Ford Motor Co. announced on Monday that it will be cutting its production plans for the highly anticipated electric F-50 Lightning pickup trucks by approximately 50% in 2024. The decision comes as a result of changing market demand, according to reports from CNBC and Automotive News.
Previously, Ford had planned to produce around 3,300 Lightning trucks per week. However, due to the evolving market landscape, the production will now be reduced to about 1,600 units per week at their Rouge Electric Vehicle Center in Dearborn, Michigan.
In August, Ford's Rouge facility underwent a temporary six-week shutdown in order to expand and increase its manufacturing capacity. The plan was to triple its production capability to accommodate up to 150,000 vehicles per year.
While electric vehicle (EV) sales in the United States have been steadily growing, they haven't maintained the same rapid rate of increase seen in previous years. As a result, automakers are reevaluating their EV strategies and reducing spending in this area.
To compete more effectively in the market, Ford introduced a significant price cut of up to 17% for its electric F-150 in July, aiming to capture a larger share of the EV market.
The company's decision to reduce production of the F-50 Lightning follows disappointing quarterly earnings in October. Ford's EV unit reported an adjusted loss of $1.3 billion, which was wider than analysts' expectations. The company attributed this underperformance to customers' unwillingness to pay premium prices for EVs. Consequently, Ford temporarily halted billions of dollars of long-term investment in EVs.
However, despite these setbacks, Ford remains committed to the EV industry. Last month, the company resumed construction of an EV battery plant in Michigan that had been previously put on hold due to a workers' strike. The plant's size was scaled back, resulting in a decreased cell output from enough for 400,000 vehicles per year to 230,000.
As of now, Ford's stock has seen minimal movement in after-hours trading. Year to date, the stock has experienced a decline of approximately 5%, while the S&P 500 index has recorded a significant gain of 20% in 2023.
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