Why Ford had ‘no choice’ but to hike F-150 Lightning prices again: analyst

For the second time in two months, Ford (F) has raised the price of its F-150 Lightning electric pickup.

Although this time it’s only for the base Pro model, the price hike of around 11% sends the base model to $51,974starting at $46,974 before any federal or state tax credits.

In a statement, Ford said it was “adjusting the MSRP of the 2023 F-150 Lightning Pro due to continued supply chain constraints, rising material costs and other market factors.” Ford added that current holders of retail orders awaiting delivery and current commercial and government customers with a “planned order” would not be affected by the price increases.

This is a similar pricing policy used by Ford for customers who had existing orders and delivery dates in August when Ford increased prices for the F-150 Lightning line by $6,000 and $8,500. depending on trim level. If a customer had a pre-order but no delivery date, the customer would be subject to new pricing.

Back when Ford launched the F-150 Lightning and said the base Professional model would be lower than an MSRP of $40,000, it was a boost to EV competition that Ford would use its knowledge -do in engineering, its manufacturing efficiency and deep supplier. relationships to win on prizes.

Now it looks like reality is getting in the way of Ford’s pricing strategy.

Ford CEO Jim Farley speaks during the official launch of the all-new Ford F-150 Lightning electric pickup truck at the Ford Rouge Electric Vehicle Center in Dearborn, Michigan, U.S., April 26, 2022. REUTERS/Rebecca Cook

“Being able to launch the model with a $40,000 price tag is causing a stir with the media, but that price obviously wasn’t sustainable with the current rate of inflation, especially when it comes to battery materials,” Sam said. Fiorani, Vice President of Global Vehicle Forecasting. at AutoForecast Solutions, told Yahoo Finance. “Supply chain issues and global inflation are causing all manufacturers to reassess their prices. Combine that with a premium model that launched with pricing set before inflation, and Ford has had no problems. no choice but to make adjustments.

As to whether Ford miscalculated its pricing strategy compared to competitors, such as GM (GM) and Tesla (TSLA), Fiorani thinks no automaker could have handled it better.

“Pricing pressures affect the entire industry. Tesla recently hiked prices, GM backed off saying the Equinox would cost less than $30,000, [and] now they say it will be ‘about $30,000,’” he said. “From the time Ford announced Lightning pricing, inflation has hit the industry pretty hard; it was just an inopportune moment that they took the Lightning out then.

That being said, Fiorani thinks the Lightning is the “ideal vehicle for Ford to absorb some of those extra costs” because early adopter demand is high, vehicle inventories are light, and the factory space needed to manufacture more. of Lightnings is limited. .

It’s not all bad news for Ford, however. Fiorani says these higher prices will help Ford further fund its transition to electric vehicles, perhaps over time helping the company develop electric vehicles that are cheaper on the road.

Pras Subramanian is senior automotive reporter for Yahoo Finance. You can follow him on Twitter and on instagram.

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Robert M. Larson