Ford Motor (NYSE:F) Co witnessed a 6% drop in its shares during morning trading on Friday. The decline came after the automaker reported increased losses from its electric vehicle (EV) business due to pressure from a price war initiated by industry leader Tesla (NASDAQ:TSLA).

Ford also withdrew its 2023 forecast, citing “uncertainty” regarding the pending ratification of its new labor deal with the United Auto Workers (UAW) union, which is expected to significantly raise labor-related expenses.

The company warned of ongoing challenges in its EV business and announced a reduction in production of its Mustang Mach-E, along with scaling back approximately $12 billion in investments in the segment. This includes delaying the construction of its second battery plant in Kentucky.

Wells Fargo analysts noted that the rise in battery raw material costs had negatively impacted the outlook for battery electric vehicle (BEV) profitability and Ford’s overall profitability.

Ford’s quarterly report contributes to the concerns surrounding the EV market, where consumers have reduced some purchases due to high inflation. The company reported a quarterly loss in earnings before interest and taxes (EBIT) of $1.33 billion in its EV unit, compared to an EBIT loss of $1.08 billion in the second quarter.

A tentative agreement was reached on Wednesday between the UAW and Ford, which entails a 25% wage increase for 57,000 workers over nearly five years, effectively ending the strike at some of the automaker’s largest factories. The new contract is expected to add $850 to $900 in labor costs per vehicle, as stated by Chief Financial Officer John Lawler.

Throughout the duration of the strike, Ford lost about $4.32 billion in market capitalization, according to LSEG data.

Rival automaker General Motors (NYSE:GM), which has not yet reached an agreement with the UAW, withdrew its 2023 results forecast earlier in the week and revised its goal of producing 400,000 EVs by mid-2024.