Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Ford (F -6.98%) stock is sinking today, and ironically it may be all about its early electric vehicle (EV) success. Ford shares were trading near the lows of the day, down 6.1% as of 1:21 p.m. ET.
Ford is ending the week on a down note, even though the company announced some big news this week. Its F-150 Lightning EV was awarded the prestigious MotorTrend Truck of the Year award for 2023 earlier in the week. But another price increase announced today risks pricing some customers out of the market.
Image source: Ford.
Ford sold more than 2,000 F-150 Lightning trucks in the U.S. in November as it ramps up production on the popular model. That still only represented about one-third of its EV sales, with the Mustang Mach-E being its higher-volume EV offering right now. But Ford has aspirations for the electric version of the best-selling F-Series to ramp up quickly.
Thanks to strong demand, the company has added a shift at its Michigan manufacturing facility, aiming to boost production to its annual capacity of 150,000 units by next fall, reports CNBC. But investors know the vehicle must be profitable, and today’s announcement about rising production costs was concerning.
Rising raw material costs were cited as one of the reasons Ford just raised the price of the entry-level model by $4,000 to just under $56,000. That’s a bump of just 8%, but when combined with prior increases, it represents a 40% increase from the original pricing below $40,000 in May 2021.
While rising raw material costs and price increases aren’t unique to Ford, it begs the question of how the Lightning backlog will evolve, since many buyers ordered the truck at lower prices. Investors should monitor that metric to gage how demand for the important Ford EV offering holds up.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.
Market data powered by Xignite.
