Ford Adjusts Production Strategy Amid Slowing EV Demand, Cuts F-150 Lightning Output
Ford Motor Co., one of the leading automotive manufacturers in the U.S., announced on Friday a strategic shift in its production line, particularly impacting the F-150 Lightning electric pickup truck. This move reflects a broader trend in the electric vehicle (EV) market, as demand appears to be stabilizing after a period of rapid growth.
The company revealed that it would be scaling back production at its Michigan Rouge Electric Vehicle Center to a single shift starting April 1. This decision marks a significant change from their earlier statement in October, where Ford had temporarily reduced one of three shifts at the same plant dedicated to the electric F-150 Lightning production.
This announcement is seen as a clear indicator of the cooling demand for EV trucks, a sentiment echoed across the industry. General Motors, for instance, postponed the opening of their $4 billion electric truck plant in Michigan by a year, as announced last October.
In a move indicating recalibrated production goals, Ford informed its suppliers in December that it intended to manufacture around 1,600 F-150 Lightning EV trucks per week from January onwards. This figure is notably lower than the previously planned 3,200 units per week.
The production cutback arrives amidst a contentious backdrop where Detroit automakers have expressed concerns over the Biden Administration’s ambitious emissions regulations. These proposed rules aim for EVs to constitute 67% of all new vehicles by 2032, a target that has been met with resistance from several industry players.
The reduction in F-150 Lightning production will affect approximately 1,400 workers at the plant. Ford plans to reallocate roughly 700 of these workers to its Michigan Assembly Plant. Others are expected to be reassigned within the Rouge Complex or other Ford facilities in Michigan. Additionally, there is an option for a special retirement program for those impacted. The company also noted that a few dozen employees at component plants supporting F-150 Lightning production might face repercussions.
In a surprising revelation last October, Ford acknowledged that it lost an estimated $36,000 on each of the 36,000 EVs delivered to dealers in the third quarter. This loss has prompted the company to slow down the ramp-up of EVs, which are currently not profitable, and instead shift investments towards Ford’s commercial vehicle unit. The company also plans to quadruple sales of gas-electric hybrids over the next five years, reflecting a strategic pivot towards hybrid models, which have seen increasing buyer preference over all-electric models.
Despite these adjustments, Ford remains optimistic about the future of EVs. The company foresees continued growth in global EV sales in 2024, albeit at a pace “less than anticipated.”
In a balancing act, Ford also announced plans to expand production in other areas. The Detroit automaker confirmed that it would add a third shift, creating nearly 900 jobs at its Michigan assembly plant. This expansion aims to boost production of the popular Bronco SUVs and Ranger pickups, signaling a diversified approach to meeting market demands.
Ford’s strategic shift highlights the evolving dynamics in the automotive industry, particularly in the EV segment. As the market matures, automakers like Ford are recalibrating their strategies to align with changing consumer preferences and economic realities.
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