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Since August’s $7,500 EV incentives in the Inflation Reduction Act, Ford has raised the Lightning’s price by $16,000.
By Wolf Richter for WOLF STREET.
I warned about this more than a year ago, when an earlier version of EV incentives was being pushed through Congress: You don’t subsidize a product that’s already in hot demand with little or no supply, with huge inventories of waiting for a long time. sold-out production run. You’re not making this product cheaper for consumers, you’re just making it more expensive because automakers will immediately raise prices to swallow all the incentives and then some, and that’s exactly what’s happening now, and it will further fuel inflationary pressures. and cause more headaches for the Fed and the economy.
Ford, which builds one of two EV pickups in the US market, has 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 here we come, thank you, Congress.
Ford raised the price of the base version of the F-150 Lightning by another $4,000, or by another 8% to a “starting at” $55,974. Plus destination and delivery charges.
In May 2021, before Congress passed EV incentives, Ford originally priced the base version of the Lightning at $39,974. Plus destination and delivery charges.
Then comes Congress with the Profit Enlargement Act.
In August 2022 – just as Congress passed the “Inflation Reduction Act” which included all sorts of incentives to further fuel inflation and enrich Corporate America, including a $7,500 subsidy for EVs – Ford raised the price of Lightning by $7,000, at $46,974 , eating up most of the EV subsidy in one gulp. That’s why inflation got worse LOL.
A few months later, in early October 2022, Ford raised the price of the Lightning by another $5,000, to $51,974, laughing even louder about EV subsidies,
A few months later, which means today, the Ford is up another $4,000 to $55,974. Add destination and delivery charges of $1,895, for a total MSRP of $57,869. For the cheapest version.
Throughout the price increase, destination and delivery charges were also increased by approximately $200.
Ford also raised the prices of its August 2022 Mustang Mach E SUV, as $7,500 in incentives were passed on, by $3,000 to $8,000, depending on trim.
Tesla raises its US prices by $2,000 to $6000 by June 2022
I’ve been ranting about EV incentives for a while now.
Prices are rising because they are Possible go up If the competition and a strike by the buyers of the buyers do not allow the prices to rise, then the prices do not rise, and if the automakers still try to raise the prices, then the sales fall , and suddenly there is an oversupply, all the way up the supply chain, which also lowers costs. That’s how inflation ends.
But that is not the situation today. Now there’s red hot inflation, hot demand for EVs, massive overstimulation among consumers, who are now getting another $7,500 from the federal government and more from state governments to buy the EV, and crank up the hot demand for EVs amid a lack of competition and very limited supply.
When demand is strong, there’s plenty of incentive to heat up demand, amid limited or no competition, limited supply, and the burgeoning inflationary mindset where consumers have had enough of paying anything, but then manufacturers just charge whatever.
If you want to incentivize a new technology to pursue it, OK. But EVs are the hottest product right now, with huge demand, huge amounts of excitement, long waiting lists, sold out production, and very little supply.
In September 2021 when an earlier version of EV incentives was kicked out of Congress, I said:
“Pile on government incentives through tax credits to a hot industry that already plans to invest hundreds of billions of dollars to compete and lower EV prices, amid tepid demand from overzealous buyers chasing new cars no matter what. price, amid hot inflation and historic inventory shortages” is a “totally braindead economic policy.”
Not braindead if you’re on Corporate America’s payroll because this bill, like so many other bills that have passed, is becoming a spectacular Corporate-America-enrichment bill, as these price increases show.
Competition will drive down prices, not incentives. And lower prices stimulate demand. Incentives fuel price increases and profit margins. Hot inflation? High interest rates? Don’t worry, To kill inflation, Congress is throwing more fuel at it, LOL.
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