Ford Announces Cuts to EV Production for the Second Time in 3 Months
The Ford Motor Company is reportedly planning to significantly cut production for their F-150 Lightning electric pickup truck next year. It's a move the company claims is a response to “changing market demand.”
In October, Ford slashed their electric vehicle (EV) investments after losing $1.3 billion producing them in the previous quarter. Their losses were around $36,000 per EV sold, and they expected to lose as much as $4.5 billion on EV production by the end of this year.
So, this news is not surprising. As the demand for EVs continues to shrink, their production will too. Low demand does not call for a massive supply.
Ford Scaling Back Production Is Not Surprising
As reported by Automotive News, Ford sent a memo to suppliers stating that they will be scaling back production on the F-150 Lightning in the coming year, from what Ford expected to be 3,200 F-150 Lightning trucks produced weekly to 1,600.
The maker of the best-selling pickup truck in America isn't selling the electrified version of the F-150 like they expected to. However, in the grand scheme of EV sales, the numbers for the Lightning do show some promise. According to Car and Driver, Ford sold 4,394 Lightnings last month and 20,365 Lightnings this year through the end of November. That's a massive 54 percent increase over 2022's sales numbers. The kicker is that the Lightning's numbers are not good compared to Ford's third-quarter truck sales (190,477).
It also means that the Lightning's numbers are tracking far short of the 150,000 mark Ford initially hoped for when they ramped up Lightning production in March.
The folks at Motor Trend speculate that Lighting's hefty price tag is at the heart of their sales woes. Initially, Ford announced the F-150 Lightning with a more working-class-friendly price tag of $41,699; however, that price was not realistic, and Ford rescinded it before bringing the Lightning to market for $52,000. Price hikes are not enticing to potential buyers, especially working-class ones.
While Ford could cut prices to sell more trucks, they opted to keep prices high, produce fewer, and sell less instead. It could be more promising. However, this trend is going through the automotive industry as the demand for EVs continues to shrink. In October, General Motors announced that they would be delaying the release of their electric Chevy Silverado by a full year due to diminishing demand and engineering issues. More recently, GM's CEO Mary Barra told the Automotive Press Association that her company's “tactics” had changed from when EVs were first hitting the market because, at that time, they didn't “worry about profitability.”
With profitability being an issue again, it's unsurprising to see legacy automakers like GM or Ford announcing cutbacks in EV production. How many more cutbacks will we see as the EV revolution continues to slow down?
