July 17 (Reuters) – Ford Motor ( UN ) stepped up a price war in the electric car industry on Monday by cutting prices on its F-150 Lightning trucks, including a 17% cut for the base model, as it aims to increase its share of an electric car market dominated by Tesla (TSLA.O).
Shares in Ford fell around 5% in afternoon trading. Rival General Motors ( GM.N ) also fell around 3%, while electric car maker Rivian ( RIVN.O ) fell around 4%. Tesla shares rose 2% after the company built its first Cybertruck at the Austin plant.
The Detroit automaker, which had raised Lightning prices earlier this year, said it was able to cut prices on improvements in scale and battery raw material costs.
The move comes amid a price war started by Tesla a few months ago, which has seen the older automaker’s electric cars pile up at dealerships as sales slow. In the quarter through June, Ford’s EV sales fell 2.8%.
“Shortly after the launch of the F-150 Lightning, rapidly increasing material costs, supply constraints and other factors drove up the cost of the electric vehicle for Ford and our customers,” said Marin Gjaja, chief customer officer, Ford Model e.
“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 upgrades to the facility as it aims to triple the facility’s annual run rate to 150,000 Lightning trucks, starting this fall.
While 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, said BNP Paribas Exane analyst James Picariello.
Battery raw material prices have been one of the factors that pushed electric car prices up. But the prices of cobalt and lithium, crucial for EV batteries, have fallen.
Ford has also strengthened its procurement capabilities, unveiling new supply agreements for battery-grade lithium earlier this year.
The base Pro variant of the Lightning now has a suggested retail price of $49,995, compared to the previous 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; Editing by Pooja Desai
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