This time last year, Ford Motor Co. was showing off construction work at its F-150 Lightning plant in Dearborn, Mich., touting a newly added third shift and promising to triple production of the electric pickup to a rate of 150,000 annually by late 2023.
Instead, Ford’s soaring expectations for the Lightning have crashed back to earth.
The company idled the third shift at the Rouge Electric Vehicle Center in October and has told suppliers it was slashing 2024 production goals in half, the latest example of automakers walking back grand EV ambitions as demand rises slower than most expected.
“Everybody’s eyes were bigger than their stomachs,” Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions, told Automotive News. “This downturn we’ve experienced should have been expected by the industry, but when they looked at the early growth, they figured it’d grow by [that much] each year. That was never going to happen.”
According to a planning memo obtained by Automotive News, Ford told suppliers the Lightning plant’s expected weekly production rate will drop to 1,600 in early January from about 3,200 trucks because of “changing market demand.” That would equate to around 75,000 vehicles next year, or half of the run rate Ford spent much of this year racing to achieve.
While the Lightning remains popular — it’s the nation’s top-selling electric pickup, with deliveries up 54 percent to 20,365 this year through November — Fiorani said the decision shows the automaker was “overenthusiastic” about demand. Most early adopters already have received their trucks, he said, which leaves Ford and other automakers to figure out how to “convert stubborn buyers who aren’t ready to make that leap” to EVs.
“It’s not going to be a quick turnaround at this point,” Fiorani said.
The Lightning news comes after Ford in July postponed some EV production targets and in October said it would delay about $12 billion in EV investment.
The company has said it would reduce Mustang Mach-E production and push back the opening of one of two battery plants planned in Kentucky with partner SK On. It also has scaled down plans for a battery plant in Marshall, Mich.
“The narrative has taken over that EVs aren’t growing. They’re growing,” CFO John Lawler said in October. “It’s just growing at a slower pace than the industry and, quite frankly, we expected.”
It’s not just Ford having to backtrack. General Motors in October withdrew its commitment to build 400,000 EVs by mid-2024 and said it would delay three upcoming models by a few months. GM no longer intends to expand production of electric Chevrolet Silverados and GMC Sierras to a second plant until late 2025.
GM and Honda also abandoned plans to co-develop a line of affordable EVs starting in 2027.
Fiorani said some automakers’ rush to boost EV capacity could have been to please investors.
“The manufacturers should have been anticipating [the slowdown], but they also didn’t want to be the ones being left behind in this transition,” he said. “Part of the issue is Wall Street doesn’t like legacy automakers, but they do like tech companies. Manufacturing modern EVs makes them look like a tech company, and that had to be behind a lot of the planning of an all-EV future.”
Ford’s stock value didn’t change much after the Lightning news broke, leading Morgan Stanley analyst Adam Jonas, in a research note, to wonder if “bad EV news” is really a negative.
“It seems the stock market is rewarding certain auto manufacturers for ‘dialing back’ their EV strategies,” he wrote.
The swings in production plans are troublesome for suppliers that have invested millions of dollars in tooling and equipment to meet Ford’s changing plans.
CEO Jim Farley previously said Ford originally planned for Lightning volume of 20,000 a year. But after amassing 200,000 reservations shortly after it revealed the truck in May 2021, the company boosted its targets.
“The reality is clear,” Kumar Galhotra, now Ford’s COO, said in January 2022. “People are ready for an all-electric F-150, and Ford is pulling out all the stops to scale our operations and increase production capacity.”
As recently as mid-2023, Ford said it expected to hit an annual run rate of 150,000 by this fall. To reach that goal, the company idled the plant for six weeks at that time to make it more than 70 percent larger.
A spokesperson declined to reveal the truck’s current production rate.
Fiorani said his firm has been cautioning suppliers to “beware of how much you’re investing” in EVs.
“If you invest for a large volume of tooling, it’s not going to pay itself off quickly,” he said. “If the suppliers were planning on every number the manufacturers gave them, they’re over-capacitized now and have to figure out what to do with these plants, tooling and people.”
He said the Lightning cutback especially could hurt smaller Tier 2 or Tier 3 suppliers that have struggled financially in recent years from the coronavirus pandemic, semiconductor shortage and UAW strike this fall.
“Bigger suppliers are financially strong enough to weather these issues,” he said. “But when it comes to smaller suppliers, they’re not ready for overcapacity in their plants. They need to pay bills, pay workers and they don’t have a lot of money backed up for any missed numbers.”