Ford shares sink after steep price cuts for electric pick-up truck

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Ford led shares of electric-vehicle makers lower on Monday after announcing price cuts for its flagship electric pick-up truck, deepening the EV price war in the US.

The sticker prices of seven F-150 Lightning models would be reduced between $6,079 and $9,979, or between 6 per cent and 17 per cent, with the “Pro” base vehicle now falling below $50,000, the Dearborn, Michigan-based company said.

Market leader Tesla sparked a price war when in January it slashed prices for its own vehicles by up to $13,000. Ford responded by cutting prices for its flagship electric SUV, the Mustang Mach-E, only to have Tesla then discount its Model S and Model X vehicles in March.

The companies’ price cuts have, however, contributed to rising sales for both carmakers.

Ford sold nearly 15,000 electric vehicles from April to June, with F-150 Lightning sales jumping 119 per cent from the same period in 2022. Tesla delivered a record 466,000 in the second quarter. General Motors more than doubled its EV sales during the period to more than 15,000, but only announced in early June it would cut prices on some of its Bolt vehicles.

Ford on Monday cited increased plant capacity at its Rouge Electric Vehicle Center in Michigan, lower battery raw materials costs, and overall efforts to scale production as reasons for its latest price cut.

“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 Ford Model e chief customer officer Marin Gjaja.

“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.”

The Rouge plant is currently closed so that final plant upgrades can be made. Ford plans to triple its annual F-150 Lightning production rate to 150,000 starting this autumn.

Ford shares fell 5.9 per cent in New York, while GM dropped 3.1 per cent and Rivian ceded 3.3 per cent.

Tesla, however, gained 3.2 per cent as its Cybertruck went into production.