The base variant of Ford’s electric F-150 truck now starts at $59,974, excluding shipping and taxes, up nearly 50 per cent from its starting price when launched last year (all figures US$).

The Detroit automaker resumed production of the F-150 Lightning earlier this month after recalling 18 electric trucks due to a battery-cell manufacturing defect.

Ford’s hike comes after EV maker Tesla ignited a price war this year by aggressively trimming prices.

A week earlier, Ford said its electric-vehicle business unit was expected to lose $3 billion this year, but remained on track to achieve a pretax margin of eight per cent by late 2026.

The company was not immediately available for further comment on the price increase, which was first reported by Automotive News on Thursday.

— Reporting for Reuters by Kannaki Deka and Nathan Gomes in Bangalore.

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The automaker has raised prices for its electric pickup trucks twice in a span of three months, as it navigates higher costs and supply chain snags.

Automakers across the globe, including Tesla and Rivian Automotive, are also struggling with higher prices of raw materials such as lithium and have warned that high costs were here to stay.

Ford, which has previously said it was targeting annual production of 150,000 Lightning pickups by the fall of 2023, did not immediately respond to a Reuters request for a comment on the price hike.

The company’s shares were down about 3.5 per cent in afternoon trade amid declines in the broader market.

It was, however, not immediately clear when the price hike occurred.

The move comes on the heels of the automaker adding a third work crew at an assembly plant near Detroit as it boosts production of its F-150 trucks.

— Reporting for Reuters by Nathan Gomes in Bangalore.

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The automaker said prices for its 2023 F-150 lightning will be increased in the range of $6,000 and $8,500 depending on the variant, with the cheapest Pro model now priced at about $47,000 (all figures US$).

Customers who have ordered the truck and now await delivery will not be impacted by the price hike, Ford added.

Dearborn, Michigan-based Ford said last month it was expecting commodity costs to rise by $4 billion this year and that it would offset them by raising prices.

Prices of raw materials such as lithium used in batteries have jumped of late, as auto companies such as Tesla and EV pickup maker Rivian rush to secure supplies to avoid disruptions to production.

Earlier in June, General Motors raised prices of its Hummer EV pickup truck to mitigate higher commodity and shipping costs.

— Reporting for Reuters by Shivansh Tiwary in Bangalore.

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The changes come a day after the Detroit automaker warned a chip shortage would lead to a decline to vehicle volume in the current quarter.

Production at factories in Michigan, Chicago and in Cuautitlan, Mexico will be suspended. In Kansas City, production of F-150 pickup trucks will be idled while one shift will run for production of its Transit vans.

The Detroit automaker will also run a single shift or a reduced schedule at its factories in Dearborn, Kentucky and Louisville, while removing overtime at its Oakville factory in Ontario. The Oakville plant currently makes Edge and Lincoln Nautilus SUVs.

All changes will be in place for the week beginning Feb. 7.

Ford shares slumped on Friday, after the automaker posted smaller-than-expected quarterly income and forecast a slower recovery in 2022 vehicle production than rival General Motors.

However, the company said it expected vehicle volume to improve significantly in the second half.

— Reporting for Reuters by Hyunjoo Jin and Ben Klayman.

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Ford officially unveiled the battery electric F-150 Lightning model on Wednesday evening, after giving it a cameo appearance during President Joe Biden’s visit on Tuesday to the Rouge manufacturing complex at Dearborn, Michigan, where the trucks will be assembled beginning next year.

Based on customer response, Ford has already moved to increase planned manufacturing capacity for the electric F-150 by “tens of thousands” of vehicles a year, Ford’s head of Americas and international markets, Kumar Galhotra, told Reuters ahead of Wednesday’s official debut. He did not disclose the new production targets.

Ford, which already debuted its first hybrid powertrain for an F-150 in the 2021 model year, expects to boost annual production of the fully electric F-150 to 40,000 vehicles or more, starting in 2023, according to Sam Fiorani, head of global vehicle forecasting at AutoForecast Solutions.

Ford executives said ahead of Wednesday’s debut they have a different strategy for selling electric trucks and vans in volume from Tesla or General Motors.

Where Tesla and GM are positioning their initial electric pickups as lifestyle vehicles for the affluent, Ford executives said they are focused on convincing commercial fleet operators — a market Ford dominates — that the F-150 Lightning and electric Transit are cost-effective, rational choices.

“That’s the only way you can build up the volume,” said Ted Cannis, Ford’s general manager for commercial vehicles.

Competition

The electric F-150 and an electric version of Ford’s Transit van due out late this year look like, and share many components with, the gasoline versions that are top-selling profit machines for the No. 2 U.S. automaker.

A “commercial base” version of Ford’s F-150 Lightning will start at $39,974 before tax credits, including a $7,500 federal tax credit Ford buyers can still get and Tesla and GM buyers cannot (all figures US$). That price is about $10,000 more than the cheapest gasoline-fueled F-150.

Besides an estimated 370 km of range, the base F-150 Lightning comes with a 39.37 cm Tesla-style dashboard screen, a roomy “frunk” storage space where the gas engine would be, and enough plugs and juice to power a construction site for up to three days, Ford officials said.

A Lightning XLT model, which aligns with the best-selling version of the gasoline F-150, will start at $52,974, Ford said. That is 51 per cent higher than the gasoline XLT’s base price.

Ford plans more expensive versions of the F-150 Lightning, including a “Platinum” model with an extended-range battery likely to be priced around $90,000.

Tesla’s electric Cybertruck, which looks like it rolled off the set of a science-fiction movie, is due to begin high-volume production in 2022, and its price will start at $39,900. GM’s first electric pickup is an “electric supertruck,” the GMC Hummer EV, priced from $79,995 to nearly $100,000. High-volume production will begin in fall 2022, after a small initial run of trucks this autumn.

GM plans to introduce a Lightning competitor, the Chevrolet Silverado EV, in late 2022, Fiorani said. It will be built on a dedicated electric vehicle platform that it shares with the upcoming Hummer EV, GM has said.

GM is also moving into the electric delivery van segment with a new unit, BrightDrop, and a new purpose-built electric van.

Ford is using a heavier-gauge steel for the frame of the F-150 Lightning, but did not undertake a complete redesign to integrate the battery pack into the chassis.

By staying close to the current model, Ford can offer the electric truck sooner, at a competitive price “and make money on it,” said Darren Palmer, general manager for Ford’s electric vehicles.

Ford plans to offer software-enabled services to fleet and business customers, such as tracking driver behaviour, predicting maintenance and planning delivery routes, said Ford’s Cannis.

Once Ford starts charging for these services, “then you’re in the subscription game,” Cannis said.

— Reporting for Reuters by Joe White in Detroit; additional reporting by Paul Lienert in Detroit.

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The No. 2 U.S. automaker said it will run one of three shifts of production at its Dearborn truck plant the week of Feb. 8, while the truck portion of its Kansas City assembly plant will run two of three shifts of production during that week. Both are expected to return to three shifts the following week.

Ford declined to say what part or supplier were involved or how much volume would be lost.

Global automakers have been caught off guard by the shortage of crucial semiconductors, used for everything from computer management of engines to driver-assistance features such as emergency braking. Other automakers hit by the shortage include General Motors, Volkswagen, Toyota, Nissan and Subaru.

Up to now, automakers have largely focused on cutting production of less profitable vehicles as they manage through the shortage, but Ford cutting output of its high-profit trucks will raise concerns the impact is spreading.

Ford spokeswoman Kelli Felker declined to address why the F-150 had been affected, but the Dearborn, Michigan-based company may discuss the matter further when it reports fourth-quarter earnings after the market closes on Thursday.

Felker said the automaker was “working closely with suppliers to address potential production constraints tied to the global semiconductor shortage and working to prioritize key vehicle lines for production.” Ford has previously cut other production because of the issue.

Also on Thursday, union sources told Reuters that automaker Stellantis will slow production at its Melfi plant in Italy next week due to a shortage of microchips and other parts and will put over 7,000 workers on furlough. Mazda said it expected a production cut of 7,000 vehicles this month as a result.

On Wednesday, GM said it would cut production at four of its plants due to the chip shortage.

On Tuesday, a group of 15 U.S. senators including majority leader Chuck Schumer and Republican John Cornyn urged the White House to work with Congress to address the global semiconductor shortage hitting auto manufacturing.

— Reporting for Reuters by David Shepardson in Washington, D.C. and Ben Klayman in Detroit.

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Ford said select 2011-2013 model year trucks with six-speed automatic transmission could experience an unintended downshift into first gear without warning, which could result in the loss of vehicle control. Ford is aware of five accidents, including one report of whiplash potentially related to the issue.

The recall covers 1.26 million trucks in the U.S. and 221,000 in Canada. Dealers will update the powertrain control software and the company will notify customers next month.

In March 2016, Ford recalled 153,000 U.S. 2011-2012 Ford F-150, Ford Expedition and Lincoln Navigator vehicles for a similar transmission downshift problem. Ford spokeswoman Monique Brentley said the root cause was different than in the new recall.

In December 2017, the National Highway Traffic Safety Administration opened an investigation into whether that recall should be expanded by nearly 1.4 million 2011-2013 vehicles after 123 complaints and two crashes but no reported injuries.

The agency said an unexpected downshift “can cause the vehicle to slow down suddenly and without warning. This can also cause the rear tires to skid or lock up, increasing the risk of a crash.”

The investigation is pending.

Ford also said it is issuing two other recalls. One covers 28,200 2017-19 Lincoln Continental vehicles in North America for door latches that may not engage due to the buildup of silicon contamination and could result in the door opening while driving.

Ford said it was not aware of any reports of accidents or injuries. Dealers will replace the door latch assemblies in all four doors.

Ford is also recalling 4,200 2019 model Ford Mustang, Lincoln Nautilus and Lincoln Navigator vehicles for instrument panel cluster assemblies that are blank when the vehicles are started. Dealers will update the software. No crashes are reported linked to the recall.

— Reporting for Reuters by David Shepardson and Ben Klayman.

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The second-largest U.S. automaker said it was aware of 17 reports of smoke or fire in the United States and six in Canada relating to seat-belt pretensioners, but was not aware of any accidents or injuries as a result. The mechanism of the pretensioner, which works in tandem with air bags, involves an explosive charge that locks a seat belt in place during a crash.

Some pretensioners in front seat belts could generate excessive sparks when deployed, resulting possibly in a fire, the company said.

The recall comes after the National Highway Traffic Safety Administration (NHTSA) opened a preliminary investigation in August into 1.6 million Ford trucks after five complaints of fires in the seat belt component, including three vehicles destroyed by fires.

Owners should “take action” when they receive recall notices from Ford disclosing the timing for free repairs, NHTSA said in a statement Thursday.

The automaker “identified this issue through its normal quality processes. We have been co-operating with the agency, as we always do,” Ford spokeswoman Elizabeth Weigandt said on Thursday, referring to NHTSA.

The recall covers 2015-18 Ford F-150 Regular Cab and SuperCrew Cab vehicles in North America for driver and front passenger seat-belt pretensioners.

Ford said the recall included 1.62 million U.S. vehicles, 340,000 in Canada and 37,000 in Mexico.

To resolve the issue, dealers will remove some insulation material and remnants of wiring harness tape from the vehicle’s B pillar area, and apply heat-resistant tape to the carpet and its insulation. They will also modify the back interior panels of Regular Cab vehicles. The B pillar is the vertical support behind a vehicle’s front seat windows.

Transport Canada contacted Ford in November 2017, regarding a B-pillar area fire on a 2015 vehicle. That prompted a joint vehicle inspection by Ford and the agency, but the cause could not be determined.

NHTSA reached out to Ford earlier this year to inquire about the reports relating to the three fires before it opened its formal probe.

Ford said the components in the older 2015-2017 models were built by Takata, which was acquired by Ningbo Joyson Electronic Corp., while ZF Friedrichshafen AG built the parts starting with the 2018 model year.

— David Shepardson is a Reuters correspondent covering the U.S. auto and transport sectors from Washington, D.C.

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The supplier, Chinese-owned Meridian Magnesium Products, said it is “working with the customers” — automakers affected by the fire — to move some of its tooling to a plant at Strathroy, Ont., in a letter on an internal employee website and signed by George Asher, manager of Meridian’s Eaton Rapids plant in Michigan.

The fire, whose cause is under investigation by local authorities, triggered smaller production disruptions to other vehicle manufacturers, including General Motors, Fiat Chrysler, Daimler and BMW, the companies confirmed to Reuters on Wednesday.

But the most significant impact was felt by Ford, whose F-150 full-size pickup is the best-selling vehicle in the U.S. The vehicle generated US$41 billion in revenue last year, about 28 per cent of total sales and the lion’s share of its profits.

Meridian supplies a lightweight radiator support for the F-150 and its heavy-duty sibling, the Super Duty. After the fire, Ford was forced to close F-series truck plants in Kansas City, Missouri, and Louisville, Kentucky, and was considering whether to close a third plant in Dearborn, Michigan.

It was not clear how long the production disruptions will last or how Ford may be assisting Meridian in relocating parts production. A Ford spokeswoman said on Wednesday the automaker is working closely with the supplier to get production restarted, but declined to provide details.

Production of the Super Duty at Ford’s Kentucky truck plant was halted on Wednesday.

The Super Duty is one of the automaker’s most profitable vehicles. A two-week production halt for the F-series could slice as much as US$310 million from Ford’s second-quarter profits, Buck Research analyst Joseph Amaturo wrote in a note Wednesday.

Ford could make up some of the lost production later in the year by running overtime.

Fiat Chrysler said on Wednesday the fire affected production of the Chrysler Pacifica minivan in Windsor, Ont., adding it is “adjusting production schedules as needed to minimize plant downtime (and) will make up any lost production.”

GM said on Wednesday it has temporarily halted production of Chevrolet Express and GMC Savana full-size vans at its Wentzville, Missouri, plant because of parts shortages caused by the fire on May 2. The plant continued to produce Chevrolet Colorado and GMC Canyon mid-size pickups. GM said it is working to resume van production “as quickly as possible.”

Daimler and BMW acknowledged that they also had parts shortages from Meridian, resulting in minor production disruptions at their U.S. plants in Alabama and South Carolina.

Meridian, owned by Chinese supplier Wanfeng Auto Holding Group, also provides parts to Toyota and Tesla, among others, according to the websites of Meridian and Wanfeng.

Meridian could not be reached for comment.

— Reporting for Reuters by Joseph White and Paul Lienert in Detroit.

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Ford executives said they expect the F-150 diesel model with a 10-speed transmission to achieve 30 miles per gallon highway fuel efficiency, a level comparable to some midsize cars.

“We’re confident we’ll get there,” David Filipe, Ford vice-president of powertrain engineering, said at a briefing for media ahead of the official launch announcement.

The diesel F-150 will cost between $2,400 and $4,000 more than a comparable gasoline truck, depending on the specific model, Ford executives said (all figures US$). The diesel engine will be manufactured at a Ford plant in Britain.

Ford executives said they expect that once production ramps up about five per cent of F-150 models will be ordered with the diesel engine. The model will be aimed at people who tow large recreational or work trailers.

Sales of big pickup trucks in the U.S. have surged in recent years as gasoline prices have stabilized at less than $3 a gallon in most states. Ford in 2017 sold 896,764 F-series trucks, more than in any year since 2005.

Still, Ford, General Motors and the Ram brand of Fiat Chrysler fight for the right to claim that their brands offer the most fuel-efficient large pickup — even when those high-mileage models have limited availability or cost more than conventional gasoline-fueled trucks.

Fiat Chrysler jarred its rivals in 2013 by offering a diesel engine in its light duty Ram pickup models and claiming best-in-class fuel economy. But last year, the U.S. Environmental Protection Agency and the U.S. Justice Department charged that Fiat Chrysler improperly used software to cheat government emissions tests covering 104,000 Ram 2014-2016 models.

The automaker is negotiating to settle the complaints and received government clearance to offer a 3.0-litre diesel in its 2017 and 2018 Ram trucks. That model is rated at 27 miles per gallon in highway driving.

Ford executives said they are confident their diesel will comply with U.S. emissions rules. Owners will need to refill a 5.4-gallon tank of fluid for the exhaust treatment system roughly every 10,000 miles, Filipe said.

— Joseph White is Reuters’ transportation editor in Detroit.

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