Ford sales declined for the first time this year in October, during which the company navigated a six-week United Auto Workers strike and disappointing third-quarter earnings.
The automaker’s total vehicle sales declined 5.3% from October 2022 to 149,938, marking the brand’s first year-over-year decline of 2023. The number also represents a sudden 9.4% drop from September, which witnessed the first third of the UAW strike. Ford’s weakened performance was primarily driven by low sales of ICE vehicles, which fell 8.8% from the prior-year period and 10.6% from the previous month.
Despite this, Ford continued to see rising demand for its electric and hybrid lineups, although performance varied heavily between models. The automaker sold 6,831 EVs and 13,155 hybrids throughout October, year-over-year increases of 9.1% and 37.9%, respectively. The company’s F-150 Lightning accounted for more than half of its total EV sales, with deliveries improving 52.4% from last October. However, sales of the Mustang Mach-E declined 10.6% to 2,732 units despite rising to an all-time high of 5,872 units in September.
Ford’s numbers in October are anomalous in more ways than one. New vehicle sales were heavily constrained by limited production in 2022, as manufacturers had just begun re-opening factories in the wake of COVID-19. Since then, OEM output has substantially recovered, allowing automakers the opportunity to report multiple consecutive months of growth, even though sales and production have yet to reach pre-pandemic norms. Given that demand is no longer inhibited by manufacturing headwinds, it is surprising to see sales dip below their prior-year totals when they have been steadily trending upwards since January.
Furthermore, OEM executives, including those at Ford, have started to express weakening confidence in the electric vehicle market. Many have pointed to stagnating growth in the segment, even as they record massive increases in sales. As a result of these anxieties, several automakers have gone to the extent of postponing or even canceling billions of dollars in investments toward EV production. In this regard, Ford’s October report again seems to contradict industry-wide trends due to the high number of hybrid and electric vehicles sold throughout the month.
However, the company was faced with a problem in October it did not have earlier this year: the United Auto Workers strike. Even though the automaker was the first of the Detroit-Three to successfully negotiate a contract with union leaders, it still suffered through nearly six weeks of walkouts across its operations. While automakers and industry analysts are uncertain about the strike’s impact on production, it seems to have had a clear effect on Ford.
The strike may also explain the unexpected strength of the automaker’s EV lineup. United Auto Workers leaders intentionally targeted factories most crucial to Detroit-Three earnings, calling for walkouts at plants that either distributed essential parts or built high-profit-margin vehicles. Due to a lack of affordability and accessibility, EVs remain largely unprofitable for most OEMs. In August, Ford revealed it expects its electric vehicle division to lose $4.5 billion in 2023 alone. This made EV factories a low priority for the union, allowing automakers to continue building battery-powered cars.
