Ford Responds To Escalating EV Competition: F-150 Lightning Truck Prices Slashed

Ford slashed the prices of its F-150 Lightning trucks on Monday, including a 17% reduction for the base model, as it seeks to increase its part of an EV market dominated by Tesla.

Ford's stock finished 6% down at $14.09.

Ford's F-150 lightning truck prices slashed

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The Detroit-based manufacturer, which boosted Lightning prices earlier this year, said it was able to lower prices due to scale and battery raw material cost savings. Ford's EV sales declined 2.8% in the three months ending in June.

The decision comes amid a price war sparked by Tesla a few months ago, in which legacy automakers' EVs are building up at dealers as sales slump.

"The Ford Lightning is a good vehicle, just somewhat expensive, especially given the high interest rates these days for any kind of loan," Tesla CEO Elon Musk said in a tweet on Monday.

After two years of delays, Tesla said last week that it had manufactured its first Cybertruck at its plant in Austin, Texas.

"Shortly after launching the F-150 Lightning, rapidly rising material costs, supply constraints and other factors drove up the cost of the EV truck for Ford and our customers," Marin Gjaja, chief customer officer at Ford Model e, said on Monday.

"We've continued to work in the background to improve accessibility and affordability."

Reuters

Ford also announced that it has temporarily closed its Rouge Electric Vehicle Centre in Michigan to finish final plant enhancements, with the goal of tripling the facility's annual run rate to 150,000 Lightning vehicles starting this autumn.

Though pricing will always be a factor, going from a $3 billion loss rate for the Ford Model e to break even will require the majority of the savings to come from scale, according to BNP Paribas Exane analyst James Picariello.

Battery raw material prices are one of the factors driving increasing EV prices. However, cobalt and lithium costs, which are critical for EV batteries, have fallen.

Reuters Graphics

Earlier this year, Ford expanded its sourcing choices and announced new supply agreements for battery-grade lithium.

The base Lightning Pro model now has a suggested retail price of $49,995, down from $59,974, while the higher-end Platinum model will cost approximately 6.2% less, at $91,995.

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