Ford Motor’s CFO stated Wednesday that the corporate is not but seeing client demand for brand new autos drop off – however rising commodity prices have worn out the revenue it initially anticipated to make on its electrical Mustang Mach-E.

Demand for brand new Fords and Lincolns continues to exceed provide, which continues to be constrained by an ongoing international scarcity of semiconductor chips, Ford CFO John Lawler advised analysts at a convention hosted by Deutsche Financial institution – even after the corporate raised car costs to offset the results of inflation.

For probably the most half, these worth will increase have preserved Ford’s revenue margins, Lawler stated. However the worth will increase weren’t sufficient to offset the affect of rising prices on the corporate’s electrical Mustang Mach-E.

The mannequin noticed its prices enhance by roughly $25,000, a lot of that resulting from sharply greater battery materials prices. Whereas the Mach-E was worthwhile when it was first launched in late 2020, that is not true, he stated.

Regardless of the upbeat report on demand, Lawler famous one rising signal that buyers could also be reaching their inflationary limits: Ford Credit score, the corporate’s financing arm, has seen an uptick in “delinquencies,” or late funds.

Lawler stated Ford is taking the opportunity of a U.S. recession critically and that the corporate has modeled a number of potential situations for a downturn.

Nonetheless, Ford and the broader auto trade are in a special place at this time than in previous recessions, when the corporate sometimes held excessive inventories and elevated reductions that eroded margins, Lawler stated.

“We do not have that at this time,” Lawler stated. “We’re very lean on inventories. We now have an order financial institution that is vital at over 300,000 items. … As an trade and as an organization, we’re heading into this [possible recession] in a a lot totally different place than we have ever been in earlier than.”