In a move that surprised industry observers, Ford Motor Co. announced on July 17 that it would be lowering the sticker prices of its F-150 Lightning electric pickup trucks by thousands of dollars. The decision comes as the company ramps up production capacity, benefits from falling costs of battery raw materials, and undertakes internal efforts to streamline production.
The price cuts, ranging from a few thousand dollars to as much as $10,000, are expected to intensify the competition in the electric vehicle (EV) market, prompting concerns of a potential price war among manufacturers. As news of the price reduction broke, shares of Ford Motor Co. took a hit, declining by 5% on July 17.
The timing of the announcement coincided with Tesla's revelation that its first production Cybertruck electric pickup had finally rolled off the assembly line. However, with little information available about its pricing, Ford's move to lower the prices of its F-150 Lightning trucks takes on added significance.
Rivian, another prominent player in the electric pickup segment, has also been making waves recently. The company reported a nearly tripled number of deliveries in the second quarter, leading to a surge of over 41% in its stock price this month. Analyst Dan Ives from Wedbush observed that Ford seems to be reacting to the growing competition posed by Cybertruck and Rivian.
Ford has been enjoying strong demand for its F-150 Lightning, with sales more than doubling in the second quarter compared to the previous year. To meet this increasing demand, the automaker has been making significant upgrades to its Rouge Electric Vehicle Center in Michigan. The completion of these upgrades is expected to enhance production capacity and enable Ford to offer more built-to-order trucks as early as October.
As part of the price adjustment, the entry-level Pro model of the F-150 Lightning will now have a manufacturer's suggested retail price (MSRP) of $49,995, down by approximately $10,000. The high-end Platinum Extended Range version saw its price decrease from $98,074 to $91,995, a reduction of over $6,000.
Marin Gjaja, Chief Customer Officer at Ford Model E, explained that the company had been facing challenges such as rising material costs and supply constraints, which had driven up the cost of the F-150 Lightning for both Ford and its customers. However, Ford has been working diligently behind the scenes to improve accessibility, and affordability, and reduce wait times for customers eager to purchase the F-150 Lightning.
This move by Ford comes after a series of price cuts initiated by Tesla in recent months, as competition in the EV market continues to intensify. In January, Ford responded to Tesla's price cuts by reducing the price of its Mustang Mach-E electric SUV by up to $6,000.
Although Tesla initially stated that the Cybertruck would be available in three versions, with prices ranging from approximately $40,000 to $70,000, the company later removed the pricing information from its website. This further fuels anticipation and speculation about the competitive pricing strategies among electric pickup manufacturers.
In a surprising partnership earlier this year, Ford CEO Jim Farley and Tesla CEO Elon Musk announced that Ford's current and future electric vehicles would have access to Tesla's extensive Supercharger network of about 12,000 stations in the United States and Canada, starting in the spring of 2024. Additionally, commercial customers will have access to Ford Pro Charging solutions, facilitating convenient charging options for the F-150 Lightning at home or work.
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