By Nathan Gomes
(Reuters) -Ford deepened a price war in the electric-vehicle industry on Monday by slashing the prices of its F-150 Lightning trucks, including a 17% cut for the base model, as it aims to boost its share of an EV market dominated by Tesla.
Ford’s shares closed down 6% at $14.09.
The Detroit-based automaker, which had raised Lightning prices earlier this year, said it was able to cut prices following improvements in scale and battery raw material costs. In the quarter through June, Ford’s EV sales fell 2.8%.
The move comes amid a price war started by Tesla a few months ago, which has seen EVs of legacy automakers piling up at dealers as sales slow.
“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.
Last week, Tesla said 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.
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, crucial 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.
(Reporting by Nathan Gomes and Shivansh Tiwary in Bengaluru; Additional reporting by Priyamvada C; Editing by Pooja Desai and Shounak Dasgupta)