Photo: Ford
Ford is cutting one shift at the Rouge Electric Vehicle Center, where it builds the F-150 Lightning. Despite many layoffs caused by strikes, this has nothing to do with UAW actions. Instead, Ford might be facing a demand problem for the F-150 Lightning, forcing it to cut production.
Ford F-150 Lightning has been considered one of the most successful electric vehicles in the US market and the number one electric pickup for much of the last year. However, the situation didn't last, and Ford had to solve countless problems with the Lightning in 2023. Besides that, the Blue Oval is battling supply chain problems and strikes affecting its ability to build cars affordably.
The first-quarter F-150 Lightning sales were affected by a battery fire, which caused an extended production halt at Ford's Rouge Electric Vehicle Center (REVC). You would've expected this to cause a massive backlog as more people wanted to buy the truck. Instead, Ford tossed the reservation program when it launched the 2023 model year in May. This was a clear indication that demand for its electric pickup truck was not that high after all.
Subsequent market moves and disappointing quarterly results later confirmed this impression. Ford cut the F-150 Lightning's wait time in June, citing increased production capacity at REVC, where the electric pickup is produced. In July, dealers complained about unsold inventory and started refusing allocations, while sales results failed to impress despite the positive spin that Ford PR tried to give.
We know the situation was bad because, in mid-July, Ford cut F-150 Lightning prices by as much as $10,000. Weeks later, Ford admitted the plan to reach 600,000 EVs production capacity in 2023 was unrealistic and pushed it back to the end of 2024 instead. Losses at Ford's EV division Model e were also adjusted to $4.5 billion, up from the $3 billion estimated for 2023.
Now, more clouds are gathering over Ford's Rouge EV Center, as a UAW memo seen by the Wall Street Journal shows that Ford will cancel a shift at the factory. According to the memo, the shift cancelation is inevitable because "sales of the Lightning have tanked."
Ford denied this was caused by the lack of demand for its electric pickup and cited "multiple constraints, including the supply chain and working through processing and delivering vehicles held for quality checks after restarting production in August." This has led to a paused shift affecting 700 workers. Ford said it would rotate the layoffs between the three shifts but declined to say how long the situation would last.
Ford announced in August that production line upgrades at REVC would allow tripling the F-150 Lightning output to 150,000 units per year. The announcement surprised everyone, considering that Ford sold less than 9,000 trucks in the first half of the year. Everyone was wondering if Ford had enough customers to buy the increased production.
Soon after the upgrades allowed production to restart, Ford stopped it again to perform "additional quality checks" at REVC. This will undoubtedly reflect on Ford's Q3 and possibly Q4 results. The carmaker canceled dealer orders for the 2023 model year to investigate the problem and will only resume production with the 2024 model year.
The first-quarter F-150 Lightning sales were affected by a battery fire, which caused an extended production halt at Ford's Rouge Electric Vehicle Center (REVC). You would've expected this to cause a massive backlog as more people wanted to buy the truck. Instead, Ford tossed the reservation program when it launched the 2023 model year in May. This was a clear indication that demand for its electric pickup truck was not that high after all.
Subsequent market moves and disappointing quarterly results later confirmed this impression. Ford cut the F-150 Lightning's wait time in June, citing increased production capacity at REVC, where the electric pickup is produced. In July, dealers complained about unsold inventory and started refusing allocations, while sales results failed to impress despite the positive spin that Ford PR tried to give.
We know the situation was bad because, in mid-July, Ford cut F-150 Lightning prices by as much as $10,000. Weeks later, Ford admitted the plan to reach 600,000 EVs production capacity in 2023 was unrealistic and pushed it back to the end of 2024 instead. Losses at Ford's EV division Model e were also adjusted to $4.5 billion, up from the $3 billion estimated for 2023.
Now, more clouds are gathering over Ford's Rouge EV Center, as a UAW memo seen by the Wall Street Journal shows that Ford will cancel a shift at the factory. According to the memo, the shift cancelation is inevitable because "sales of the Lightning have tanked."
Ford denied this was caused by the lack of demand for its electric pickup and cited "multiple constraints, including the supply chain and working through processing and delivering vehicles held for quality checks after restarting production in August." This has led to a paused shift affecting 700 workers. Ford said it would rotate the layoffs between the three shifts but declined to say how long the situation would last.
Ford announced in August that production line upgrades at REVC would allow tripling the F-150 Lightning output to 150,000 units per year. The announcement surprised everyone, considering that Ford sold less than 9,000 trucks in the first half of the year. Everyone was wondering if Ford had enough customers to buy the increased production.
Soon after the upgrades allowed production to restart, Ford stopped it again to perform "additional quality checks" at REVC. This will undoubtedly reflect on Ford's Q3 and possibly Q4 results. The carmaker canceled dealer orders for the 2023 model year to investigate the problem and will only resume production with the 2024 model year.
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