Ford Motor Co (NYSE:F) CEO Jim Farley shed more light on why the company cut the price of its F-150 Lightning electric pickup earlier this month at the company’s earnings call on Thursday.
The CEO explained that the company cut the price of the F-150 Lightning to create an order bank for a tripling in production.
“We didn’t cut the price of the F-150 by $10,000 to create an order bank for our current production rate. It’s for a tripling,” the CEO said.
Earlier this month, Ford cut prices on its least expensive version of the F-150 Lightning by $9,979. Several other trim packages were cut between $8,479 and $9,479 and its most expensive platinum trim model was cut by just over $6,000.
Ford is using its strategies on the F-150 Lightning like Tesla did for all of its models.
Tesla reported an uptick in sales that included a financial loss in revenue for the company.
Sales for the Model 3 and the Model Y increased due to the price cuts. Ford is looking to the same strategy for the F-150 Lightning.
The company said then that its Rouge Electric Vehicle Center in Michigan will seek to triple its annual run rate to 150,000 F-150 Lightning trucks beginning this fall following an upgrade.
“The ramp on F-150 in September is really significant. We always knew that we had to build an order bank that looked nothing like the original F-150 Lightning order bank because our production is tripling,” said Farley.
The cut brought the tag on the vehicle down and closer to $50,000, but it is still above the Lightning’s launch price.
The premium version of the Lightning, the extended-range Platinum trim, will now start at about $92,000, down from just over $98,000.
Several analysts have pegged the price cut to an impending price announcement by Tesla (NASDAQ:TSLA) for its upcoming Cybertruck. The Cybertruck is expected to be up against the Lightning and Rivian Automotive’s electric trucks R1T and R1S.
“While Ford said the cuts reflect improvements in scale and battery raw materials costs, we believe Ford wanted to get in front of imminent Tesla Cybertruck pricing for the September delivery event,” Future Fund Managing Partner Gary Black said.
Ford is scheduled to report its second-quarter earnings after July 27.
Produced in association with Benzinga