There is so much buyer interest in the Ford Bronco – which isn’t electric – that Ford can’t build enough to meet demand and is actually offering people who ordered one $2,500 store credit to cancel their order in favor of something else.
Some have been waiting more than a year for a Bronco – which Ford revived for the 2021 model year (my review can be found here). It has been a hugely successful vehicle for Ford. It is – clearly – the kind of vehicle lots of people want to buy.
No subsidies – or mandates – needed.
In the old normal, Ford would build more Broncos to meet the market demand for them. The whole point of being in the car business once-upon-a-time being to sell as many vehicles as people wanted to buy. But we live in the New Abnormal. It is characterized by – among other things – the building of vehicles for which there isn’t market demand, because government requires them to be built.
Irrespective of whether they can be sold at a profit.
We all know which vehicles these are.
Two figures will make the point.
The first one is 39,458. This is the number of Mach-e “Mustangs” (my review of this one can be found here) that Ford sold last year (2022). The second number is 94,031. That is the number of Broncos Ford sold during the same time period. In other words, Ford sold more than twice as many Broncos as Mach-e “Mustangs” – and could have sold many more had there been more Broncos to sell.
Which Ford could probably have done, had it not devoted manufacturing capacity and raw materials etc., to the building of Mach-e “Mustangs,” for which there is much less demand – and probably no profit, as the Mach-e is an EV and these have an established track record of being so expensive to build they must be sold at a loss.
It is also why – tellingly, though it seems almost no one wants to point out the elephant in the room – it continues to be necessary to subsidize them.
These were just renewed – after fifteen years of insisting they were “just a temporary leg-up,” needed to “encourage” the adoption of “new technology” (which battery-powered cars aren’t; in fact, they are 100-plus-years-old technology). Obviously, they still cost too much else it would not be necessary to reduce what they cost. Which just happened, again – in the form of price cuts that Ford announced just the other day. In normal times, a vehicle manufacturer does not cut the price of vehicles that sell. Price cuts are a sure sign of either of two things:
And the Mach-e is still very expensive, even though Ford just “cut” the price.
Well, sort of.
The “new” base price of the ’23 model has been “reduced” to $47,495 from $48,185 – which was the price of the ’23 model just a few weeks ago. But this is still $700 higher this week than it was a few weeks ago. It is like the chocolate ration in Orwell’s 1984 being “increased” by 5 percent this week – even though it had been cut by 5 percent the week before.
Hurrah for Big Brother!
Hurrah for the New Abnormal.
“Sales” – if that word can be used to describe a transfer at a loss – of the Mach-e “Mustang” are worse than they seem, too- when considered in context. For the Mach-e is a medium-small crossover SUV, not a “Mustang.” The point being that small crossovers are practical vehicles that can serve as family vehicles and for that reason have an inherently larger potential buyer pool to draw from.
Assuming buyers want one.
This brings up another number that will make the point: 366,748. That is the number of RAV4s Toyota sold last year (2022). The RAV4 (my review of this one is here) and the Mach-e are essentially similar in general layout. Both are medium-small crossovers. The Ford is slightly longer overall but the RAV4 has slightly more cargo room (37.6 cubic feet behind its second row; 69.8 cubic feet with the second row folded – vs. 34.4 cubic feet behind the second row in the Mach-e and 64.4 cubic feet with the second row folded).
But there are some big differences.
The Ford can go a maximum of just 247 miles – assuming it’s not cold out – while the RAV4 can go at least 376 miles, no matter how cold (or hot) it is, as its range isn’t appreciably affected by temperature or the use of accessories such as the heater or air conditioner.
That’s in “city” driving.
But the big number is this one: $25,575. That is the base price of a new RAV4. One could almost buy two RAV4s for the price of one Mach-e. And by purchasing just one, the buyer doesn’t spend $21,920 more – the difference in price between a new RAV4 and a new Mach-e.
And now you see why Toyota sells roughly nine times as many RAV4s as Ford sells Mach-e “Mustangs” – and does not have to resort to subsidizing them in order to “sell” them.
But perhaps the most telling number is the number of Broncos Ford has sold – especially given the context. The Bronco is not a practical vehicle. It is a jacked-up 4×4 designed for extreme off-roading. It is not especially comfortable. It gets terrible gas mileage (20 city, 21 highway). It is also a fairly expensive vehicle, with a base price of $32,295. The Raptor version ($73,780) costs even more than the Mach-e.
Yet Ford cannot meet demand for these things.
Rather, Ford will not meet demand for them. It probably could have, were it not so determined to build electric vehicles such as the Mach-e and F-150 Lightning, for which there isn’t much demand but which do divert a lot of resources and manufacturing capacity. But then, we are living in the New Abnormal era.
It involves what Ford’s CEO Jim Farley styles “fundamental change” and here is what he had to say about that the other day:
“Fundamental change for us is two things: Being able to have a digital product where you make the product better every day through over-the-air updates,” much the way mobile phones and computers update now . . . Next is a need for shared mobility and the opportunity to rent rides, because fewer and fewer people can afford vehicles. Electrification is going to make it worse, actually.”
Italics added, to convey the point.
And that’s the true context – and the real reason – why Ford is paying people not to buy what does sell.
. . .
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