Ford’s decision to cut prices can be attributed, at least in part, to the diminishing novelty of electric vehicles among many Americans, Cramer reportedly said.
Cramer, the host of CNBC’s Mad Money, also raised concerns about the potential for a cost-cutting spiral.
“One thing we do know after today is the bloom may be off the electric vehicle rose,” he remarked.
This had to happen eventually when there is mass adoption, Cramer said, adding “it just happened a little earlier than I expected.”
Cramer observed that EVs were “losing their excitement factor” for some potential buyers who have developed a sense of nostalgia for their “old-fashioned gas-powered” cars.
The stock picker added that prospective buyers are also exploring other options from EV makers such as Tesla, Inc. (NASDAQ:TSLA), Rivian Automotive, Inc. (NASDAQ:RIVN), and General Motors Corp. (NYSE:GM).
Cramer highlighted the positive aspect that the Ford F-150 Lightning is still priced higher than when it was announced in 2021.
However, he expressed concerns about Ford meeting its “aggressive” estimates, which are subject to uncertainty.
The analyst also noted the unfavorable timing of the price cuts, which coincided with Tesla’s announcement of producing its first Cybertruck. Notably, Cramer criticized the optics of Tesla’s Cybertruck, stating it was suboptimal.
Before Ford’s price reductions, Cramer tweeted, “While I am a huge believer in everything Musk save politics, I think the F-150 Lightning has more going for it than the Cybertruck.”
Tesla CEO Elon Musk responded to Cramer’s comments on Twitter, acknowledging the merits of the F-150 Lightning while emphasizing its relatively high cost, particularly in the context of the prevailing high-interest rate environment.
Cramer recently visited Ford’s facility and expressed his admiration, stating, “From what I saw today with my own eyes and what I’ve heard from CEO Jim Farley, I think American ingenuity and innovation here at Ford are undervalued, undervalued versus Tesla and possibly even everything else made in America.”
The shift in Jim Cramer’s stance on Ford’s F-150 Lightning price reduction reflects the evolving landscape of the electric vehicle market. Ford’s decision to cut prices due to the diminishing novelty of electric vehicles among consumers highlights the challenges faced by automakers to stay competitive in this rapidly changing industry.
The concerns raised by Cramer about a potential cost-cutting spiral and Ford meeting aggressive estimates underscore the uncertainty surrounding the future of electric vehicles. With Tesla’s Cybertruck announcement adding to the competition, the rivalry between traditional automakers and established EV giants intensifies, driving further innovation and price adjustments. The electric vehicle revolution continues, promising exciting developments and transformations in the automotive sector.
Ford closed Monday’s session 5.94% lower at $14.09, while Tesla rallied 3.20% to $290.38, according to Zenger News Pro data.
© 2023 Zenger News.com. Zenger News does not provide investment advice. All rights reserved.
Produced in association with Benzinga
Edited by Suparba Sil
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