Sales of Ford Motor Co.‘s F F-150 Lightning electric pickup truck seem to be sluggish, as evidenced by two recent developments. These occurrences could potentially affect Tesla, Inc. TSLA, which is about to launch its own electric pickup truck, the Cybertruck.
What Happened: Last week, Ford reportedly reduced its production capacity at its Rogue, Michigan plant, responsible for manufacturing the F-150 Lightning. The automaker also introduced discounts on certain F-150 Lightning variants.
Ford temporarily, but indefinitely, cut one of the three production shifts at the Rogue plant, starting on Monday. It clarified that this reduction was unrelated to the ongoing United Auto Workers union strike. This decision resulted in the elimination of 700 jobs, according to Reuters, and was primarily due to soft demand. Ford is now aiming to produce more gasoline-powered trucks.
A memo from the UAW, as cited by The Wall Street Journal, revealed that the decision to cut shifts was prompted by declining sales. “It doesn’t take a rocket scientist to figure out that our sales for the Lightning have tanked,” wrote a union leader in the memo.
Ford reported a 45.8% year-over-year decline in third-quarter F-150 Lightning sales, with only 3,503 units sold. Nevertheless, year-to-date sales showed a 40% increase to 12,260 units, compared to the 573,370 units of F-series trucks the company delivered overall during the same period.
In addition, Ford offered a substantial discount of $7,500 for purchasing or leasing its F-150 Lightning. The Platinum variant qualified for a $7,500 discount, while the Lariat had a $7,500 purchase discount and a $5,000 leasing discount. The XLT variant was eligible for a $1,500 reduction for either, while the Pro version had no discounts available.
This is the largest discount ever offered by Ford for the F-150 Lightning.
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Impact On Tesla: This slowdown in F-150 Lightning sales may have implications for Tesla’s upcoming Cybertruck. Although the Cybertruck has generated substantial excitement among the Tesla community, skeptics argue that its unique design may not resonate with traditional pickup truck users.
After meeting with investors, Morgan Stanley analyst Adam Jonas expressed concerns about the Cybertruck’s potential teething issues. If Tesla experiences delays or production challenges with the Cybertruck, it may need to announce further price cuts for its existing lineup, according to investors.
On the contrary, Future Fund‘s Gary Black is optimistic about the Cybertruck. He anticipates that it will generate a similar sales volume to the Model Y launch in 2021. Tesla is expected to introduce three variants, with the base model starting at $49,900, a pricing strategy comparable to Ford’s base variant, the Pro.
With macroeconomic uncertainties affecting consumer spending, Tesla faces a significant challenge. Despite reservations for the Cybertruck reportedly surpassing 2 million, the number of firm orders remains uncertain.
Tesla closed Friday’s session up 1.12% at $253.92, according to Benzinga Pro data.
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