposit. I am not sure if it comes before or after price agreement. Dealers are sketchy as hell so could be either.
There's four Ford dealerships within reasonable distance of me, they're all the same company.
I've had plenty of terrible experiences with pretty much all local dealers I've dealt with, Audi, BMW, Ford, VW... dealers can get away with being terrible because they all are and there's nowhere to go.
Or I just got lucky.
iirc, for a Mach-E reservation, Ford made you choose a local dealer as part of the process.
Anyone know how that played out? Were you locked into that dealer, and could they adjust the price?
The Mach-E $500 was refundable, like with Tesla. I'm reading that the Lightning deposit is $100, refundable. So the $5000 must be the step beyond that.
> More recently, Tesla has hit some reservation holders with modest price increases, but not at over 50% of the base price of the vehicle like we're seeing here.
You mean _three_ price increases in 2021 alone that have bumped some Model 3 prices by about 30%? I'm not sure how "modest" an increase that is.
That’s some serious rewriting of history, at least for Model 3. Musk announced Model 3 at $35K price, took reservation money, and later announced that it will be a $45K Model 3 (or was it higher?). The $35K Model 3 came much much later, after the Fed credit had ended, and I believe was only there for a short time (I stopped checking after the above bait and switch).
The vehicle is great. Bells and whistles are solid. Really the only downside to it is that the battery sits in the space where you would have been able to fold down the middle row of seats. Instead, if you need to get the middle seats out of the way, you have to remove them and they are a little heavier than I expected.
Still though, the practicality can't be beat. When you fold down the back and remove the middle seats it's almost like having a covered pickup truck with as much as you can fit in there.
The F series are popular trucks, and it would be great to see more EV adoption from truck drivers.
I think that will be heavily influenced by either a) reliability or b) accessible repairs with cheap parts.
Ford’s fuel trucks have essentially both today, but a botched EV rollout could leave customers with neither and price hikes aren’t a great sign.
this video sums it up: https://www.youtube.com/watch?v=Pil6tB6MPws
FTFY
For example health insurance companies in the US fall into the same cartel category as automobile dealerships. They scam their margin / mark-up sitting - often with regulatory protection - inbetween the patient and the care provider (hospital etc) or producer (pharma company, device maker etc).
Calling that a deposit is stretching the definition - you're just paying a fee to skip ahead in line: a reservation. Suppose though it actually was a partial, non-refundable, advance payment of a yet-to-be-determined sum. Who in their right mind would sign such a contract? Those people should find someone else to manage their money for them ASAP.
And those are usually not much of a surprise in price generation over generation without something being radically new
It pushes the scalpers out of the game, which means there's less idle inventory, and the price can come down a little faster.
Another alternative is to sell at MSRP, but bind it to the buyer for a year. This means that it can be only be resold as a brick within a year, which is obviously unattractive to scalpers. To prevent scalpers selling a sale-sniping service, just take orders from qualified buyers anytime, then fill them randomly in e.g. a 7 day window. Within a week you either get a PS5 bound to you or a refund and a chance to try again.
I like your idea about the fluidity of market rate with something being done good with the amount above x price
As a sibling comment bored, there are ways to deal with this, but honestly other than selling them at market price or somehow making more, most options are limited, because that's just how the market works.
I'm not going to begrudge someone making a couple hundred extra bucks because they got lucky. That money isn't coming from you or me, it's coming from Sony, who could be selling at that price but isn't because they want to manage customer expectations. PS5s cost the market price, and Sony happens to sell some at a steep discount, and some people make some money out of that. If Sony didn't sell at that discount, you'd still have to pay the same amount, but Sony would be getting the money, because the market demand and current supply is such that PS5s cost a lot of money.
Defeating the scale part of the scalper attack means charging an entrance fee, or using some other "proof" that hard to get at scale (like a credit card number). I like the idea of a long-term refundable reservation fee (pay $25 to get on the lottery list via distinct credit card, and if it's not delivered in a year or two you get your money back).
Something like a Gamestop membership is somewhat useful as well, but I'd just really rather see the manufacturers adopt reservation systems.
Of course this is all just idle speculation. Lots of smart people (on both sides) have been thinking about this problem for a long time.
An additional non-refundable US$5,000 deposit is apparently also required to place an order for the electric pickup truck.
At ONE dealership, if you want a first batch its +$30K. If you wait, it isn't.
If you want to reserve one now it's $5000 down. That's not extra and you don't lose it if you take delivery.
I'm not a Ford fanboy, just saying.
And I wouldn't buy (let alone pay extra for) any first gen vehicle.
:-)
If the dealership tells me "It's $30,000 markup or we're taking your built-to-order vehicle and selling it to someone else" then I should be able to take that reservation and move my order to a different dealer.
Or maybe they could require the dealer to sign a contract on the final out the door price in order to submit an order.
Buy a car for 45k? Sure, dealer can deliver it at any markup you want. But, we will also drop it off at your house for exactly 45k. So not much room..
I generally agree with this. I'm curious where you draw the line though. This isn't Ford's first EV and other manufacturers have been building them for years. At what point should we acknowledge this is as a mature technology? I wouldn't hesitate to buy a car with a new ICE, what will it take for EVs to reach the same level of trust?
The down side is once they’re mature the body style changes and the cycle repeats.
My post above could have been much more clear. For a body refresh with an already proven engine/trans combination, I wouldn’t be as concerned (which is what I was trying to get at, albeit clumsily).
Maybe I’m kissing something? Are the dealers themselves paying more for the trucks?
Dealerships are typically a low-margin business, and probably negative margin during the early part of the pandemic. An e-truck is probably going to last 10+ years and rarely go to the dealer service dept. (the high margin part of the business).
So if you ran a dealership, and you knew that the market price for this e-truck was much higher than MSRP, and you aren't going to make anything on the back-end with dealer service, and you've been starving for many months, what would you do? Leave the money on the table? Worry that your customer won't return sometime in the next 3-10 years, long after the sting of being forced to pay market price wears off?
> Dealerships are typically a low-margin business, and probably negative margin during the early part of the pandemic. An e-truck is probably going to last 10+ years and rarely go to the dealer service dept. (the high margin part of the business).
> So if you ran a dealership, and you knew that the market price for this e-truck was much higher than MSRP, and you aren't going to make anything on the back-end with dealer service, and you've been starving for many months, what would you do? Leave the money on the table? Worry that your customer won't return sometime in the next 3-10 years, long after the sting of being forced to pay market price wears off?
Feel free to clarify, but I find your post self-contradictory. If customers don't walk away, then the dealers gain _no_ money by doing this since the money goes to the purchase. They only gain money if customers pull out and leave the reservation money with the dealer. So if dealers believe that customers will view this as a sunk cost, the only rational thing for them to do is in fact to offer to return the money.
So yes, they only pocket the $5k if they walk away, but if they didn't pocket it, many more would walk away.
And the economics above show why the dealer doesn't care if some customers don't come back.
Then the dealer has to pay for the land, capital equipment, salaries, utilities, taxes, interest(*), etc. Profit is what is left after all these expenses are paid.
In most situations, the dealer borrows to buy the car and then pays interest on that debt while trying to sell the car.
You do realize that this would that customers do _not_ view it as a sunk cost right? Hence my original confusion. Also your statement here pretty directly contradicts what you wrote earlier:
> Very few people are going to walk away from that new truck that they were so enthusiastic about put down $5k to reserve it.
edit: Okay the more I think about it I can see sort how you're calling this a sunk cost. You mean it's a sunk cost in the sense that the dealer isn't letting them take the 5k back and that will keep some people in the game. That's not really my understanding of a normal sunk cost though. In this case the 5k comes out of the purchase price of the car meaning that someone who has put 5k down will actually pay (marginally) 5k less than who has not. So there is actual economic value in considering the 5k down payment in future decisions as opposed to sunk costs that are entirely lost.
In any case, I find it kind of insane to burn these customers like this when you have such a hot market. Instead just let people out if they want and increase the prices a little more if you want those 5k in your pocket. Killing your reputation for money you can get otherwise seems a bit silly when you realize that the market will someday turn around.
"We finally received an update from Ford regarding the Lightning! This will be a completely unique process from Ford and they will send a detailed guideline in January, however I wanted to let you know in advance that things are in motion.
This process is going to be based on invitation to convert as demand has outweighed production capability by far. Due to demand, not all reservation holders will recieve an invitation to place an order for a 2022 model year. Ford will begin inviting reservation holders to place orders in waves starting in January. Subsequent waves will receive an invitation in two-week intervals until 2022 model year capacity is reached. Invitations are based on reservation timing, and our estimated allocation. You will be directed to an online configurator (Build and Price tool) where you will then be able to spec out your order and then submit your finalized order. At that time, we will provide you with complete pricing including MSRP, taxes, and dealer handling fee. We are not charging any dealer markup above MSRP. Once the 22MY production capacity is met, all remaining reservation holders will be notified that their next ordering opportunity will be for the next model year."
Still a bit ominous.
It seems they are out of touch with the market.
That may be understandable, as it is a bit nonsensical. 90% of the people who buy these trucks buy them as a status symbol: they are wasting resources, energy and emissions to signal they are active/outdoor types while driving to work and the mall. I read trucks do not count as part of manufacturer fuel efficiency targets, which is why they started marketing them to consumers in the first place. Buying an electric version of this still seems quite wasteful.
I hope people will think again and buy something right-sized.
Ford better play it's hand carefully. The F150 could be a winner, or it could be a quick flash in the pan (largely ignored, if other EV makers provide reasonable alternatives quickly.)