Ford Will Cut Planned Electric F-150 Production as Demand Slows
Slower-than-expected growth in sales of electric vehicles has forced several automakers to scale back once-ambitious production plans. Ford Motor has become the latest company to join that pullback.
In a memo sent to suppliers, the company said that it now expected to produce an average of 1,600 electric F-150 Lightning pickup trucks per week in 2024, about half of the level it had previously hoped to achieve.
The reduced target reflects the substantial dimming of expectations for sales of battery-powered cars and trucks that automakers are now coming to grips with. Ford and its main rival, General Motors, had been racing to increase production of a variety of electric vehicles, but consumer enthusiasm has not kept pace with those plans over the last six months. Some would-be buyers have been put off by the high prices of many electric vehicles, including the F-150 Lightning, as well as the availability and reliability of charging stations.
G.M. once expected to produce 400,000 electric vehicles by the middle of 2024, but withdrew that goal in November, and is delaying some new electric models. Rivian, a younger automaker, has said it aims to make 52,000 electric vehicles by the end of this year, a third of the 150,000 a year it is hoping its Illinois factory will eventually produce.
Similarly, Ford had hoped to have the capacity to make 600,000 battery-powered vehicles a year by the end of next year. As recently as September, Ford said it aimed to be able to make 150,000 electric F-150s a year — a rate of about 3,000 vehicles a week. It has also lowered production plans for its electric sport utility vehicle, the Mustang Mach-E.
“Given the dynamic E.V. environment, we are being judicious about our production and adjusting future capacity to better match market demand,” Ford’s chief financial officer, John Lawler, said last month in a conference call with financial analysts.
News of Ford’s memo to suppliers was earlier reported by Automotive News.
Even with the reduced target, Ford still expects 2024 production and sales of the Lightning to easily surpass 2023 levels, a spokeswoman said. In the first 11 months of this year, Ford sold more than 20,000 of the trucks, a rise of more than 50 percent from the same period in 2022. The company’s sales of all electric models grew 16 percent, to more than 62,000 vehicles.
Spurred by Tesla and its rapid growth in sales and profits, traditional automakers have been spending tens of billions of dollars to develop an array of electric models and to tool up factories to produce them and their batteries.
But even Tesla has struggled with slower sales growth this year. That has forced the company to cut prices of its two most popular models several times, pushing down its profit margin significantly.
Other companies are pushing back plans for new models. Last month, G.M. said it would delay electric versions of its Chevrolet Silverado and GMC Sierra pickups, and the Chevrolet Equinox sport-utility vehicle. Honda once planned to develop a small electric car with G.M. but nixed that effort this year.
Ford has four battery plants under construction in the United States, but recently said it would scale back the size of one of those, in Michigan.
Early on, automakers expected customers to flock to electric cars and trucks. At the end of 2021, Ford had accepted reservations for more than 200,000 F-150 Lightnings.
But strong early interest has not always resulted in booming sales. Cost is a big culprit. The price of batteries remains high, which has made some electric vehicles much more expensive than comparable gasoline-powered models at a time when consumers have been struggling with inflation.
When it introduced the Lightning, Ford said the truck would start at $40,000 but the company raised prices soon after, disappointing many people who reserved the truck. The pickup now starts at $50,000 and the top-of-the-line version starts at $92,000.
In addition it can also be hard to find enough places to charge electric cars and trucks in many parts of the country, unnerving some car buyers, especially people who do not have a garage or driveway where they can install a personal charger. Some drivers have also complained about long lines at public chargers or that some machines are broken or take too long to charge vehicles.
“We are going to respond to demand,” Mary T. Barra, G.M.’s chief executive, said in a November conference call. “We are going to make sure we have the right products at the right time, but we’re not overbuilding.”