Ford Cuts Price of the F-150 Electric Lightning as Demand Weakens

After struggling to find enough batteries and other parts for the past two years, automakers are finally starting to mass-produce electric cars and trucks. More than 30 new models will hit showrooms this year.

What they need now are more customers.

While sales of electric vehicles are on the rise — they jumped about 48 percent in the second quarter from a year earlier — they are not rising fast enough to keep up with the number of vehicles rolling off the assembly lines. Inventories of unsold cars began to build up.

More than 90,000 battery-powered cars and trucks are on dealer premises, four times the number a year ago, according to Cox Automotive, a market research firm. That’s enough for 103 days at the current rate of sales, compared to about 50 days for the industry as a whole.

Manufacturers are “going through a ‘field of dreams’ moment,” said Jonathan Gregory, Cox’s senior director of economic and industry insight. “They’ve built up an EV inventory, but now they’re waiting for buyers to come.”

In light of this imbalanced supply and demand, automakers are lowering prices and offering more incentives. On Monday, Ford Motor Co. slashed the prices of its electric F-150 Lightning pickup truck by $6,000 to nearly $10,000, or as much as 17 percent in some versions. The company is also offering interest rates as low as 1.9 percent to 3.9 percent on certain loans for Lightning purchases.

The moves follow several rounds of price cuts by Tesla, the dominant seller of electric cars. Tesla’s earlier price cuts prompted Ford to lower the prices of its Mustang Mach-E electric SUV, though that didn’t bring Mach-E stock back up to sales.

At the end of June, Ford dealerships had 16,400 of this model in stock—about 2,000 more than they sold in the first six months of the year.

While many consumers express interest in electric vehicles, they are often not ready to buy. Many people have been put off by the high price of electric cars and expect them to cost no more than comparable gasoline models — something that could accelerate the pace of recent price cuts.

Other car buyers have concerns about how far these cars and trucks can go at full cost. Many of the models now available need to be recharged after traveling 200 to 250 miles. Uncertainty about finding charging stations and how long it takes to charge vehicles can put some people off.

Glenn Staub, a personal trainer from White Plains, New York, said he wants to buy a hybrid or all-electric vehicle because of the potential environmental benefits and savings on fuel costs. But it won’t be on the market until the 2014 Toyota Corolla comes out.

“My policy on keeping cars is to drive them until they are no longer serviceable,” he said. It may not be for a few years. Has driven Corolla with just under 100,000 miles and runs fine.

Sales are becoming particularly slow for higher-priced luxury models—a market segment with an abundance of options from the likes of Tesla, Mercedes-Benz, BMW, Porsche, and Lucid Motors. Many of these cars cost $75,000 to $160,000.

“I think there’s been a lot of buzz around electric cars, and people have done their research and realized they’re luxury cars, not cheap ones,” said Rick Rikaart, president of Rikaart Automotive, which owns nine new car franchises in Dublin. Ohio. “And there was some backtracking.”

Mr. Rikaart said his family’s Ford store has had a high-quality F-150 Lightning Platinum truck on sale for $92,000 for more than two months. “A year ago, it would have been sold now,” he said.

Another group of electric cars struggling to find buyers are those that no longer qualify for the $7,500 federal tax credit under the Inflation Reduction Act, President Biden’s ambitious climate change law. The credit is only available for vehicles assembled in North America that include a certain percentage of battery materials from the region or from US trading partners.

In addition to these restrictions, electric sedans must sell for $55,000 or less to be eligible for credits, and SUVs, vans, and vans must sell for $80,000 or less.

Purchases of Ford Lightning trucks make buyers eligible for a $7,500 credit, and the company plans to sell more pickups in the coming months. The company paused production this year to modernize the assembly line and ramp up production. By the fall, the company expects the Rouge Electric Vehicle Center near Detroit to be able to produce 150,000 Lightnings a year, three times its current production capacity.

The company’s decision to lower prices may also have something to do with the growing competition in the electric car industry. Tesla said Saturday it has begun production of its much-delayed Cybertruck minivan, and General Motors is expected soon to begin delivering an electric version of the Chevrolet Silverado pickup.

Ford began making the Lightning in the spring of 2022 and raised prices several times to a total of about $20,000, citing an increased cost of raw materials for its batteries. At the time, demand far outstripped Ford’s production, and some dealers were charging thousands of dollars more than the company’s suggested retail price.

“Soon after the launch of the F-150 Lightning, rapidly increasing material costs, supply constraints and other factors made the EV truck even more costly to Ford and our customers,” said Maren Gaja, chief customer officer for the automaker’s electric vehicle division. in the current situation. “We’ve continued to work in the background to improve accessibility to help lower prices for our customers and shorten wait times.”

The company’s decision to cut prices worried investors who feared it would hurt Ford’s profits, and its share price fell 6 percent on Monday.

Ford said the Pro model of the F-150 Lightning is now at a list price of $49,995, a reduction of $9,979. The XLT 312A model with extended range battery has been reduced from $8,879 to $69,995. The top-of-the-line Platinum Extended Range model will retail for $91,995, $6,079 less than last week’s price.

As a result of the price cuts, most Lightning models will cost less than $80,000, making them eligible for a $7,500 federal tax credit.