What happened
Shares of electric pickup truck start-up Lordstown Motors (RIDE 1.11%) were trading down sharply on Thursday morning after Ford Motor Company (F 0.66%) unveiled its all-electric F-150 Lightning.
As of 11:00 a.m. EDT, Lordstown's shares were trading about 12.6% below Wednesday's closing price.
So what
If you're reading this, you probably know that Lordstown is gearing up to start production of its Endurance, a battery-electric pickup truck ostensibly designed around the needs of commercial and government fleet customers. With some backing from General Motors (GM -0.17%), and some promising early interest from fleet buyers, Lordstown looked like it might have a chance of sticking around for a while.
Until now.
The problem for Lordstown is that the leading automaker in the U.S. commercial-fleet market -- that would be Ford -- just showed the world how it plans to remain the leader of that market, and of the pickup market generally, as the world transitions to zero-emissions vehicles.
Ford's new F-150 Lightning is an impressive product at an impressive starting price -- just under $40,000 before government incentives. Lordstown probably won't be able to match that, at least not profitably, which is why its stock price fell Thursday morning.
The Lordstown Endurance is expected to start at $52,500 before incentives -- over $10,000 more than Ford's F-150 Lightning. Image source: Lordstown Motors.
Now what
This is about more than the F-150 Lightning's starting price. Fleet managers who have been doing business with Ford for years largely know what they'll get with an electric F-150. Even if the total costs of ownership for the Lightning and the Endurance were comparable, it would be very hard for Lordstown (or any other commercial-vehicle newcomer) to convince those fleet managers to take a chance on a new vehicle from an untested start-up rather than going with a similar option from a brand they know.
Put another way, the investment case for Lordstown, and for most of the other start-ups aiming to produce electric vehicles for commercial-fleet applications, just got a lot harder to make.
