Ford (F) US sales rose 11.2% in May from a year ago. The numbers got a boost from EV and hybrid sales, both of which rose nearly 65% from May 2023.

CarGurus Director of Industry Insights and Analytics Kevin Roberts says that hybrids represent a "Goldilocks opportunity" for car buyers for a few reasons. One is that they tend to have a price point that is between that of an EV and a traditional internal combustion engine. Roberts also says that hybrids offer a good balance for those who want to be more environmentally friendly but still have range anxiety.

When it comes to Ford specifically, Roberts points to price declines in the Mustang Mach-E SUV and the F-150 Lightning, saying that as the price falls, "consumers are showing much more interest on that front."

Watch the video above to hear why Roberts says we're in a "resettlement period" for the EV market.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Stephanie Mikulich.

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Video Transcript

It was a busy day for the auto sector carmakers reporting monthly sales for May and Ford was a standout rising 11% compared to a year ago.

But if you look at hybrids and EVs sales of those vehicles soared 65% from last year.

Joining me now, Kevin Roberts Cargo is Director of Industry insights and analytics.

Kevin.

It is great to have you on the show.

So listen, I looked at these Ford numbers, Kevin and, and you know, they look solid us auto sales.

It popped 11% in May from a year earlier, but you are the pro Kevin.

So walk us through it.

Give, give me your reaction to this report.

Yeah, so we're seeing new inventory continue to grow and that's really helping to improve new vehicle sales.

And you're seeing that with the top line numbers, uh obviously, the hybrid and EV numbers are coming from an overall kind of smaller base compared to internal combustion engines, but definitely seeing positive growth there.

And I think the really interesting trend is that, you know, for so many years, it was all the focus was on evs and now I think hybrids are really starting to get their chance to shine uh in this spotlight and really look like they might be kind of the goldilocks kind of opportunity for consumers out there as we transition away from, you know, fossil fuels to electric vehicles.

Now, that's interesting, Kevin, because hybrids are hot and, and you kind of characterize there as goldilocks.

Why are they popular, Kevin?

And how is Ford kind of um capitalizing on that trend?

Yeah.

So hybrids tend to be at a price point that's somewhat in between uh evs and inter combustion engines.

So affordability is always a key fact for consumers when they're looking at vehicles.

So the affordability is there and then you deal with the fact that uh ranging and kind of concerns about the overall usability of evs and charging and our charging infrastructure and all that really kind of kind of holds back some of that kind of ev adoption where with hybrids, particularly hub plug in hybrids, you can get kind of the best of all worlds where you get the kind of uh reduction in greenhouse gas emissions and some of the utility that you get with evs.

But then you still have that internal combustion engine uh around for longer road trips and the like that can really be beneficial for consumers.

And let's talk about evs too, Kevin, you mentioned it there.

What is Ford's sort of tactic and strategy with that market?

It doesn't seem like it's a volume game?

Is it a cost gunning game?

What's the move for them?

Kevin?

So, what we've been seeing Ford do is we look at the, you know, which models are seeing the largest kind of price declines and particularly with the Ford F 150 lightning and the Mustang mach E, we've been seeing some pretty significant price declines on those new EV models.

And I think what you're seeing is as that price kind of gets reduced, consumers are showing much more kind of interest on that front.

We've seen that a lot with used dvs, in particular, the prices for used dvs have dropped quite significantly.

And as the prices really start to slow down for evs adoption and interest really starts to pick up in line with that.

And Kevin, I just want to get your thoughts on E the EV market in general not seeing the growth, Kevin that we used to.

What do you see ahead?

What jumpstarts this market?

Yeah, I, I think we're kind of in a kind of res resettlement period right now with evs where we had a lot of the early adopters who were very enthused to get into evs.

Now we're starting to get into that more kind of mainstream adoption.

I think it's a couple things.

Uh range is less of an issue than I think what people think it really comes down to charging the charging infrastructure needs to get much more in place for consumers to adopt a little bit more and the cost needs to come down, there still is a pretty significant cost premium for evs.

And once we get down to relative cost parity between evs and internal combustion engines vehicles, I think we'll see a much more uh faster adoption rate.

But until we get that charging infrastructure in place and the cost in line, I think it's gonna be a little bit more of a difficult challenge and that's where hybrids can really come in and help the auto manufacturers out.

Kevin, I wanna get you out of here on this.

Listen, we talked to evs, we talked hybrids, give me your take on on pickups beyond for just industry wide, Kevin as you look at that category, how healthy, how resilient.

Yeah, I mean, it's, it's definitely still really healthy from a sales volume point of view, but we are seeing as those inventory numbers I mentioned continue to grow.

We're seeing much more pickups get into the marketplace.

And so it would be really interesting to see if automakers are able to balance that kind of demand and production without having to uh increase incentives too much to kind of move those vehicles that are sitting on lots.

Kevin.

Great chat.

Thank you, sir for joining the show.

We appreciate it.

Thank you, my pleasure.