For the second time in two months, Ford (F) has hiked the price of its electric F-150 Lightning pickup.
Although this time it’s just for the base Pro model, the price hike of around 11% sends the base model to $51.974, from $46,974 before any federal or state tax credits.
In a statement, Ford said it was “adjusting the MSRP on the 2023 F-150 Lightning Pro due to ongoing supply chain constraints, rising material costs and other market factors.” Ford added that current retail order holders awaiting delivery and current commercial and government customers with a “scheduled order” would not be affected by the price hikes.
This is a similar pricing policy Ford used for customers who had existing orders and delivery dates back in August when Ford hiked prices across the F-150 Lightning range 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 debuted the F-150 Lightning and said the base pro model would come in under a $40,000 MSRP, it was a shot across the bow to the EV competition that Ford would use its engineering know-how, manufacturing efficiencies, and deep supplier relationships to win on pricing.
Now it seems reality is getting in the way of Ford’s pricing strategy.
“Being able to launch the model with a $40,000 price tag makes a big splash with the media, but that price was obviously not sustainable with today’s rate of inflation, especially when it comes to battery materials,” Sam Fiorani, VP of global vehicle forecasting at AutoForecast Solutions, told Yahoo Finance. “Supply chain issues and global inflation is causing all manufacturers to reevaluate their prices. Combine this with a high-profile model that was launched with established pre-inflation prices, and Ford had no choice but to make adjustments.”
As for whether Ford miscalculated its pricing strategy versus its competition, such as GM (GM) and Tesla (TSLA), Fiorani believes no automaker could have handled it better.
“The pricing pressures are industry wide. Tesla raised its prices recently, GM has backed off saying the Equinox would be under $30,000, [and] now they are saying it will be ‘around $30,000’,” he said. “From the time Ford announced pricing for the Lightning, inflation has hit the industry quite hard; it was just inopportune timing that they released the Lightning at this time.”
That being said, Fiorani believes the Lightning is the “perfect vehicle for Ford to absorb some of these added costs” because demand from early adopters is high, inventories of the vehicle are light, and factory space needed to make more of the Lightnings is limited .
It’s not all bad news for Ford, however. Fiorani says these higher prices will help Ford further fund its EV transition, perhaps in time help the company develop cheaper EVs down the road.
Pras Subramanian is a senior autos reporter for Yahoo Finance. You can follow him on twitter and ten Instagram.
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on twitter, Instagram, YouTube, Facebook, flipboardand LinkedIn