July 17 (Reuters) – Ford Motor Co ( FN ) deepened a price war in the electric-vehicle industry by cutting prices on its F-150 Lightning trucks on Monday. Its stake in the EV market is dominated by Tesla ( TSLA.O ).
Ford shares were down about 5% in afternoon trading. Rival General Motors ( GM.N ) fell about 3%, while EV maker Rivian ( RIVN.O ) fell 4%. Shares of Tesla rose 2% after the company built its first Cybertruck at its Austin plant.
The Detroit automaker, which raised Lightning prices earlier this year, said it was able to lower prices thanks to improvements in volume and battery raw material costs.
The move comes amid a price war launched by Tesla a few months ago that has seen the legacy automaker’s EVs pile up at dealers as sales slow. In the June-to-June quarter, Ford’s EV sales fell 2.8%.
“Shortly after the introduction of the F-150 Lightning, rapidly rising material costs, supply constraints and other factors raised the price of an EV truck for Ford and our customers,” said Marin Kjaja, chief customer officer, Ford Model e.
“We continue to work in the background to improve access and affordability.”
Ford said it temporarily closed its Rouge Electric Vehicle Center in Michigan to complete its final plant upgrades by early this fall, aiming to triple its annual run rate of 150,000 Lightning trucks.
While pricing will always be a meaningful driver, the lion’s share of revenue for Ford models to get from a $3 billion loss rate to breaking even, said BNP Paribas Exane analyst James Picariello.
Battery raw material prices are one of the factors driving up EV prices. But prices for cobalt and lithium, important for EV batteries, have fallen.
Ford has strengthened its sourcing options and announced new supply contracts for battery-grade lithium earlier this year.
The base Pro variant of the Lightning now costs $49,995 compared to a suggested retail price of $59,974, while the top-end Platinum model costs about 6.2% less at $91,995.
Reporting by Nathan Gomes and Shivansh Tiwari in Bangalore; Editing by Pooja Desai
Our Standards: Thomson Reuters Trust Principles.