Ford slashes prices of F-150 Lightning trucks as EV price war heats up
Ford Motor has intensified a price war in the electric-vehicle (EV) industry by reducing the prices of its F-150 Lightning trucks, including a significant 17% cut for the base model. The move is part of the company’s strategy to gain a larger share of the EV market that is currently dominated by Tesla. The announcement caused a dip in Ford’s shares by approximately 5%, while its rival General Motors and EV maker Rivian also experienced a decline of about 3% and 3.8% respectively.
Earlier this year, Ford had raised prices for its Lightning trucks but has now been able to lower them due to improvements in scale and reduction in battery raw material costs. This decision comes as a response to a price war initiated by Tesla a few months ago, resulting in the accumulation of legacy automakers’ EVs at dealerships due to slower sales. Ford’s EV sales fell by 2.8% in the second quarter of this year.
Marin Gjaja, chief customer officer at Ford Model e, explained, “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. We’ve continued to work in the background to improve accessibility and affordability, to help to lower prices for our customers and shorten the wait times for their new F-150 Lightning.”
In addition to the price reductions, Ford has temporarily closed its Rouge Electric Vehicle Center in Michigan to complete final plant upgrades. The goal is to triple the facility’s annual production rate to 150,000 Lightning trucks, starting this fall.
The decrease in EV prices can be attributed to the decline in prices of cobalt and lithium, which are crucial raw materials for EV batteries. Analysts predict further drops in commodity costs in the second half of the year.
To ensure a steady supply of battery-grade lithium, Ford has strengthened its sourcing options and revealed new supply deals earlier this year. The company aims to produce 2 million EVs by 2026.
As a result of these developments, the base Pro variant of the Ford F-150 Lightning now has a suggested retail price of $49,995, reduced from $59,974. Similarly, the higher-end Platinum model will cost approximately 6.2% less, at $91,995.
FAQs:
Q: Why did Ford lower the prices of its F-150 Lightning trucks?
A: Ford decided to reduce the prices in an effort to improve accessibility and affordability for customers and to reduce wait times for the F-150 Lightning. This move was in response to rising material costs, supply constraints, and competitive pressure from Tesla’s price-cutting strategy.
Q: How did Ford manage to lower the prices?
A: Ford achieved lower prices through improvements in scale and reductions in battery raw material costs. This allowed the company to pass on those savings to customers.
Q: Has Ford’s decision to lower prices affected its competitors?
A: Yes, the announcement resulted in a decline in Ford’s shares and also impacted rival companies such as General Motors and EV maker Rivian, causing their shares to fall as well.
Q: Did Ford make any other changes besides lowering prices?
A: In addition to the price reductions, Ford has temporarily closed its Rouge Electric Vehicle Center in Michigan to complete final plant upgrades. The company aims to triple the facility’s production rate to 150,000 Lightning trucks annually.
Q: Are there any predictions for further price drops in the EV industry?
A: Yes, analysts expect commodity costs, including cobalt and lithium, to decrease further in the second half of the year, which may lead to additional price reductions in the EV market.
Ford reduces prices of F-150 Lightning trucks amidst intensifying EV price competition
Ford Motor has launched a price war in the electric-vehicle (EV) industry with a significant cut in pricing for its F-150 Lightning trucks. The base model saw a 17% drop in price as Ford looks to increase its market share in an industry currently dominated by Tesla. As a result of this announcement, Ford’s shares dropped about 5%. General Motors, a rival carmaker, also experienced a decline of approximately 3%, while EV maker Rivian fell about 3.8%.
Ford, which had previously increased the prices of its Lightning trucks earlier this year, stated that it was able to lower prices due to improvements in scale and lower costs of battery raw materials. This move by Ford comes in the midst of a price war initiated by Tesla a few months ago. The competition has resulted in legacy automakers struggling to sell their EVs as they accumulate in dealerships.
Ford’s EV sales fell 2.8% in the second quarter of this year. Marin Gjaja, chief customer officer at Ford Model e, explained, “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. We’ve continued to work in the background to improve accessibility and affordability, helping to lower prices for our customers and shorten the wait times for their new F-150 Lightning.”
In addition to reducing prices, Ford also temporarily closed its Rouge Electric Vehicle Center in Michigan to complete final upgrades, as the automaker aims to increase the facility’s annual run rate to 150,000 Lightning trucks starting this fall. The cost of battery raw materials, such as cobalt and lithium, has been a major factor contributing to the rise in EV prices. However, analysts anticipate a decline in commodity costs in the second half of this year.
Ford has also taken steps to strengthen its sourcing options. Earlier this year, the company announced new supply deals for battery-grade lithium, as it strives to achieve its goal of producing 2 million EVs by 2026. The price reductions apply to all variants of the Ford Lightning model, with the base Pro variant now priced at $49,995, down from its previous price of $59,974. The higher-end Platinum model will also see a 6.2% reduction in price, now costing $91,995.
This move by Ford indicates the company’s determination to establish a stronger presence in the thriving EV market. As the industry becomes increasingly competitive, making EVs more affordable and accessible to consumers is a key strategy for automakers vying for market share.