Ford Motor Company has announced a substantial reduction in the production of its all-electric F-150 Lightning pickup truck, slashing its output by over 50%. The decision is a response to a steep decline in demand.
Initially, the F-150 Lightning had garnered considerable interest, leading to high production targets. However, the actual sales in 2023 were disappointing, with only about 75,000 vehicles sold, significantly lower than the capacity.
The cutback in production, from an annual target of 210,000 trucks to just 80,000 for 2024, has broader implications, including the layoffs of approximately 1,400 workers at the Dearborn, MI plant. The reduction is a reflection of several challenges faced by the EV market, including long wait times for vehicle delivery, rising interest rates, and a notable increase in the prices of the Lightning lineup by $6,000 to $8,500 per truck.
These factors have led consumers to consider more economical options, often choosing gas-powered vehicles over electric ones.
The shift in consumer preference and the subsequent production cut has raised questions about the viability of Ford’s ambitious plan to invest $50 billion in EVs, aiming to convert half of its global production volume to electric by 2030.
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Ford isn’t alone in facing EV struggles. Earlier this month, Hertz rental cars announced their plan to sell about one-third of its electric vehicle fleet in the US. The move involved the sale of approximately 20,000 electric vehicles. The fire sale began last month and is set to continue throughout 2024. Hertz’s CEO, Stephen Scherr, had previously indicated a slowdown in the company’s EV expansion, citing slower-than-expected adoption rates.
Ford’s initial foray into electric vehicles began over a century ago with the Ford Model T, which had an electric variant in the early 20th century. However, it wasn’t until the late 20th and early 21st centuries that Ford began to seriously invest in EV technology.
The modern era of Ford’s electric vehicles started in the late 2000s, with the introduction of hybrid and plug-in hybrid models like the Ford Escape Hybrid, which debuted in 2004 as the first hybrid SUV from an American automaker.
Like all automakers, however, they have faced challenges in their transition to electric vehicles. One of the primary issues is related to battery technology and supply chain constraints.
Another significant challenge is the establishment of a comprehensive charging infrastructure. While Ford has invested in expanding charging networks, the availability and convenience of charging stations remain a concern, particularly in rural or less developed areas.
Ford has also had to balance the introduction of new EV models with the risk of alienating its traditional customer base, which may be more accustomed to or prefer combustion engine vehicles.
The company’s decision to scale back on EV production while increasing the output of gas-powered vehicles like the Bronco, Ranger, and Super Duty trucks indicates a strategic reevaluation in response to market dynamics and consumer behavior. The move could signal a trend of rethinking EV strategies amidst economic uncertainties and shifting consumer preferences.