Tesla price war: Ford exec says company will adjust EV prices 'as the market sees fit'

Ford (F) is "monitoring" Tesla's (TSLA) price cuts, and will adjust its own EV prices "as the market sees fit," says Darren Palmer, VP of Electric Vehicle Programs at Ford Model E Pricing. Palmer joined Yahoo Finance's Rachelle Akuffo and Pras Subramanian on Yahoo Finance Live, as Ford's F-150 Lightning launched in Norway, entering the global EV market. Palmer says Ford is "seeing massive demand" for products, and is "increasing production" to meet that demand. Palmer adds that Ford is currently "completely sold out" of all EV vehicles at the moment. When asked if Tesla's discounts will affect future pricing, Palmer says Ford is "monitoring the situation" and will adjust based on "how our customers value our products."

Ford is also preparing for potential headwinds from materials costs and availability. Palmer says Ford is focusing on "vertically integrating" its new Tennessee factory, as well as securing contracts on things like battery materials, "that are likely to become scarce soon." Palmer says Ford is also focusing on new types of batteries that use less "precious or scarce chemicals." Less reliance on those risky chemicals will allow Ford to lower prices and "be resilient to supply issues" moving forward.

Key Video Moments:

00:00:20 - Ford seeing "massive demand" for EVs

00:00:50 - Price war: Ford "monitoring the situation"

00:01:30 - Focused on securing contracts for materials that are "likely to become scarce"

00:01:45 - Batteries less reliant on precious metals will allow Ford to lower prices.

To see Yahoo Finance's full conversation with Darren Palmer, click here.

Video Transcript

- You're seeing competitors like Tesla cutting prices again and again and again here in the States, and also Ford matching that with the Mach-E earlier this year. How is that pressuring the business? Do you guys see the need to continue respond to that? Is that going be a problem going forward?

DARREN PALMER: Well, this is a really, really growth part of the market. We are seeing massive demand for our products. So after we launched them and started production, we saw that we needed many, many more. And so we had to invest a lot of money to increase the production. And you mentioned earlier the Lightning, for example, is going up to 150,000 this year. The Mach E is going up to towards 200,000 this year, and the E Transit is also going up many, many times from the original plan. So at the moment, we are completely sold out of all of the vehicles. We're. Of course, monitoring the situation for dynamics for pricing, and we will adjust as the market sees fit and how our customers value our products.

- And some of the issues that Tesla brought up in their call-- higher raw material costs, the commodities, logistics and warranty costs, lower revenue for some of these environmental credits falling off as well. How is Ford positioning itself here?

DARREN PALMER: Absolutely, they are all factors. And we did have to increase the price of the Lightning because of the battery material cost increases. So in Tennessee where we're building that huge factory, we're also building recycling, and we're also vertically integrating and securing contracts on all of the materials that we're going to need, especially the ones that are likely to become scarce soon like battery materials.

We're also bringing in new types of battery chemistries like LFP, lithium phosphate, which uses less of some precious or scarce chemicals, which allows us to offer a lower price and also to be resilient to supply issues. So these are some of the things we're already preparing for.

- Hey, Darren. Real quick-- in the European market, at least, the EV division is going to actually launch the Explorer there. The famous nameplate here in the States is going to go to Europe as the Explorer EV SUV. Any chance we'll see that here, or is it just strictly a European model?

DARREN PALMER: At the moment, that's strictly a European model. It's a smaller vehicle, beautifully, perfectly suited to their market. And that Explorer brand and what it stands for, and freedom and going out and having an adventure, seems to be resonating really well. And that's what Explorer stands for here. So so far, so good. We're very excited about that. At the moment, that is a European vehicle, so it's a smaller vehicle.