Jim Cramer explains Ford’s electric vehicle price cuts

CNBC’s Jim Cramer analyzed Monday FordA move to slash the price of its electric F-150 Lightning pickup. Cramer said he believes the price cuts are at least partly due to the fading novelty of electric vehicles for many Americans.

Ford announced Monday that it will lower prices on all versions of the Lightning, with the cheapest version listed at $50,000, about $10,000 less than it had previously estimated. The automaker said its efforts to increase production and reduce the cost of battery minerals have paid off, CNBC reported.

“Who knows if this will lead to a cost-cutting spiral?” Cramer said. “But one thing we do know after today is that the EV boom may be over, as we’ve always known, when mass adoption eventually happens. It just happened a little sooner than I expected.”

Cramer said he thinks electric cars are “losing the excitement factor,” with some potential buyers feeling nostalgic for older gas-powered cars, while others realize they can buy an electric car from a number of manufacturers, such as General Motors, Rivian and tesla.

The good news for investors holding Ford money, Cramer said, is that despite the cuts, vehicle prices are still higher than when Ford debuts new models in 2021, with the cheapest truck being the 4. million dollars, and the production cost is also lower.

The bad news, however, is that it remains to be seen whether the company can meet its expectations (which Wall Street calls “aggressive”). Ford shares fell nearly 6% on Monday.

Cramer said it didn’t help that the cuts came just days after Tesla laid off workers. unveiled Its first Cybertruck, he called its optics “suboptimal.”

“Ultimately, unless your costs come down — which is the case with Ford — it’s not going to be profitable anyway,” Cramer said. “But if a car company doesn’t make an electric car, that car company will eventually fail, and we all know that.”