In the escalating battle of electric vehicle pricing, Ford Motor has taken a strategic step by reducing the price of its F-150 Lightning trucks, a move aimed at bolstering its presence in the Tesla-dominated EV market. This decision led to a 5% drop in Ford’s shares, while General Motors and EV maker Rivian experienced a drop of 3% and 3.8% respectively.
Ford, which had previously increased Lightning prices due to rising costs, declared that they are now in a position to lower prices thanks to improvements in scale and reductions in battery raw material costs. This comes in the wake of a pricing war instigated by Tesla that resulted in a slowdown in sales and accumulation of other automakers’ EVs at dealerships. Consequently, Ford’s EV sales dwindled by 2.8% in the quarter through June.
“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,” said Marin Gjaja, Chief Customer Officer at Ford Model e. He continued, “We’ve continued to work in the background to improve accessibility and affordability.”
The company also announced a temporary halt in operations at its Rouge Electric Vehicle Center in Michigan. This is part of their efforts to amplify the annual production capacity to 150,000 Lightning trucks from this fall.
Though battery raw materials were a significant contributor to the hike in EV prices, Ford has reportedly benefitted from the decline in cobalt and lithium prices – both essential for EV batteries. Ford further strengthened its position by sealing new supply deals for battery-grade lithium earlier this year.
The price of the base Pro variant of Lightning has been adjusted to a retail price of $49,995, marking a substantial reduction from the previous $59,974. The premium Platinum model now stands at $91,995, approximately 6.2% cheaper than before. Ford’s new pricing strategy is a clear signal of their intent to hold their own in the intensifying EV market competition.
Photo courtesy of Ford Motor Co.