Ford Halts F-150 Lightning Production Amid High Inventories and Losses.
Overview:
Ford Motor Company has announced a significant production halt for its all-electric F-150 Lightning pickup truck. The shutdown, scheduled from November 18 to January 6, 2025, aims to address high inventories and narrow losses on the electric vehicle (EV) model. This decision includes previously planned holiday downtime at the end of the year.
Reasons Behind the Production Halt:
The primary reason for the production halt is the high inventory levels of the F-150 Lightning. Ford’s EV operations are expected to incur a $5 billion loss this year, prompting the company to take measures to reduce excess stock and control costs. Despite an 86% increase in sales this year, Ford has been subsidizing sales of the F-150 Lightning, including offering dealers up to $1,500 for each 2024 model ordered from new regional EV distribution centers.
The production halt is a significant move for Ford, which had previously touted the F-150 Lightning as a crucial part of its EV strategy. The decision reflects the challenges faced by the company in the competitive EV market, where sales have not grown as quickly as expected due to higher costs and reluctant consumer adoption. Ford’s overall days’ supply of new vehicles was 112 days as of the end of September, with the F-150 Lightning at 100 days.
Ford Halts F-150 Lightning Production Amid High Inventories and Losses.
Ford’s decision comes amid increasing competition in the EV market. Rivals such as Tesla, GM, and other automakers are rolling out new electric pickup trucks, including the Tesla Cybertruck, Chevy Silverado EV, and GMC Sierra EV. These competitors have been gaining market share, with Tesla’s Cybertruck being the third best-selling EV in the US in Q3.
Despite the production halt, Ford remains committed to its EV strategy. CEO Jim Farley has expressed confidence in the company’s direction, stating that the next generation of EVs will be less costly and more profitable. Ford plans to introduce a mid-size electric pickup in 2027, aiming to match the cost structure of Chinese OEMs building in Mexico.
