Andrew Frick was looking on the bright side.
The vice president of Ford's (F) -) sales distribution said that the automaker had achieved “both best-selling brand and truck for six consecutive months this year on the strength of F-Series, vans, our new Escape and F-150 Lightning."
Ford second-quarter sales increased 9.9% from a year earlier, with sales of the F-Series trucks rising 34% during the second quarter compared with a year earlier.
Sales of the F-150 Lightning, the electric version of the company's iconic pickup, totaled 4,466 in the second quarter, more than double the just over 2,000 a year earlierk.
“Our EV sales continue to grow,” he said in a July 6 statement. “Improved Mustang Mach-E inventory flow began to hit at the end of Q2 following the retooling of our plant earlier this year, which helped Mustang Mach-E sales climb 110% in June.”
Ford’s second-quarter overall EV sales came to 14,843 vehicles, down 2.8% from the previous quarter.
Concerns About Affordability of EVs
The final assembly point for the Mach-E is at a plant in Cuautitlán Izcalli, Mexico, and during the first quarter the facility had been down for an extended period to implement plant changes and improvements.
Speaking on CBNC, Mark Fields, former Ford CEO, said the "moment of truth" for automakers was coming as they switch to EVs and contend with such issues as affordability and the rising price of electricity.
Fields said that "it's harder for consumers to charge your vehicle than to fill up a tank of gas right now, and that's weighing heavily."
Earlier this year, Fields told CNBC that Tesla (TSLA) -) was still the benchmark for the electric vehicle market.
Cox Automotive recently forecast that 1 million new electric vehicles will be sold in the U.S. this year, more than twice the volume sold in 2021.
But affordability continues to be the top obstacle for EV buyers, with 43% of those intending to buy saying that EVs are too expensive. That percentage is up slightly from 2021.
The Cox report also noted a significant gap in readiness between consumers and dealers in terms of embracing electric vehicles.
More than half (53%) of consumers surveyed felt EVs are the future and will largely replace gas engines over time, compared with less than a third (31%) of dealers.
Rising Raw-Materials Costs for EVs
“Ford is a leading US automaker and actively invests in autonomous technology, electric vehicle development, and connected car capabilities,” Wells Fargo analyst Colin Langan said in a July 5 research note..
“However, we believe that the rise in battery raw material costs has negatively impacted the outlook for [battery electric vehicle] profitability, and consequently, F's profitability," he said.
But most pressing, Langan said, is the expiration of the United Auto Workers contract on Sept. 14.
"We expect a contentious negotiation given new UAW leadership & high wage expectation," he said.
UAW President Shawn Fain said a key goal of the 2023 contract negotiations with Ford, General Motors (GM) -), and Stellantis (STLA) -) would be winning back cost-of-living adjustments, which were lost in 2009 due to the auto bankruptcies during the Great Recession.
“Now, the auto industry is back, and then some," Fain said in a statement. "In the past decade, the Big Three automakers have made a quarter of a trillion dollars in profits in North America. Meanwhile, autoworkers real wages have stayed flat, or even worse, they’ve regressed."
Ford did not immediately respond to a request for comment.
