Ford will scale back planned production of electric F-150s as demand declines

Slower-than-expected growth in electric vehicle sales has forced several automakers to scale back their once-ambitious production plans. Ford Motor has become the latest company to join this retreat.

In a memo to suppliers, the company said it now expects to produce an average of 1,600 electric F-150 Lightning pickup trucks per week by 2024, about half the level it had previously hoped to achieve.

The lowered target reflects the significant deterioration in expectations for sales of battery-powered cars and trucks, which automakers are now coming to grips with. Ford and its main rival, General Motors, have been racing to increase production of a variety of electric vehicles, but consumer enthusiasm has not kept pace with these plans over the past six months. Some potential buyers have been deterred by the high prices of many electric vehicles, including the F-150 Lightning, as well as the availability and reliability of charging stations.

GM once expected to produce 400,000 electric vehicles by mid-2024, but withdrew that goal in November and postponed some new electric models. Rivian, a younger automaker, has said it wants to make 52,000 electric vehicles by the end of this year, a third of the 150,000 per year that the Illinois plant eventually hopes to produce.

Similarly, Ford had hoped to have the capacity to produce 600,000 battery-powered vehicles per year by the end of next year. As recently as September, Ford said it aims to make 150,000 electric F-150s per year – a rate of about 3,000 vehicles per week. It has also cut production plans for its electric SUV, the Mustang Mach-E.

“Given the dynamic EV environment, we are being judicious about our production and adjusting future capacity to better match market demand,” Ford Chief Financial Officer John Lawler said in a conference call with financial analysts last month.

The news about Ford’s memo to suppliers was previously reported by Automotive News.

Even with the lowered target, Ford still expects 2024 Lightning production and sales to easily surpass 2023 levels, a spokeswoman said. In the first eleven months of this year, Ford sold more than 20,000 trucks, an increase of more than 50 percent compared to the same period in 2022. Sales of all of the company’s electric models grew by 16 percent, to more than 62,000 vehicles.

Spurred by Tesla and its rapid growth in sales and profits, traditional automakers have spent tens of billions of dollars developing a range of electric models and equipping factories to produce them and their batteries.

But even Tesla has suffered from slower sales growth this year. That has forced the company to cut prices on its two most popular models several times, significantly reducing its profit margin.

Other companies are pushing back plans for new models. Last month, GM said it would delay electric versions of its Chevrolet Silverado and GMC Sierra pickups and the Chevrolet Equinox SUV. Honda once planned to develop a small electric car with GM, but abandoned that effort this year.

Ford has four battery plants under construction in the United States, but recently said it would scale back the size of one of them, in Michigan.

Automakers expected early on that customers would flock to electric cars and trucks. By the end of 2021, Ford had accepted reservations for more than 200,000 F-150 Lightnings.

But strong early interest hasn’t always led to booming sales. Cost is a big culprit. The price of batteries remains high, making some electric vehicles much more expensive than comparable gasoline models at a time when consumers are struggling with inflation.

When Ford introduced the Lightning, Ford said the truck would start at $40,000, but the company raised prices shortly thereafter, disappointing many people who had pre-ordered the truck. The pickup now starts at $50,000 and the top version starts at $92,000.

Plus, finding enough places to charge electric cars and trucks can be difficult in many parts of the country, making some car buyers nervous, especially people who don’t have a garage or driveway where they can install a personal charger. Some drivers have also complained about long lines at public chargers or that some machines are broken or that vehicles take too long to charge.

“We’re going to respond to demand,” GM CEO Mary T. Barra said on a conference call in November. “We will ensure that we have the right products at the right time, but we will not build too much.”