Ford Motor Co. on Monday announced a sharp reduction in the prices of its F-150 Lightning electric trucks, including a 17% cut for the base model, as it seeks to gain an edge over Tesla Inc. in the fast-growing EV market.
The Detroit-based automaker said it was able to lower prices after improving its scale and battery raw material costs. Ford, which had raised Lightning prices earlier this year, saw its EV sales drop 2.8% in the quarter through June.
The move comes amid a price war in the EV industry, sparked by Tesla a few months ago, which has hurt the sales of legacy automakers’ EVs.
“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.
Tesla, which dominates the U.S. EV market, said last week it built its first Cybertruck at its plant in Austin, Texas, after two years of delays.
“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.”
Ford also said it has temporarily closed its Rouge Electric Vehicle Center in Michigan to complete final plant upgrades as it aims to triple the facility’s annual run rate to 150,000 Lightning trucks, beginning this fall.
Analysts said Ford’s pricing strategy was crucial to improve its profitability and competitiveness in the EV market.
“Though pricing will always be a meaningful driver, getting from a $3 billion loss rate for the Ford Model e to breaking even will require the lion’s share to come from scale,” BNP Paribas Exane analyst James Picariello said.
Battery raw material prices have been one of the factors that pushed EV prices up. But prices of cobalt and lithium, key for EV batteries, have declined.
Ford has also strengthened its sourcing options and unveiled new supply deals for battery-grade lithium earlier this year.
The base Pro variant of Lightning now carries a suggested retail price of $49,995, compared with its prior price of $59,974, while the higher-end Platinum model will cost about 6.2% less, at $91,995.