The automotive sector is always changing, and Ford Motor Company is no different. The business recently revealed that it would be producing the all-electric F-150 Lightning with a significant change in production plans.
News reports state that Ford will stop producing this much-anticipated electric pickup truck in mid-November and resume production early in the following year. The carmaker made this choice to maximize sales growth and profitability while addressing the vehicle’s expanding inventory.
Production Halt for F-150 Lightning
According to NBC News, Ford Motor plans to halt production of its all-electric F-150 Lightning from mid-November until early next year. The automaker confirmed that this seven-week shutdown would occur at its Rouge Electric Vehicle Center in suburban Detroit, including previously planned holiday downtime at the end of the year.
Reasons for the Production Halt
Ford stated that the production halt is due to addressing “bloated inventories and narrow losses on the pickup trucks.” The company said, “We continue to adjust production for an optimal mix of sales growth and profitability.”
Impact on Workforce
The approximately 730 hourly workers at the Michigan plant will be temporarily laid off as a result of the production shutdown. But Ford clarified that not every employee will be let go for the length of the outage.
Slowdown in EV Adoption
Sales of all-electric cars have not increased as rapidly as many had anticipated, which is why the production was cancelled. The research attributes this to hesitant consumer acceptance and increased prices.
F-150 Lightning Sales and Profitability
Although the F-150 Lightning’s sales have increased by 86% this year, the firm has been subsidizing sales because it loses money on the car. This includes a program that reportedly offers dealers that order 2024 F-150 Lightnings from one of the automaker’s new regional electric vehicle distribution centers up to $1,500 for each car.
Ford’s Profitability Goals for Future EVs
Ford executives have stated that the automaker’s next generation of EVs will be less costly than its current generation and that it won’t launch a product unless it can be profitable within a year.
Reduction in Planned F-150 Lightning Output
The production slowdown represents a fall from grace for the F-150 Lightning. Ford executives once touted the vehicle as having the same importance as the Model T, but the company has moved to slashing the pickup’s planned output in half to begin this year.
Ford’s Overall Vehicle Supply
According to Cox Automotive, Ford’s overall days’ supply of new vehicles was 112 days as of the end of September. The F-150, including electric and traditional models, was at 100 days. Ford’s other EV models—Mustang Mach-E crossover and E-Transit van—were even higher, at 128 days and 112 days, respectively.
Ford’s Target Supply Range
Ford said its Model EV operations will lose about $5 billion this year. Ford has a target range of 50 to 60 days of supply, indicating that its current inventory levels are significantly above their desired range.
Challenges Facing the Automotive Industry
The production halt for the Ford F-150 Lightning is not an isolated incident but rather a reflection of the broader challenges facing the automotive industry as it navigates the transition to electric vehicles. Automakers must balance the need for sales growth with the requirement for profitability, a delicate balancing act involving inventory levels, production plans, and ever-evolving consumer preferences.
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