Ford (F) confirmed that it has temporarily cut a shift at its F-150 Lightning electric pickup plant in Detroit, possibly signaling demand is drying up for the highly rated EV.
“We are adjusting the schedule at the Rouge Electric Vehicle Center because of multiple constraints, including the supply chain and working through processing and delivering vehicles held for quality checks after restarting production in August,” Ford said in a statement regarding the shift reduction. Ford said 700 jobs would be affected by the shift cut, and that the jobs impacted were not due to the ongoing UAW stand up strikes.
Despite this statement, however, it appears there may be more to that story. The Wall Street Journal was first to report last Friday that Ford was considering cutting a shift at its Rouge electric vehicle plant, where the automaker builds the Lightning, citing a memo from an UAW official concerned about demand. “It doesn’t take a rocket scientist to figure out that our sales for the Lightning have tanked,” the memo reportedly also said.
This would also explain the automaker’s recent decision to introduce big price cuts for the current 2023 F-150 Lightning EV, with Ford offering $7,500 in incentives for the Lariat and Platinum trims — which combined with the federal tax cut would potentially be a whopping $15,000 off the sticker price. Prior to this, Ford had cut prices on some trims of the Lightning back in July.
"We think Ford’s announcement is emblematic of the difficulties traditional automakers have faced with ramping up EV production, but also reflects consumer demand for EVs that wasn’t what it once appeared to be in terms of the robust reservation counts for certain new models,” CFRA analyst Garrett Nelson said to Yahoo Finance regarding the shift cut. “There’s been a growing mismatch between what automakers are trying to sell and what consumers want to buy.”
Ford’s production shift cut follows reports that the automaker had recently canceled dealer stock orders for the Lightning in the past month. Dealer stock orders are those that dealers place to have inventory in stock for customers who are interested in purchasing off the lot, as opposed to special order. At the time, Ford said in a statement to Yahoo Finance that this wasn’t due to any particular issue, only that it had "canceled some dealer stock orders not submitted as pre-sold for [model year 2023] as part of our preparations to changeover to [model year 2024] … No customer orders have been canceled by Ford."
The confluence of shift cuts, pricing incentives, and canceling of dealer stock point to possible deterioration in F-150 Lightning demand, just as the automaker has said it will ramp up production of its traditional gas and hybrid F-150 models. Ford reported in Q3 that Lightning sales fell 46% year over year to 3,503 vehicles sold.
“Ford and other automakers are starting to reconsider their EV growth strategies, shifting away from pure battery EVs more towards plug-in hybrids and even ICEs [internal combustion engines]," CFRA’s Nelson said.
Investors will be looking for more color on the Lightning — and overall EV demand — when Ford reports earnings after market close on Tuesday, Oct. 26.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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