Home News Ford Motor Cuts Prices for F-150 Lightning Electric Pickup Truck

Ford Motor Cuts Prices for F-150 Lightning Electric Pickup Truck

479
0

Ford Motor recently announced a significant price reduction for its popular F-150 Lightning all-electric pickup truck as part of its strategy to enhance production and increase supply. However, this move has not been well-received by the market, as Ford stocks witnessed a 5.7% decline on Monday, closing at $14.14. In contrast, the S&P 500 and Dow Jones Industrial Average experienced marginal gains of about 0.5% and 0.4% respectively.

The reactions from analysts are also mixed, with CFRA analyst Garrett Nelson lowering the price target for Ford stocks from $16 to $15 following this news. Meanwhile, Wedbush analyst Dan Ives emphasized the need for Ford to be more vigilant about the impending competition posed by the new Cybertruck.

Interestingly, Tesla (TSLA) made an announcement over the weekend that it successfully produced its first Cybertruck at its plant in Austin, Texas. While Dan Ives covers Tesla and has a favorable rating for its shares, he does not provide coverage for Ford stocks. His price target for Tesla is set at $300 per share.

In an attempt to boost sales, Ford introduced price cuts across its lineup of electric pickups, including the F-150 Lightning. The reductions range from approximately $6,000 to $10,000, resulting in a base model Lightning now priced at around $50,000 instead of the previous $60,000.

However, it is important to note that the average transaction price for an F-150 Lightning during the 2023 model year stands at approximately $87,000, according to Cox Automotive. This suggests that the average discount offered equates to approximately 9% off the original price.

While the market response may be skeptical, Ford has its own considerations for implementing these price cuts.

Ford Strives to Lower Prices and Shorten Wait Times for F-150 Lightning

In a recent news release, Marin Gjaja, the chief customer officer at Ford’s EV division, Model e, addressed the challenges faced by the company since the launch of the F-150 Lightning. Factors such as rising material costs and supply constraints have contributed to higher prices for the electric vehicle (EV) truck, affecting both Ford and its customers. However, Ford is actively working behind the scenes to enhance accessibility and affordability, aiming to reduce prices and minimize wait times for the eagerly anticipated F-150 Lightning.

Commodity prices, including lithium, also play a role in pricing adjustments. At the time of the initial Lightning deliveries, lithium prices stood at approximately $75,000 per metric ton─a vital component in the production of lithium-ion batteries that power EVs. However, the current price of lithium has dropped to around $45,000 per ton.

By taking steps to lower prices, Ford aims to bolster its delivery numbers. During the first half of 2023, Ford delivered approximately 8,800 Lightnings, marking a decrease from over 13,000 deliveries in the second half of 2022. This decline can be attributed to planned plant downtime and a battery issue encountered by the company.

As of now, Ford stock has experienced a notable increase of about 29% throughout this year.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

38  +    =  39