Interest Rates softening market?

[ElectrifyCLT]

This is a self selecting group on the forum, if you’re here, you’re more interested in the Lightning than an average consumer. That said, there aren’t 200k of us on here. The question is simple; is the combination of inflation, a wavering stock market, and auto loan rates at or near 15-year highs going to start to impact preorder conversion/ in stock ADM?

Just looking at cars.com a number of available lightnings are showing “price cuts” where dealers are cutting their ADM ask meaningfully ($7.5-5k).

I get the truck is still en fuego, but I do wonder what things look like as mannequins become available in a few months time.

I don’t suspect anyone here backs out. If you’re in the forum you’re a big fan. But I think the average consumer is going to soften quickly.

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[PA Lightning]

Every mannequin I know of is spoken for. It just can't leave the lot with the buyer for six months.

I do think a lot of average consumers will back out because of the price increase and rising interest rates. The fat cats will still buy the upper level trims, which seems what Ford is pumping out.

I guess time will tell.

 

[FordLightningMan]

The Fed is increasing rates to fight inflation, it's the entire reason for the monetary policy. Housing prices dropped for the first time in 3 years, so the Fed's plan is working.

Will this type of pricing pressure extend to more products than houses? I think that supply and demand will come into play, as there are also more millionaires in the U.S. than ever before, so there's a big pool of people with money who want new toys.

Once there is market saturation, EV prices will be very interesting. We're a long way from that point now, so I don't think many Lightnings will be selling under MSRP, until the wealthy snatch up the EVs they want.

 

[ElectrifyCLT]

The Fed is increasing rates to fight inflation, it's the entire reason for the monetary policy. Housing prices dropped for the first time in 3 years, so the Fed's plan is working.

I don't think many Lightnings will be selling under MSRP, until the wealthy snatch up the EVs they want.

Definitely not under MSRP. But I do think the $20k ADM days are dwindling fast. Auto loans are typically the 2nd or 3rd largest debt a person carries. Used car market is already pulling back hard. I suspect new cars are next.

 

[BennyTheBeaver]

Higher interest rates wouldn't stop me from buying a vehicle. Just means I'll refinance sooner than I was anticipating when the rates drop again...

 

[sotek2345]

I still think Ford will sell every one they can make, but I do expect ADM to come down.

It is alps hitting the used car market so your trade is probably worth less than you think if you check a few weeks ago. I just got hit with that.

 

[ericjtsang]

For me it's a little bit of everything. Day 1 reservation holder, at least wanted an SR Lariat in Atlas Blue... not only have I not even been invited to reserve, they no longer even have atlas.

Then the price went up, we still don't really know about the 2023 tax credit (which would make it even more expensive), we may be entering a recession, stocks down, interest rates up... it's getting harder to justify a 75K truck for me. Your comfort and situation will vary, I'm just listing out my reasons.

 

[ElectrifyCLT]

For me it's a little bit of everything. Day 1 reservation holder, at least wanted an SR Lariat in Atlas Blue... not only have I not even been invited to reserve, they no longer even have atlas.

Then the price went up, we still don't really know about the 2023 tax credit (which would make it even more expensive), we may be entering a recession, stocks down, interest rates up... it's getting harder to justify a 75K truck for me. Your comfort and situation will vary, I'm just listing out my reasons.

Bingo. Kudos to you for having that self-restraint (or at least thinking about having that restraint). I suspect there's a meaningful number of folks in this position, they just aren't on the forum.

 

[KevinC]

I saw an article the other day indicating Tesla delivery time was shrinking to the point where they were delivering in less than a month more often than usual. It will be interesting to see what happens when/if tesla capacity catches up to or exceeds it's orders. Will they churn out stock and store it or idle production. Part of Tesla cost savings is they don't store stock and their capacity is almost fully utilized.

 

[FordLightningMan]

Luxury goods have been recession and inflation proof in recent economic cycles. For every person counting pennies to make sure the Lightning makes sense, there's someone out there with substantial wealth ready to buy.

I think that even though Ford isn't a luxury brand, the Lightning is temporarily a luxury product, because there just aren't many EV trucks on the road. Until there are more EVs readily available, Lightning prices will hold.

For anyone who is having doubts they can still purchase due to the looming recession, maybe you've dodged a bullet by not locking into a 5 year vehicle loan you'll have trouble with? When there are many more EV trucks available in 2024-25, that seemingly will be the better time for mass adoption across all income segments.

 

[RickLightning]

Interest rates aren't the issue for me, it's the price increase and loss of tax credit.

 

[FordLightningMan]

I saw an article the other day indicating Tesla delivery time was shrinking to the point where they were delivering in less than a month more often than usual. It will be interesting to see what happens when/if tesla capacity catches up to or exceeds it's orders. Will they churn out stock and store it or idle production. Part of Tesla cost savings is they don't store stock and their capacity is almost fully utilized.

I hate to double post, but Tesla isn't making a truck yet. There's Rivian (more expensive), Hummer (even more expensive), and Lightning (still cheapest, despite increases) when it comes to current EV truck options.

I know many people who don't buy a Tesla, because the only one big enough for their family is MX, which is out of their price range. Mach-E may run into some pressure if Tesla demand matches production and Tesla drops prices (they have widest margins, this is possible). Lightning isn't going to be as impacted, it's not the same class of vehicle where production is catching up to demand.

 

[Nick Gerteis]

I think you’re exactly right. While I’m still in, many others are already out or will be soon as economic conditions worsen.

 

[mr.Magoo]

Bingo. ....... I suspect there's a meaningful number of folks in this position, they just aren't on the forum.

While I'm on the forum I would definitely be in that position.

If I hadn't gotten a 22 I would most likely bow out.
The price hike, plus lack of tax credit, plus the higher interest rate, all things combined is diminishing the overall value.
I wanted an ER and a Lariat and 90,000 is a LOT of money for any car.

I don't need a truck and I wasn't hell bent on an EV, it just happens it's a lot more practical for my needs than an SUV, but plenty of SUV hybrids can be had for 65-75K and it'll take many years to make up for the difference in gas/maintenance savings.

 

[ElectrifyCLT]

There's Rivian (more expensive)

You'd be surprised. My R1T preorder is within $1,500 of my ideal Lariat ER at the new price, and the Lightning more expensive if you consider the Premium a better comparison on the interior.

I don't want to get into the nitty gritty comparisons, that's not the point, but the margin is far narrower than it was previously.

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