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Has anyone noticed the industry gearing up for a strong 2021?
  • Former Ford Motor CEO Mark Fields expects the auto industry to have a strong 2021.
  • “The industry has been incredibly resilient, and it’s actually pretty healthy,” despite the coronavirus and unemployment figures, Fields told CNBC.
  • “I think the industry is in a sweet spot right now,” he added.
 

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"Sweet spot" would be figuring out how to produce more Mach Es than the pathetic projected 60,000 next year. They would easily sell any amount that they could produce. Tesla will sell 500,000 Model Ys in 2021. The market is begging for good EVs. It's time to build them!
 

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"Sweet spot" would be figuring out how to produce more Mach Es than the pathetic projected 60,000 next year. They would easily sell any amount that they could produce. Tesla will sell 500,000 Model Ys in 2021. The market is begging for good EVs. It's time to build them!
No the "Sweet spot" is making enough profits for sustainable operations during the transition to EVs.
As for MME production. We ordered late (29 April 20) and have a production date for mid January. As far as I can tell, they're not production limited as they're still taking orders. Ford has said that MME will be profitable from day 1 but I doubt they make all that much profit. Which is also true for Tesla on the MY. A large portion of Tesla's profits come from carbon credits. Whether it'd be 10,000, 50,000, 100,000 or 5000,000 MMEs, Ford just needs to satisfy the demand while improving quality and reducing costs so that the MME does generate bigger profits.
 

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"Sweet spot" would be figuring out how to produce more Mach Es than the pathetic projected 60,000 next year. They would easily sell any amount that they could produce. Tesla will sell 500,000 Model Ys in 2021. The market is begging for good EVs. It's time to build them!
My take on the situation:

Its not that Ford can’t produce vehicles very quickly, they have the know-how. Once the factory is fully operational, Ford can build a car at the rate of about one per minute.

However, Ford has a challenge that Tesla currently doesn’t. The industry and consumers have to get comfortable with Ford’s EVs and their performance.

In the meantime, Ford will keep producing as long as demand is steady. They will probably keep on-hand MMe stock inventories small to ensure they do not take a loss. Building 200,000 units based on hopes of consumer acceptance is not a good business strategy.

For the long-game, Ford really has to secure their battery sourcing—hopefully in-house. This will help ensure there is no supply constraints to meet demand as it grows.

JMHO
 

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...However, Ford has a challenge that Tesla currently doesn’t. The industry and consumers have to get comfortable with Ford’s EVs and their performance...
Therein lies the rub. They need to get cars in numbers on the Dealer's lots, show them, demonstrate those features and incentivize dealers to sell them.

Their strange current hybrid sales scheme will likely prevent that. I noticed in the posted price tables that dealer invoices for the online ordered cars were identical to the MSRPs, including holdbacks. Where is the dealer profit, other than financing, if they even share in that with Mach E orders? Where is the incentive for a salesman to earn a commission? Why are dealers accepting sales without ADM?

Their current online sales system is working to sell all they produce with their present production plans, but how are they going to get customers that go to dealers to even consider buying a Mach E, if the can't compare hands on with other models? When will Ford provide an incentive for a dealer to stock, or for a salesman to steer a customer to this brand new, very capable EV? Put a customer, who never thought of buying an EV, in an AWD Mach E for a test drive and see how quickly their minds open to an EV, even if a bit more expensive to start with.

I can't imagine dealers are very happy with the current system. Ford is tied to the dealer model. They need to figure how to make this EV business work for everyone.

Ramblings of an interested party :)
 

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Therein lies the rub. They need to get cars in numbers on the Dealer's lots, show them, demonstrate those features and incentivize dealers to sell them.

Their strange current hybrid sales scheme will likely prevent that. I noticed in the posted price tables that dealer invoices for the online ordered cars were identical to the MSRPs, including holdbacks. Where is the dealer profit, other than financing, if they even share in that with Mach E orders? Where is the incentive for a salesman to earn a commission? Why are dealers accepting sales without ADM?

Their current online sales system is working to sell all they produce with their present production plans, but how are they going to get customers that go to dealers to even consider buying a Mach E, if the can't compare hands on with other models? When will Ford provide an incentive for a dealer to stock, or for a salesman to steer a customer to this brand new, very capable EV? Put a customer, who never thought of buying an EV, in an AWD Mach E for a test drive and see how quickly their minds open to an EV, even if a bit more expensive to start with.

I can't imagine dealers are very happy with the current system. Ford is tied to the dealer model. They need to figure how to make this EV business work for everyone.

Ramblings of an interested party :)
All good points.

But if dealers are still pretending that EVs aren't the future, and pushing customers to ICE, which at least some are, well, that's a problem. So this requires that dealers be willing to participate in the revolution.

For example, if every Ford dealer had a couple of DC Fast chargers on their lots, free for Fords and maybe charging dollars/kwhr for other brands, it would dramatically change both the US charging structure and demonstrate a commitment to the EV world. It would be an initial investment, sure, but over the long term it wouldn't be a lot of money, to provide those chargers.

I think that both the Ford c-level and dealers themselves need to think about how committed that they are, and then take fast action. Time is wasting.

IMHO.
 

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Therein lies the rub. They need to get cars in numbers on the Dealer's lots, show them, demonstrate those features and incentivize dealers to sell them.

Their strange current hybrid sales scheme will likely prevent that. I noticed in the posted price tables that dealer invoices for the online ordered cars were identical to the MSRPs, including holdbacks. Where is the dealer profit, other than financing, if they even share in that with Mach E orders? Where is the incentive for a salesman to earn a commission? Why are dealers accepting sales without ADM?

Their current online sales system is working to sell all they produce with their present production plans, but how are they going to get customers that go to dealers to even consider buying a Mach E, if the can't compare hands on with other models? When will Ford provide an incentive for a dealer to stock, or for a salesman to steer a customer to this brand new, very capable EV? Put a customer, who never thought of buying an EV, in an AWD Mach E for a test drive and see how quickly their minds open to an EV, even if a bit more expensive to start with.

I can't imagine dealers are very happy with the current system. Ford is tied to the dealer model. They need to figure how to make this EV business work for everyone.

Ramblings of an interested party :)
From my discussion with my sales rep, these are my take-aways. Any Ford sales reps out there, please correct where I got it wrong.

There are two incentives for the dealers.

The first is the built-in commission in the MSRP. So there is no need to increase the MSRP, it’s already included.

No holdback playroom is necessary in the new pricing model. The dealerships used to compete by basically erasing most of the holdback anyway in order to secure the sale. So it is an overstatement on how much revenue is lost here. The biggest loss is from the service and maintenance side.

The second incentive to dealers is sales volume. The more cars sold, the more bonus the dealer gets. Ford offers better incentive bonuses for cars it wants to promote.

Now, dealerships have to find a way to differentiate themselves by what value-add services they can offer customers.

Back to my musings:
Regarding test drives , that's what the FCTP units are for. Test drive. You like? You order one. It will be better once the MMe reservation back-log is satisfied, it will shorten the order to delivery time to 6-8 weeks.

One last thing. Since the MMe demand pressure is not yet known, building up MMe stock on dealer lots is a bad idea. On-hand inventory turn-over cannot exceed a couple of weeks to maintain profitability. You must pace supply with demand.

All food for thought, hopefully not junk food 😁.
 

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...The first is the built-in commission in the MSRP. So there is no need to increase the MSRP, it’s already included.

No holdback playroom is necessary in the new pricing model. The dealerships used to compete by basically erasing most of the holdback anyway in order to secure the sale. So it is an overstatement on how much revenue is lost here. The biggest loss is from the service and maintenance side.

The second incentive to dealers is sales volume. The more cars sold, the more bonus the dealer gets. Ford offers better incentive bonuses for cars it wants to promote...
Commission for the dealer, commission for a salesman, I don't see where it is if the Invoice (with no holdback) matches the MSRP. Dealers profits are sale price above invoice, holdbacks, fees (doc,i.e.), financing markup, addons, service and incentives. I just was noting that, from the chart in the price thread, no margin above invoice and no holdbacks. When I queried in another thread, no one responded about doc fees. As a result, I seem to see a couple of dealer profit figures missing and a real question about salesman incentive to promote the model.

2021 Mustang Mach-E Price List | Mach-E Forum | Ford Mustang Mach-E Forum and News (macheclub.com)
 

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Commission for the dealer, commission for a salesman, I don't see where it is if the Invoice (with no holdback) matches the MSRP. Dealers profits are sale price above invoice, holdbacks, fees (doc,i.e.), financing markup, addons, service and incentives. I just was noting that, from the chart in the price thread, no margin above invoice and no holdbacks. When I queried in another thread, no one responded about doc fees. As a result, I seem to see a couple of dealer profit figures missing and a real question about salesman incentive to promote the model.

2021 Mustang Mach-E Price List | Mach-E Forum | Ford Mustang Mach-E Forum and News (macheclub.com)
There is a better Ford document (below) in the form of a bar graph, comparing the old price-structure method to the new.

The dealer portions are now fixed. These monies are separate from the sale-volume bonuses. Note: They have removed the trade margin altogether, thereby making the sale the actual MSRP.

3253
 

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My take on the situation:

Its not that Ford can’t produce vehicles very quickly, they have the know-how. Once the factory is fully operational, Ford can build a car at the rate of about one per minute.

However, Ford has a challenge that Tesla currently doesn’t. The industry and consumers have to get comfortable with Ford’s EVs and their performance.

In the meantime, Ford will keep producing as long as demand is steady. They will probably keep on-hand MMe stock inventories small to ensure they do not take a loss. Building 200,000 units based on hopes of consumer acceptance is not a good business strategy.

For the long-game, Ford really has to secure their battery sourcing—hopefully in-house. This will help ensure there is no supply constraints to meet demand as it grows.

JMHO

Call me "old school": I ran a very successful importing business for many, many years:

When I tried to sell a customer who was buying from a competitor, I had to either offer a significantly better product at the same price, or a similar product at a significantly better price.

A similar product at a slight discount would not get me a new account nor would a better product at a higher price.

The Tesla Model Y, regardless of what we may think, is presently the industry standard.

The MME is trying to either take away customers from the MY, or create new customers.

Is the MME Premium LR AWD significantly better than the MY at the same price? In honesty, it is not. It may be incrementally better but not significantly better at or about the same price.

Is the MME Premium LR AWD the same as the MY but at a significantly better price? No and in fact the MY lease is significantly cheaper than the MME.

I just do not understands Ford's strategy: but again I am "old school"

Finally, to many the Mustang name may mean something. To anyone under 50 probably not. I ask my 42 year old son about a Mustang and he responds "Your first car when you graduated college"

This is a Ford, not an Audi, BMW or Mercedes where those brands can command a premium price.

If I were Ford marketing, being cognizant of the battery limitations vis a vis range, I would have had the MME priced $5,000 to $10,000 less across the model lineup - to break even instead of trying to make a profit.

Then the MME would have blown out the doors! It would set Tesla back on their heels and would tell the world that Ford is committed to EV's!

Getting market share, rather than initial profits would have been my strategy.

Without a viable RCL, and at the present price points, I predict MME by mid 2021 to be sitting on dealer's lots for immediate delivery fighting it out with VW ID4 on price and the Audi Q4 on the higher end.

Just my $.02.
 

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I'm hoping my investment in Ford when the stock dipped below $5 will be able to pay for our MME and then some...
When Ford didn't ask for 'bailout' money during the 2008 recession I got in @ approx. $1.70 + 12 years of dividends and I'm betting on $13-$15 by this time 2021 which may be the basis for a GT performance if they can get the range up in three years.
 

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Call me "old school": I ran a very successful importing business for many, many years:

When I tried to sell a customer who was buying from a competitor, I had to either offer a significantly better product at the same price, or a similar product at a significantly better price.

A similar product at a slight discount would not get me a new account nor would a better product at a higher price.

The Tesla Model Y, regardless of what we may think, is presently the industry standard.

The MME is trying to either take away customers from the MY, or create new customers.

Is the MME Premium LR AWD significantly better than the MY at the same price? In honesty, it is not. It may be incrementally better but not significantly better at or about the same price.

Is the MME Premium LR AWD the same as the MY but at a significantly better price? No and in fact the MY lease is significantly cheaper than the MME.

I just do not understands Ford's strategy: but again I am "old school"

Finally, to many the Mustang name may mean something. To anyone under 50 probably not. I ask my 42 year old son about a Mustang and he responds "Your first car when you graduated college"

This is a Ford, not an Audi, BMW or Mercedes where those brands can command a premium price.

If I were Ford marketing, being cognizant of the battery limitations vis a vis range, I would have had the MME priced $5,000 to $10,000 less across the model lineup - to break even instead of trying to make a profit.

Then the MME would have blown out the doors! It would set Tesla back on their heels and would tell the world that Ford is committed to EV's!

Getting market share, rather than initial profits would have been my strategy.

Without a viable RCL, and at the present price points, I predict MME by mid 2021 to be sitting on dealer's lots for immediate delivery fighting it out with VW ID4 on price and the Audi Q4 on the higher end.

Just my $.02.
Ford is not trying to steal customers from Tesla, but be an alternative purchase for EV shoppers.

The market is not at a saturation point where Ford needs to focus on a strategy as you have outlined. In fact, the EV market is in its infancy—especially in the US.

Purchasing a car is more than just raw numbers. When comparing cars on paper, most have lists of needs and wants. The needs being things like: Does it have at least 200 miles range? Can it charge over 100kW, does it have AWD available, does it handle well on the road? Meet my price-point? Etc. Both the MY and MMe (and I expect the ID.4, and Ariya) will meet and exceed my needs requirements.

Is the MMe the best in all these areas? No. But it does exceed my baseline as a shopper. Therefore, it makes the shortlist.

Here is where the purchase decision becomes purely subjective. It is now my wants that are helping determine my final decision. Which of these cars will be fun to drive where I look forward to be behind the wheel? Have oodles of tech features I will actually use? Have me happy to see it in the driveway in the morning, and turning around after I park in the evening to take a last look? Of the four I listed, it is only the MMe that sells itself here for me.

Does it do it for you? Maybe so, Maybe not. But that is only for you to determine.
 

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"old school" guy here who prefers an actual driver dashboard and physical switchgear for a lot of the functions and can't be bothered using the touchscreen for adjusting vents or opening the glove compartment.

Said MME range and performance is good enough for me. We don't know what initial build quality will be for the MME but we do know that the MY build quality ain't that great.

If you ran a successful importing business for many, many, years... you were good at analyzing what your customers might prefer vs what you prefer. No? The BEV space is a big market and there's room for many competing players and models.
  • I prefer the mix of switchgear and touchscreen function on the MME.
  • I prefer having a Frunk (which is not available on the VW or the Audi).
  • I prefer the MME styling over the MY, ID.4... De gustibus non est disputandum.
  • I prefer doing business with a local dealer (warts and all) in my community than a corporate showroom an hours drive away.
  • I prefer spending my $$$s on products that come from a company I'm invested in (I and others have mentioned previously that we are hoping our investments in Ford stock will pay for our MMEs... this could be the case for Tesla investors as week).
  • I prefer to provide validation for a traditional automobile company that their decision for electrification was a good one (positive reinforcement vs negative - giving the sale to Tesla).
Now we still have to drive the MME before purchasing, if in the remote chance that doesn't go well, the sale would be off. Also Ford could punt the build quality... one never knows.

Just my $.02.

Call me "old school": I ran a very successful importing business for many, many years:

When I tried to sell a customer who was buying from a competitor, I had to either offer a significantly better product at the same price, or a similar product at a significantly better price.

A similar product at a slight discount would not get me a new account nor would a better product at a higher price.

The Tesla Model Y, regardless of what we may think, is presently the industry standard.

The MME is trying to either take away customers from the MY, or create new customers.

Is the MME Premium LR AWD significantly better than the MY at the same price? In honesty, it is not. It may be incrementally better but not significantly better at or about the same price.

Is the MME Premium LR AWD the same as the MY but at a significantly better price? No and in fact the MY lease is significantly cheaper than the MME.

I just do not understands Ford's strategy: but again I am "old school"

Finally, to many the Mustang name may mean something. To anyone under 50 probably not. I ask my 42 year old son about a Mustang and he responds "Your first car when you graduated college"

This is a Ford, not an Audi, BMW or Mercedes where those brands can command a premium price.

If I were Ford marketing, being cognizant of the battery limitations vis a vis range, I would have had the MME priced $5,000 to $10,000 less across the model lineup - to break even instead of trying to make a profit.

Then the MME would have blown out the doors! It would set Tesla back on their heels and would tell the world that Ford is committed to EV's!

Getting market share, rather than initial profits would have been my strategy.

Without a viable RCL, and at the present price points, I predict MME by mid 2021 to be sitting on dealer's lots for immediate delivery fighting it out with VW ID4 on price and the Audi Q4 on the higher end.

Just my $.02.
 

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It's not clear, who pays and to whom do the light blue items go. No matter, it doesn't look like there is a lot of dealer/salesman incentive to sell the Mach E vs. an ICE SUV on his lot. We have not yet seen an actual sales contract issued by a dealer to one of the current customers showing fees the dealers expect to collect. I am concerned because I would like to see the Mach E and other new EVs like the ID4 and Q4 have broad volume success that Tesla is having.


There is a better Ford document (below) in the form of a bar graph, comparing the old price-structure method to the new.

The dealer portions are now fixed. These monies are separate from the sale-volume bonuses. Note: They have removed the trade margin altogether, thereby making the sale the actual MSRP.

View attachment 3253
 

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It's not clear, who pays and to whom do the light blue items go. No matter, it doesn't look like there is a lot of dealer/salesman incentive to sell the Mach E vs. an ICE SUV on his lot. We have not yet seen an actual sales contract issued by a dealer to one of the current customers showing fees the dealers expect to collect. I am concerned because I would like to see the Mach E and other new EVs like the ID4 and Q4 have broad volume success that Tesla is having.
I think the yellow is the salesman, the blue the dealer. Volume sales commissions are to individual salesman, and the dealership as a whole. Volume commissions are not reflected in the MSRP.

I understand your concerns, especially if this pricing structure was specifically for the MMe. However, I’ve read the new MSRP structure does not only apply to the MMe, but also the new Broncos as well. It may be safe to assume it will be the new pricing model all Fords carry.

If it is an equal playing field, there is just as much incentive to sell a MMe as any other car (except when ford offers bonus volume-commissions for specific models). Let’s keep our fingers crossed.
 

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I think the yellow is the salesman, the blue the dealer. Volume sales commissions are to individual salesman, and the dealership as a whole. Volume commissions are not reflected in the MSRP...
Looking at the first column, yellow is additional profit for the dealer, i.e. holdback, all shown as part of dealer discount by the bracketed 8.5%. Blue items appear to include items paid by the dealer, i.e. advertising co-op, sometimes boldly claimed in a sales contract as "fees" payable by the customer. Going to the right column it would appear that the dealer will only receive the $750 yellow amount (not including unspecified bonuses or incentives). I'm also concerned that the "EV certification funding" and "Ford commitment program" are charges to the dealer, funding service department updates and training to deal with EVs, which will be a significant expense.

I wish that a member here, who is associated with a dealer or knowledgeable about how their finances work, would comment to allay my concern that dealer participation in selling Mach Es wont be popular without ADMs.
 

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Looking at the first column, yellow is additional profit for the dealer, i.e. holdback, all shown as part of dealer discount by the bracketed 8.5%. Blue items appear to include items paid by the dealer, i.e. advertising co-op, sometimes boldly claimed in a sales contract as "fees" payable by the customer. Going to the right column it would appear that the dealer will only receive the $750 yellow amount (not including unspecified bonuses or incentives). I'm also concerned that the "EV certification funding" and "Ford commitment program" are charges to the dealer, funding service department updates and training to deal with EVs, which will be a significant expense.

I wish that a member here, who is associated with a dealer or knowledgeable about how their finances work, would comment to allay my concern that dealer participation in selling Mach Es wont be popular without ADMs.
Yes, it would be nice to hear details from an actual dealer.

Some quick notes on the MSRP chart for you:
  • 1% + $250 as a delivery allowance. This is meant to compensate the dealership and employee cost to physically prep and deliver the vehicle.
  • 1% in ad covenant is money to be used for marketing purposes. This money is forfeit if they advertise the MMe at any price other than MSRP.
  • 2% in EV Funding is a bonus for maintaining proper EV certification and on-site chargers.
  • 0.9% is made up of two bonus’s, one for maintaining a positive customer feedback quota, and another for registering a minimum of 70% of new car customer through Ford’s app, FordPass.
 
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