Why Ford’s F-150 Lightning is the legitimate start of the EV race – Kevin Tynan | Bloomberg Intelligence

First-quarter numbers are rolling in for many auto retail professionals and inventory still remains on everyone’s watchlist. Today on Inside Automotive, we’re pleased to welcome back Kevin Tynan, Bloomberg Intelligence’s Senior Automotive Analyst, who stays up to date on all things automotive. He joins the show to share his perspective on Q1 earnings and his outlook on electric vehicles coming to market.

Tynan starts the conversation by discussing the 14 million SAAR (Seasonally Adjusted Annual Rate). At first glance, it appears to be light, but considering that inventory is just over 1 million units per month, car dealers are selling out at alarming rates. Coming off of Q1 reporting from OEMs and dealer groups, Tynan says he doesn’t get any sense of urgency to produce more vehicles or change pricing power. Some companies might consider upsetting the balance of supply and demand by offering incentives to try and win market share. Still, Tynan says not even that scenario can change the balance.

We used to carry 4 million units of inventory that would roll into each month, says Tynan. For example, in the pre-pandemic days, a car dealer might carry 200 vehicles and have only 100 buyers. That leaves the dealer scrambling to sell the excess inventory with discounts, incentives, or aggressive lease deals. Today, there are 50 units and still 100 buyers. Pricing can and will stay strong as long as demand is still above supply.

This is the most dynamic time in automotive retail, says Tynan. The Ford F-150 lightning is the legitimate start of the EV race in his opinion. Up until this point, no other automaker was matching what Tesla did with electric vehicles. Full-size pickup trucks, by revenue, are by far the largest segment in the U.S. Ford recognized that this type of vehicle can be sold in high volume, unlike any that came before it.

Tesla might have had a headstart, but the company was not profitable until recently, explains Tynan. There was no competition for Tesla, and the build quality and ownership experience weren’t scrutinized against a legacy automaker.

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