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Ford might be gearing up to add more incentives for the Mach-E to help convert reservations into orders. EVBite shared a piece of a survey on Twitter that includes things like:
  • Customer Cash Incentive ($500-$1000)
  • FordPass Rewards or FordPass Charging Network Credit ($100+ Value)
  • Free charger hardware
  • Free 48-hour test drive when FCTP units arrive
  • $500 Dealer Cash
  • Other (please email [email protected] with your suggestion)
Let's see if they implement any of these as we get closer and closer to production.


Mach-E Incentives
 

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Ford knows that when vehicles are priced above $40,000 the percentage of leases increases exponentially.

Presently Tesla is offering leases on the Model Y, $49,990 MSRP, for $499 per month with $4,500 down. If you back out the $4,500 down payment that comes to $638 a month.

To be competitive, after giving consideration to the Federal Tax Credit of $7,500, this is where the MachE must lease out under the Ford "Option Plan".

Presently the monthly payments under the Ford "Option Plan" are over $800 a month - very close to $900 a month.

That is not competitive and Ford knows it.

Ford has a basic problem: They announced that the very first MachE must make a profit and priced the car accordingly. That is a problem competing against a company that has been making EV for nearly 10 years.

Usually on a brand new model, they are sold at cost and as efficiencies are developed that is where profits are made especially when you are the "new guy on the block" or have come to the party "late" as Ford has.

Ford may be able to sell 20,000 MachE in the United States at the present price points, but going forward, at least imo, Ford will either have to reduce the price of the MachE or offer incentives.
 

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I would assume that whatever those incentives are, that they will be available for all at launch - not just those on the fence right now. If they offer them to get people off the fence, they had better offer them to all. And, BTW, $500 or $1,000 is not that much on a $60K vehicle. It needs to be a combination of things like $ off and attractive financing like 0%. The free 48 hour test drive is borderline funny.
 

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I would assume that whatever those incentives are, that they will be available for all at launch - not just those on the fence right now. If they offer them to get people off the fence, they had better offer them to all. And, BTW, $500 or $1,000 is not that much on a $60K vehicle. It needs to be a combination of things like $ off and attractive financing like 0%. The free 48 hour test drive is borderline funny.
Any Ford incentives in effect at time of closing your deal (usually at signature and delivery) are available to all, with the exception of special interest rates. Of course, special interest rates are based on your credit report and score.

I too, am surprised there is no special low/zero interest rate on that survey.
 

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I thought it weird to send the survey to dealers in the first place... They will get dealer biased responses. "Yeah, $500 dealer cash, of course."

This type of survey should go to test market consumers, ideally Ford employees that have reserved a Mach-E but not ordered yet.
 

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Ford has been selling vehicles for over a century including the most popular vehicle on the road (F-150) and know what they are doing. It's my belief that the people at Dearborn are sending out "feelers" during the startup period based on data and new entries into the BEV market by other manufacturers. Until the MMes are delivered to customers the thinking at Ford will remain fluid based on the market pressures. I'm managing my expectations but things like credit rates, dealer and customer incentives are "charges" against revenue that can be used to make the vehicle profitable and still give Ford a write-down. It would be interesting to see what the percentage of "on the fence" and cancellations are and how they compare to Tesla which if memory serves is around 12% of reservations.
 

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Ford has been selling vehicles for over a century including the most popular vehicle on the road (F-150) and know what they are doing. It's my belief that the people at Dearborn are sending out "feelers" during the startup period based on data and new entries into the BEV market by other manufacturers. Until the MMes are delivered to customers the thinking at Ford will remain fluid based on the market pressures. I'm managing my expectations but things like credit rates, dealer and customer incentives are "charges" against revenue that can be used to make the vehicle profitable and still give Ford a write-down. It would be interesting to see what the percentage of "on the fence" and cancellations are and how they compare to Tesla which if memory serves is around 12% of reservations.
Thats what i remember the Tesla cancellation rate was outside the COVID-19 crisis.
I haven’t seen any new data on cancellations within the crisis to estimate the MMe cancellation rate.
 

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Ford has been selling vehicles for over a century including the most popular vehicle on the road (F-150) and know what they are doing.
Well they really haven't demonstrated that they know what they're doing over the last couple of decades. Particularly if one goes by their most recent important launch (the Explorer) They were well on their way to becoming "The F150 and Mustang Company" before the MME and the Bronco.

Signs that they're beginning to get a clue though.... I still think they're stuck in the last century wrt to their sales/dealer model... They are going to have to start catering to the younger generation of car buyers.

I say this as a F long... so I actually have skin in the game.
 

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Well they really haven't demonstrated that they know what they're doing over the last couple of decades. Particularly if one goes by their most recent important launch (the Explorer) They were well on their way to becoming "The F150 and Mustang Company" before the MME and the Bronco.

Signs that they're beginning to get a clue though.... I still think they're stuck in the last century wrt to their sales/dealer model... They are going to have to start catering to the younger generation of car buyers.

I say this as a F long... so I actually have skin in the game.
I'm no fan of the dealer model and the Explorer launch by all accounts was an unmitigated screw up. What I see however with the structural changes in the Ford business model over the past couple of years demonstrates a willingness to improve, improvise and modernize. As I stated above, it's my belief that Ford is committed to remaining flexible in what is and will continue to be a competitive and eventually a very lucrative market for BEVs and PHEVs. Thanks for your input.
 

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Well they really haven't demonstrated that they know what they're doing over the last couple of decades. Particularly if one goes by their most recent important launch (the Explorer) They were well on their way to becoming "The F150 and Mustang Company" before the MME and the Bronco.

Signs that they're beginning to get a clue though.... I still think they're stuck in the last century wrt to their sales/dealer model... They are going to have to start catering to the younger generation of car buyers.

I say this as a F long... so I actually have skin in the game.
I hope Ford’s lawyers are working on new contractual stipulations for dealer franchises that they will introduce as they come to renewal. Such as, no markups. There are also, believe-it-or-not, state and local ordinances to deal with.
Hopefully they can bring the dealership model into the new world.
 

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I hope Ford’s lawyers are working on new contractual stipulations for dealer franchises that they will introduce as they come to renewal. Such as, no markups. There are also, believe-it-or-not, state and local ordinances to deal with.
Hopefully they can bring the dealership model into the new world.
NJ and TX as I recall tried to keep Tesla out because the Dealers Assn. had the legislatures in their pocket.
Check out the Non Mach E posts on dealers who are not charging ADM on Broncos
 

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It is becoming a tough sell, even to someone with an order already in. Tesla Model Y with more range, more speed for under $500 a month on lease. Or my extended range AWD Premium for over $800 a month on Ford Options. I do really hate the Tesla interior and you get zero equity in a Tesla lease on 3/Y, but man that price difference hurts.
 

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It is becoming a tough sell, even to someone with an order already in. Tesla Model Y with more range, more speed for under $500 a month on lease. Or my extended range AWD Premium for over $800 a month on Ford Options. I do really hate the Tesla interior and you get zero equity in a Tesla lease on 3/Y, but man that price difference hurts.
I think that some modifications are being considered in Dearborn for the balance of 2020. Time will tell
 

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It is becoming a tough sell, even to someone with an order already in. Tesla Model Y with more range, more speed for under $500 a month on lease. Or my extended range AWD Premium for over $800 a month on Ford Options. I do really hate the Tesla interior and you get zero equity in a Tesla lease on 3/Y, but man that price difference hurts.
I could not agree more. See my post #2 in this thread.

In reality no one knows what the MachE will be worth in three years so even a 43% residual may not give you any equity.

With the present Model S giving range of almost 400 miles, how valuable is a 5 year old Model S with a 265 range?

Tesla has been reducing price and extending range almost every 6 months. That hits the resale value of every prior car sold.

To cap my depreciation expense I will only lease and not buy.

The Model Y gives me more technology, more range and is slightly faster than the MachE. With the savings on a lease on a Model Y vs. a MachE over 3 years of more than $7,000 I can learn to live with the interior, its overall design and even some of its quality control issues.

I have converted my reservation on a First Edition to a confirmed order. The next step is to see the First Edition and drive it. The last step to lease it. Whether to lease or walk away will depend on the monthly payments.



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The negative of a Tesla Lease is, you can't buy the car at the end of the lease. Tesla is going to use expired lease cars as part of their robo car fleet. With Ford and the MachE lease, at least you have the option to buy the car at the end of the lease. AND you get the $7500 tax credit.
 

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The negative of a Tesla Lease is, you can't buy the car at the end of the lease. Tesla is going to use expired lease cars as part of their robo car fleet. With Ford and the MachE lease, at least you have the option to buy the car at the end of the lease. AND you get the $7500 tax credit.
Some points to consider:

  • The MachE Ford Option Plan will be about $180 more per month - not overall but each month. Over the term of the lease that is over $6,500 after taking into consideration the Federal Tax Credit. My figures in post #2 are including the Federal Tax Credit of $7.500.
  • In New York where I live, sales tax is computed on total of the lease payments plus any deposit. On the Tesla that would 36 months @$499 per month, $17,964 plus $4500 deposit, total $22,464. The tax would be $1,938
  • As the Ford Option plan is a sale, sales tax would be on the purchase price. I have ordered a First Edition, MSRP $60,400. The sales tax will be $5,210.
  • The difference in sales tax, $3,272 when divided by the term of the lease, 36 months, is $90 a month.
  • The total overall difference for me is almost $10,000!
  • If you are confident that after 3 years the MachE will be worth more than 43% of its MSRP and, this is quite important, compared to every other BEV out there three years from now and you still want the MachE, then the lease plan might make sense.
  • In N
I for one am not confident that the MachE will be worth more than 43% of its MSRP and I suspect that in three years after I lease the First Edition there will be other cars, including from GM, Tesla, Mercedes, BMW, that will have a greater range, charge faster and probably be less expensive than the MachE.

I understand that Musk has dreams of self driving cars and he intends to use the returned Model 3's and Model Y's in a fleet: That is his stated reason for not permitting buying his cars at the end of the lease.

I certainly do not have to go into detail or list all of the promises that Musk has made in the past. Most are hype, plain and simple. Having L4 fully autonomous driving in three years is, imo, nothing more than a dream.

But all that is really unimportant: all that is important is whether the MachE is worth nearly $10,000 more than a Model Y.

That is the decision we all have to make when asked to either buy or lease a MachE.
 

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Very interesting video. Thanks for sharing.

Like all spread sheets: they are mathematically accurate. What determines their usefulness is the data that is inputted.

If you believe that after 3 years either a Model 3 or a Model Y will lose only 23% of its value, then without a question is is cheaper to buy then to lease.

If you believe as I do that a residual of 77% on a three year old Model 3 or Y is totally unrealistic, then you are better off leasing.

Keep in mind that assuming a 77% residual after three years will always make buying cheaper than a lease:

  • The MF on a lease is 5.9% vs. 2.9% on a Tesla loan
  • The residual on the Model Y is 70% vs. KBB of 77%
For Everyone's information: the residual on a 36 month, 10,000 miles per year lease on both the Model S and X is 58%. At the end of the lease very few are bought indicating to me at least, that the cars are not worth the residual - there is no equity in the car.

Is there any reason to believe that when both the Model S and X are not worth 58% to then assume the Model 3 and Y will be worth 77%.

Personally, I cannot think of any.


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For informational purposes only, in the State of Nevada, sales tax is based on the value of the vehicle. That is the sales price if purchased or the cost of the lease divided by the term (number of months). If purchased the sales tax is due at the time of sale and if leased it is added on to the monthly lease amount. There is another factor however if the vehicle is purchased out right. Nevada rebates any "unused" portion of the sales tax when the vehicle is sold or traded in on a replacement vehicle.
One other point on the Tesla lease of $49,990 $499 a month, it's for a White Model Y only. Black is $600, Silver or Blue $1000 and Red is $2000 additional. As the video above states: Tesla's maintain a very high residual value due to very low depreciation. However that is meaningless if you can't buy out the lease. It's a worthy discussion to speculate on the what ifs however right now if Ford changes nothing it appears that the MMe will cost more than a similar (not identical) Tesla Y, with more choices from Ford on models, colors and configurations. The jury is still out for me on method of acquisition depending on money rates, and any changes/incentives offered at time of delivery.
 
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