Ford (F) recently began production of its highly anticipated F-150 Lightning electric pickup truck on Tuesday. The automaker announced that it has already secured 200,000 reservations for the Lightning from customers.
Amid the hot demand for electric trucks, Bank of America (BAC) Head of U.S. Autos Research John Murphy says that many people who are buying electric pickup trucks are actually first-time truck buyers.
“The really intriguing thing about what's going on with the F-150 Lightning and will probably happen with the Silverado and Sierra is the large majority of the buyers of these EV pickup trucks are new buyers,” Murphy told Yahoo Finance Live. “They're not your traditional pickup truck buyers. And they're not the brand specific or nameplate specific buyers that you might expect to come into the market.”
Murphy joined Yahoo Finance Live to discuss GM (GM) earnings, its electric vehicle portfolio and targets, and what demand for Ford’s F-150 Lightning means for legacy automakers pivoting to EVs. According to CarGurus’ (CARG) Pickup Truck Sentiment Survey, 43% of current pickup truck owners are considering making the switch to electric.
The survey also found that truck owners are relatively open-minded when it comes to brand loyalty, with 78% of truck owner respondents expressing that they would consider buying a different truck brand in the future.
Ford versus the competition
The GMC Sierra Denali and Chevy Silverado are also both going electric, and could emerge as direct competitors to the F-150 Lightning. Tesla’s (TSLA) Cybertruck is also expected to go on sale beginning in 2023. However, Murphy believes Ford currently has a leg up on the other legacy automakers.
“So I think Ford's got a little bit of an advantage right now. They've got a very competitive product,” he said. “GM will have a very competitive product. But I think for both of these companies on the pickup truck side, there's probably significant material upside that will be driven by these trucks alone for the companies.”
GM reaffirmed its goal of delivering 400,000 electric vehicles this year and next, but in the latest quarter, the company held just a 0.3% share of the EV market in the U.S. Murphy said that while he thinks the number is achievable, supply chain constraints may pose a bottleneck for production and hinder GM from reaching its objective.
Ultimately, Murphy thinks there is room in the market for all of the emerging electric pickup manufacturers to coexist and thrive.
“So in reality, what you're seeing is a huge opportunity for both Ford and I think GM to potentially increase their big money-makers and the volumes by somewhere 10% to 15% at the jump or in the initial data we're seeing on with these EV launches, which in reality means that there's very significant upside to the company's core earnings power over time just on these trucks alone,” he added.
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV
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