For years, the most popular vehicle in the United States has been the F-150 truck from Ford Motor Company F. With higher gas prices and a high cost to fill up, the F-150 could see less demand and some consumers switching to the all-electric version, the F-150 Lightning.
What Happened: While gas prices have begun to come down in recent weeks, the $5 a gallon or more drivers were paying at the start of the summer left a big impression.
A report from the Washington Post showed that the cost to fill-up the gas tank on an F-150 truck was around $130 depending on the driver’s home state.
The increased gas prices also mean that fuel is representing a higher portion of disposable income and monthly bills for consumers. The report said gas now represents around 2.5% of monthly spending, in line with figures from 2014.
When factoring in gas and the cost of buying vehicles, the cost of owning a vehicle now represents 6.5% of disposable income, which is the highest level since 2013.
Monthly payments for an F-150 jumped from $800 a month in 2021 to around $1,050 today, according to the report.
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Why It’s Important: Rising gas prices could have an impact on several items for the automotive industry.
Trucks and SUVs have seen higher sales growth than cars over the years, something that could change with cars typically getting better gas mileage.
A shift to electric vehicles could get a big boost from higher gas prices, with consumers seeing savings on a monthly basis from buying an electric vehicle that may have a higher monthly payment, but not need hundreds of dollars in gas each month.
Ford reported electric vehicle sales were up 76.6% year-over-year in the month of June, with 4,353 units sold. The company reported it sold 1,837 F-150 Lightning electric pickup trucks in the month of June and has now sold 2,296 F-150 Lightning trucks since the vehicle launched.
While electric vehicle company Tesla Inc TSLA had an early lead in the electric vehicle space, traditional automotive companies like Ford and General Motors Company GM are shifting more and more to EVs.
There have been calls for an online sales model to be utilized by other automotive companies, following one of the things that made Tesla successful.
With rising gas prices and the higher cost of auto ownership, the traditional sales model could become a strength for a company like Ford that can allow customers to see in-person at a dealership how much they could save a month by buying an F-150 Lightning instead of a traditional F-150 vehicle, essentially using the high gas costs as an easy upsell at dealerships.
Photo: Courtesy of ford.com