Ford is set to reduce the weekly production of its F-150 Lightning pickup truck, citing a decline in customer demand.
Reducing Weekly Production
Ford is guiding them to expect an average production volume of 1,600 electric trucks from the Rouge Electric Vehicle Center in Dearborn, Michigan, commencing next year. This represents a notable drop from the current weekly output of 3,200 trucks from the same facility, as reported by Auto News.
In response to inquiries about the figures mentioned in the report, Ford spokesperson Emma Bergg refrained from commenting, emphasizing the company's commitment to align Lightning production with customer demand.
During its third-quarter earnings call in October, Ford executives hinted at plans to "adjust" the production of its electric vehicles and postpone approximately $12 billion in investments, attributing the decision to a decline in demand for higher-priced premium electric vehicles.
While the Lightning wasn't explicitly mentioned during the earnings call, the automaker spotlighted other instances, such as the scaling back of Mustang Mach-E production and the deferment of a second battery factory in Kentucky.
This strategic shift reflects Ford's responsiveness to market dynamics and its proactive measures to align investments with the evolving landscape of electric vehicle demand.
This marks a departure from January 2022 when Ford, buoyed by the 200,000 reservations for its truck, proudly declared its intention to almost double production capacity to 150,000 vehicles annually by mid-2023, responding to a surge in customer demand.
In line with this plan, the Rouge Electric Vehicle Center in Michigan underwent a temporary shutdown in early 2023 for necessary upgrades to accommodate the heightened production capacity.
However, amidst these enhancements, TechCrunch reported that there emerged a softening in demand for electric vehicles (EVs) throughout the industry.
While EV sales in the United States continue to grow, heading towards an expected 50% year-over-year increase, the pace of this growth has not kept up with the ambitious projections of major automakers.
Consequently, industry players find themselves readjusting strategies, with some opting to curtail investments, delay factory improvements, or scale back production capacity.
Pulling Back Construction Plans
Electric vehicle (EV) sales are on an upward trajectory, though not at the pace anticipated by some automakers. Consequently, The Verge reported that several companies, including Ford, have recalibrated their ambitious construction plans.
Ford, in a recent announcement, disclosed a delay of $12 billion in investments, involving a pause in the construction of one of its two planned battery plants in Kentucky and a revision of production goals for another battery factory in Michigan.
Despite the surge in EV sales, Ford remains in the red regarding its electric endeavors, posting around $1.3 billion in adjusted earnings losses this past quarter. Cumulatively for the year, Ford's losses in the EV sector amount to $3.1 billion, with a projected total loss of $4 billion for the year.
Nonetheless, the growth in EV sales persists. Ford has reported selling 20,365 F-150 Lightning trucks in 2023, reflecting a substantial 53% increase from the 13,258 units sold in 2022. EVs made up just under 8% of all US vehicle sales in the third quarter of 2023.
