Ford Responds to Changing Market Demand
Ford is planning to reduce production of its flagship F-150 Lightning electric pickup truck by half in 2024, according to a report by CNBC. This move comes as the company faces cooling demand for electric vehicles (EVs) and increased competition from Elon Musk's Cybertruck.
Reduction in Production Numbers
The automaker currently manufactures 3,200 electric Ford F-150s per week, but that number is expected to decrease to 1,600 next year. The decision to cut production is a strategic response to the changing market demand, as stated in a memo obtained by Automotive News.
Challenges in the EV Market
Despite the overall growth of the EV market, there are challenges that Ford and other automakers are facing. One of the main factors impacting demand is the high price of EVs, which makes some customers hesitant to pay a premium for battery-powered vehicles. Reliability concerns also play a role in the decision-making process.
Competition with Cybertruck
The F-150 Lightning is Ford's flagship EV and a direct competitor to Tesla's Cybertruck. Elon Musk has often compared the two vehicles, highlighting the capabilities of the Cybertruck in videos. However, Ford CEO Jim Farley has dismissed the threat of the Cybertruck, stating that Ford makes trucks for "real people who do real work."
Impact on Ford's EV Ambitions
The initial launch of the electric F-150 Lightning in 2022 was successful, leading Ford to expand production capacity. However, the recent decline in demand for EVs has affected Ford's overall EV ambitions. The company has experienced an accumulation of unsold F-150 Lightnings and Mustang Mach-Es in dealer lots.
Adjusting Investment Plans
In response to the changing market dynamics, Ford has made adjustments to its investment plans. The automaker has postponed $12 billion in EV manufacturing investments and has halted the construction of a battery plant in Kentucky. Additionally, a facility in Michigan is being scaled back.
Ford's decision to reduce production of the F-150 Lightning reflects the need to align with market demand and adapt to the competitive landscape. As the EV market continues to evolve, automakers must navigate changing consumer preferences and optimize their production strategies.
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By: tcarter@insider.com (Tom Carter)
Title: Ford to Cut Production of F-150 Lightning EV Pickup in Half Amid Cooling Demand
Sourced From: www.businessinsider.com/ford-cuts-production-of-f150-lightning-cybertruck-rival-ev-demand-2023-12
Published Date: Tue, 12 Dec 2023 11:38:01 +0000
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