In a bold move to challenge Tesla’s dominance in the electric-vehicle (EV) industry, Ford has intensified a price war by significantly reducing the prices of its F-150 Lightning trucks. The price cuts, which include a substantial 17% reduction for the base model, aim to bolster Ford’s market share in the highly competitive EV market.
Previously, Ford had raised prices for the Lightning earlier this year. However, thanks to improvements in scale and lower battery raw material costs, the automaker now finds itself in a position to slash prices. Ford’s EV sales for the quarter ending in June experienced a 2.8% decline.
This strategic maneuver comes amidst a price war initiated by Tesla several months ago, resulting in a surplus of legacy automakers’ EVs sitting on dealership lots as sales slow down.
Elon Musk, CEO of Tesla, acknowledged the value of Ford’s Lightning in a tweet but highlighted its relatively high cost, especially in light of current high interest rates for loans.
The Ford Lightning is a good vehicle, just somewhat expensive, especially given the high interest rates these days for any kind of loan
— Elon Musk (@elonmusk) July 17, 2023
Just last week, Tesla announced the completion of its first Cybertruck at its Austin, Texas plant, following a two-year delay.
Marin Gjaja, Chief Customer Officer at Ford Model e, explained the decision to reduce prices, stating, “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.”
Ford also revealed the temporary closure of its Rouge Electric Vehicle Center in Michigan. The closure aims to finalize crucial plant upgrades as Ford endeavors to triple the facility’s annual run rate to 150,000 Lightning trucks, starting in the upcoming fall season.
While competitive pricing remains essential, achieving a break-even point from a $3 billion loss rate for the Ford Model e will heavily rely on scaling operations, according to BNP Paribas Exane analyst James Picariello.
The surge in EV prices can be attributed, in part, to the escalating costs of battery raw materials. However, there is some relief on the horizon as prices for cobalt and lithium, essential components for EV batteries, have declined.
To fortify its position, Ford has proactively enhanced its sourcing options and forged new supply agreements for battery-grade lithium earlier this year.
As a result of these price adjustments, the base Pro variant of the Lightning is now available with a suggested retail price of $49,995, down from its previous price of $59,974. Additionally, the higher-end Platinum model will see a reduction of approximately 6.2%, bringing its price to $91,995.
