Ford F-150 Lightning electric pickup can win first mover advantage

Ford F-150 Lightning on display at the New York Auto Show, April 13, 2022.

Scott Mlyn | CNBC

DETROIT – Ford Motor will be the first automaker to bring a mainstream full-size electric pickup to the US market, poised to capitalize on its first-mover advantage in what is expected to be a hotly contested segment in the years to come.

Ford CEO Jim Farley said the company plans to increase production of the F-150 Lightning electric pickup faster than its competitors, with plans to increase Lightning production at the plant in Dearborn, Michigan, to 150,000 units next year or more, up from an initial target of 40,000 vehicles.

That would dwarf Rivian Automotive and General Motors’ plans, which are estimated to be in the tens of thousands. Both already manufacture and sell more expensive electric pickups in the smaller and larger truck segments.

Other companies, particularly EV start-ups, have previously touted electric pickups as a big opportunity, but have so far failed to execute on a grand scale.

“In this market, being a first mover is a very, very important step,” Farley told CNBC. “We didn’t know we would be first, but we worked fast if we did, and it worked out that way. I think that could be one of the most important advantages we have.”

Ford is “confident” it can hit its 150,000 production target, according to Farley. He said the company had secured the lithium-ion batteries needed for that level of production – a major concern for Wall Street investors and analysts. Ford will also prioritize the supply of semiconductor chips, which has been a major supply chain issue for more than a year, for Lightning, Farley said.

“We’re not kidding. We thought it was as big a product as when the Model T came out for us,” Farley said, referring to a Ford flagship that is credited with being the catalyst for mass adoption of vehicles from the horse and buggy. started in 1908.

Immediate delivery

Some believe that the F-150 Lightning could be the first real test of whether Americans are ready to adopt an electric vehicle that isn’t a Tesla. The pickup was also important to Ford’s $42 billion truck franchise and maintained its sales dominance for decades as America’s best-selling truck and vehicle with its F-Series pickups.

Ford has begun initial pre-production of the F-150 Lightning electric pickup truck at a new plant in Dearborn, Michigan.

Michael Wayland | CNBC

While Rivian’s R1T electric pickup was the first to hit the market last year, it’s a smaller vehicle than the Lightning and starts at $67,500. GM also started shipping the GMC Hummer EV pickup late last year, but it’s bigger than the F-150 Lightning and was initially priced at around $110,000.

The F-150 Lightning starts at around $40,000 for the work-oriented version and $53,000 — just thousands of dollars above the average price paid for a new vehicle — for a consumer pickup.

Ford has started production of the salable F-150 Lightning. The automaker is expected to start shipping the new electric trucks to dealers in a few days.

Scale

The first to receive the F-150 Lightning were commercial, or fleet, customers, and the 200,000 reservation holders who have placed a $100 refundable deposit for the vehicle since its launch last May. Ford could take more than a year to fulfill that order, according to Farley.

That time frame is longer than the historical grace period for such a vehicle but is still expected to be faster than other EVs. New orders for the Hummer EV are not expected to be fulfilled until 2024, and Rivian only expects to produce 25,000 vehicles this year.

Ford has begun initial pre-production of the F-150 Lightning electric pickup truck at a new plant in Dearborn, Michigan.

Michael Wayland | CNBC

Farley said the companies share the F-150 internal combustion engine plant, which will help achieve between 150,000 and 200,000 units of production per year.

“We build one million F-150s per year. We know how to do this. And we have incredible scale,” he said.

Ford’s recipe for profitability with the F-150 Lightning does scale. Lightning shares parts such as seats, doors, and most vehicle interiors with its traditional gas-powered sibling to help with pricing and supplier development.

This is a different strategy from GM, Rivian and Tesla, all of which have their own unique electric truck platforms. And it was a strategy that helped Ford bring the vehicle to market.

Parts sharing is also expected to help boost production, but that opens up criticism for the company that a dedicated EV platform is preferable. Ford is finally hoping to build a dedicated EV platform at a new plant in Tennessee.

Unlike the Hummer and R1T, Ford made it a big point to target fleet customers with the F-150 Lightning. About 20% to 30% of initial production will go to those customers, but Farley said he believes demand from companies and work customers can eventually outpace the consumer market.

Growing segment

LMC Automotive expects the US electric pickup truck market to grow from about 25,000 vehicles this year to 1 million or more by 2030. The five electric pickup models available this year are expected to jump to 21 in the next decade.

The race to release an electric pickup has been fueled in large part by Tesla and other EV start-ups eyeing the segment, which the Detroit automaker has dominated for decades.

Ford’s F-Series, which includes the F-150 pickup and its larger sibling, has been America’s best-selling vehicle for 40 consecutive years and the industry’s best-selling truck for 45 years. There’s no title Ford wants to give up when it comes to electric pickups.

“We’re not leaving the future to anyone,” Farley told CNBC last year. “Our electric strategy is very specific. We will invest in segments where we are a dominant player and we have scale, like our F-150, Transit van, Mustang.”

Ford has announced plans to increase production capability to 2 million EVs by 2026, as it seeks to become the second largest seller of such vehicles, behind Tesla, by then. Its cross-city rival, GM, has said it plans to surpass Tesla in domestic EV sales by 2025.

The two automakers have a lot to do with Tesla, which accounted for about 3 in 4 electric vehicles sold during the first quarter of this year.

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