Ford Motor Company has announced a significant pause in the production of its electric F-150 Lightning, extending from mid-November through the beginning of 2025. The Dearborn manufacturing facility will cease operations from November 18 until January 6. This marks a much longer shutdown than its typical one week holiday holiday closure.
This is all due to a continued decline in demand for EVs.
Ford did not release any formal statement on how many workers would be affected by this closure. Automotive News has reported that an estimated 800 workers would be impacted, with many of those being hourly employees.
The electric pickup truck’s journey has been marked by several setbacks in 2024.
Despite achieving sales of 22,807 units in the first nine months of the year – which is an 86% increase from the previous year. Unfortunately, this number has fallen short of Ford’s ambitious targets. Ford has overestimated the consumer interest in EVs.
A recent report shows the states with the highest EV adoptions rates, which shows that consumers are not in a rush to move away from their gas-powered vehicles. While California has over 1 million EVs on the road, the second highest state is Florida with about 250K EVs on the road. With an estimated 16 million drivers in Florida, this is a very small number of EV owners.
The electric variant comprises just 3.6% of total F-150 sales, highlighting the challenges in transitioning consumers to electric vehicles.
The company’s CEO, Jim Farley, who once compared the F-150 Lightning’s significance to that of the revolutionary Model T, has had to adapt to market realities. There are still concerns about EV ownership by consumers that are putting a damper on increased sales across the EV market.
This production pause follows earlier strategic shifts, including:
- A 50% reduction in planned production at the start of 2024
- A temporary halt in February due to quality concerns
- Price adjustments to stimulate consumer interest
The broader implications for Ford’s electric vehicle program are substantial.
The company anticipates a $5 billion loss in its EV division this year, leading to significant strategic pivots.
Chief Executive Officer Jim Farley stated in a call with analysts on October 28 that the brand also struggles with high warranty costs on their quality problems. This is adding to the overall loss.
In response to the loss, Ford is:
- Shifting focus toward smaller, more affordable electric vehicles priced under $30,000
- Increasing investment in hybrid technology
- Canceling previously planned electric vehicle projects, including a three-row SUV
This strategic realignment reflects broader industry challenges in achieving widespread electric vehicle adoption, forcing automakers to reassess their electrification timelines and strategies.
Source: Bloomberg
