Ford plans to cut F-150 Lightning production as consumer demand slows

Ford Motor Co. said this week it plans to slash production of the F-150 Lightning pickup at the start of next year by 50%, in response to slowing consumer demand for electric vehicles that the company noted during its third-quarter earnings report.

The decision to reduce Lightning output comes amid the high-profile launch and delivery of the Tesla Cybertruck. Ford's plan, however, reflects months of strategy planning to match output with demand, Ford spokesman Marty Gunsberg said in a statement. He declined to provide additional comment or explanation.

A memo recently sent from Ford to a supplier outlined a plan to go from a weekly run rate of about 3,200 trucks to about 1,600 trucks, starting in January, according to Automotive News, which obtained the memo and first reported the cuts.

Yet Ford executives have foreshadowed change in recent months.

"We feel very good right now. But the future is somewhat unpredictable and volatile. We'll have to see how the market plays out. We're seeing competition increase," Marin Gjaja, chief customer officer for Ford Model e, told reporters on Aug. 1. "We're going to have to adjust with the market ... We look at the U.S. and EVs are growing 40% or more on volume year on year for the automotive industry. That's incredible growth."

His remarks followed a six-week shutdown to expand production capabilities at the Rouge Electric Vehicle Center in Dearborn as the company was seeing a reported dip in demand for EVs industrywide.

Ford builds the bestselling truck in America with the F-Series vehicles and has acknowledged that electric vehicle production will take a number of years to be profitable. Gas-powered vehicles offset billions in EV costs and generate profits for the automaker.

Meanwhile, the company has reported growing demand for hybrid trucks among consumers hesitant to switch to all-battery vehicles. In July, when Ford teased its 2024 F-150 pickup, CEO Jim Farley said the company planned to continue its commitment to gas-powered pickups and focus on hybrids.

At the time, Farley dialed back the Ford forecast to produce 600,000 electric vehicles annually by 2024, not 2023.

Ford sees consumers buying hybrids instead

Ford spotlighted hybrids, which increase fuel efficiency for truck owners while allowing them to go to the gas pump in times of need rather than find a charging station to plug in. As automakers figure out how many EVs to build, and what prices will work, Ford says it will work to tiptoe consumers away from internal combustion engines into electrification.

"We believe demand for our internal combustion and our hybrid portfolio will be ... potentially longer and richer than most expected," Farley said in July. "We made sure Ford is profitable as we move through this ICE-to-EV transition."

F-150 not alone: Silverado, GMC Sierra plans changing

The landscape for Ford and other automakers has changed dramatically.

Ford revealed the Lightning in May 2021. By August 2021, Ford announced plans to double production to meet customer demand. In early 2022, the company shut down its reservation system to manage the overwhelming response. In the summer of 2023, Ford revealed plans to shift hundreds of workers from its Dearborn Truck Plant building gas-powered F-150s over to the Lightning plant.

Ford isn't the only Detroit automaker making adjustments to reflect the changing landscape. General Motors was scheduled to launch its all-electric Chevrolet Silverado in 2024. GM revealed its plans for the Silverado in 2021. In October, GM revealed it would delay production of its all-electric Silverado and GMC Sierra to 2025.

Cybertruck takes all the oxygen out of the room

Meanwhile, Tesla is dominating headlines and social media with its new Cybertruck.

Yet many analysts don't see significant overlap with traditional pickup buyers.

"While the recent news about the Cybertruck may seem to have influenced Ford’s plans for the Lightning, the two announcements are coincidental," Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, told the Detroit Free Press. "Few Cybertruck buyers are cross-shopping the Lightning since they’re targeting different crowds. Ford is responding to slowing growth in the EV market while the Cybertruck has only to fill the demand for Tesla buyers looking for something unique."

Tesla posted on X that the company was "making sci-fi a reality" in announcing its upcoming deliveries.

John McElroy, host of "Autoline After Hours" webcast and podcast, said the Cybertruck can't be compared to the more traditional F-150 Lightning.

"Ford has got to react to the realities in the marketplace. It probably overshot what it thought it was going to be able to sell when the EV euphoria was going on last year," he said. "I don't see Cybertruck so much as a threat to Lightning as a threat to the automotive industry. (The Cybertruck) is such a revolutionary truck in so many ways — design, engineering, manufacturing. It represents a new way of doing vehicles in the automotive business."

Using stainless steel panels eliminates use of a stamping shop and a paint shop for assembly, McElroy noted, "which, by the way, can easily be a $300 million to $500 million investment."

Massively reducing capital investment allows the break-even point to further come down while competitors struggle with more traditional production approaches.

"The list goes on and on," McElroy said. "It helps remind Ford just how far behind it is. Ford is actively working to catch up."

Catching up before 2028 is unlikely based on all that's required to design and build vehicles, he said.

Ford executives have said they're currently identifying ways to cut production costs of the Lightning and Mustang Mach-E to be more competitive. Doug Field, formerly of Apple and Tesla, is now at Ford.

Automakers are asking the Biden Administration to ease up on new regulatory changes that could cost Detroit automakers billions as they work to transition to electric vehicles.

"EVs are not catching on — not as hot as they thought they would be just a year ago," McElroy said.

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Tesla investor wants Ford to succeed

Tesla investor Sawyer Merritt posted to his 587,700 followers on X, formerly known as Twitter, "A part of me is sad about this news cuz (in my opinion) the more EVs on the road the better. Yes this will probably help Tesla to some degree, but Ford selling as many F-150 Lightings instead of ICE F-150s is important to the transition to a sustainable energy future."

Ford Chief Financial Officer John Lawler said last month that Ford is "not not moving forward" on electric plans but just matching capacity with demand. The company is changing tactics in how to execute its strategy, he said.

Being out front on hybrid production, specifically with the F-150, is generating significant revenues that will help Ford generate profits to pay for the ongoing transition to electric vehicles, Lawler said.

Contact Phoebe Wall Howard: 313-618-1034 or phoward@freepress.com. Follow her on Twitter @phoebesaid.

This article originally appeared on Detroit Free Press: Ford plans to cut F-150 Lightning production as demand slows