CarBikesOnline

Lightning Price Cuts Cause Ford Stock to Plummet by $3.6B in a Single Day

Overview

The all-electric F-150 Lightning truck’s recent price cuts resulted in a significant market reaction for Ford. The company’s stock value plummeted by $3.6 billion in just one day due to investor dissatisfaction. The price reductions, averaging nearly $10,000 for the base model, were implemented amidst improved chip availability and lower battery material costs. However, this move contradicted Ford’s earlier statements about avoiding commoditized EV segments. The decision coincided with Tesla’s stock surge ahead of the Cybertruck’s anticipated launch. Despite benefiting customers, the drastic stock drop highlights the challenges of navigating the electric vehicle market’s competitiveness and pricing dynamics.

Ford Slashes F-150 Lightning Prices,

Ford suffered a significant blow to its market value, losing a staggering $3.6 billion in just one day due to investor dissatisfaction with recent price cuts on the all-electric F-150 Lightning truck. This drop of 5.9 percent marked the largest decline in five months for the American automaker, according to Automotive News.

The price reductions, totaling nearly $10,000 for the base model of the Lightning, were implemented in response to improved availability of computer chips and reduced costs of battery materials like lithium and nickel. These cuts came after a series of price increases caused by the global chip shortage and higher material expenses.

The timing of the price cuts is noteworthy, as they occurred just before the anticipated commercial launch of the Tesla Cybertruck in the third quarter, potentially in September. Interestingly, while Ford experienced a negative impact from the price cuts, Tesla’s stock price surged, doubling throughout the year, partly driven by impressive deliveries in previous financial quarters.

This decision by Ford contradicts earlier statements made by CEO Jim Farley in May, where he indicated the company’s intention to avoid segments of the electric vehicle market that were becoming too competitive and focus on those with stronger pricing power.

Advantages

While the price reductions make the all-electric F-150 more accessible to customers, they still come with a caveat. The cheapest variant, the Pro model, remains about $10,000 more expensive than its initial price when it was launched in January 2022. On the other hand, the most expensive trim, the Platinum, has somewhat come closer to its price at the beginning of 2022, now starting at $91,995 compared to $90,874 back then.

The production capacity for the electric F-150 is set to undergo upgrades at the Michigan factory, leading to a target of manufacturing no less than 150,000 Lightnings annually, triple the previous production rate.

In the past month, Ford sold 1,424 battery-powered pickups in the United States, with a total of 4,466 units sold during the second quarter.

Ford Slashes F-150 Lightning Prices,

You Might also Like