The Ford F-150 Lightning was supposed to be the Blue Oval's big EV win. I mean, you take the best-selling vehicle in the U.S., convert it to electric, and unleash it on the masses. Surely that's a recipe for success, right? And in many ways, it has been—just with sales, but not so much profits.
Now, Ford is now idling production of the Lightning throughout the end of the year to "adjust production for an optimal mix of sales growth and profitability." In other words, Ford seems to be waiting for dealers to sell more of what's on lots before it cranks out more.
Welcome back to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about Ford plans to idle F-150 Lightning production throughout the end of 2024, Scout's use of Rivian's software, and BYD overtaking Tesla's revenue. Let's jump in.
30%: Ford Is Idling F-150 Lightning Production For The Rest Of The Year
Ford is hitting the brakes—figuratively and literally—on production of the Ford F-150 Lightning throughout the end of the year. The move signals another unexpected bump in the road for the electrified version of America's best-selling truck, sparking questions on whether or not the Lightning hype train has officially left the station. In a statement to Automotive News, Ford confirmed that the production pause will start in mid-November and is planned to last seven weeks (inclusive of a standard pre-planned, one-week holiday vacation). Assembly will resume in January.
The F-150 Lightning is an incredibly important EV for Ford. In Fact, Ford's CEO, Jim Farley, and Executive Chair, Bill Ford, compared the pickup to the 21st-century Model T. It was heralded as the gateway for Ford's EV transition, though adoption has proven slower than anticipated. In fact, the automaker has already scaled back production targets to half of what was originally expected for 2024 and slashed two-thirds of the workforce at the Rouge Electric Vehicle Center where the Lightning is assembled.
Another slap in the face has come directly from Tesla. The F-150 Lightning, despite sales being up 86%, lost its title of best-selling EV pickup to the Cybertruck and the F-Series pickup as a whole is at risk of losing its 42-year crown as best-selling vehicle in America to the Tesla Model Y. Granted, those Cybertruck sales have largely been the fulfillment of years of orders, so it will be several months before we see if it has long-term juice or not.
According to data from Cox Automotive cited by Automotive News, Ford has a 100-day supply of F-150s on-hand at the end of September. Generally, dealers want cars on lots for 30-60 days at most. The firm didn't specify a specific estimate for the Lightning, specifically, but did mention a 128-day supply of the Ford E-Transit and a 130-day supply of Mustang Mach-Es. Q4 is historically a great quarter for automakers, so Ford likely has a large surplus of Lightnings that it's hoping to clear out during this time. But no matter how you shape it, that excess supply isn't exactly a great look for Ford's EV program.
The automaker is also facing some rather large losses in its EV department. It revealed that it's more than $5 billion in the hole, including a more than $1 billion loss on a canceled three-row SUV that was realized last quarter. Ford says that it has since slashed EV-related costs by $500 million.
Still, Farley remains optimistic about the future of Ford's EV program. During the company's third-quarter earnings call, Farley said that he "wouldn’t trade" the brand's EV strategy for any of the Blue Oval's competitors. And, despite the "slow uptake of EVs," Ford believes that their moves will help to create a solid long-term foothold on the market.
60%: Scout Will Use Rivian's Zonal Architecture, Too
Volkswagen's latest sub-brand, Scout Motors, looks like it's about to pull off one of the biggest wins for VW's U.S. operations in a very long time. Its secret? Well, aside from re-using a classic American nameplate with some very customer-focused vehicles, is a new high-tech partnership that it's borrowing from its parent company.
We're talking about that fancy-pants new "zonal architecture" approach that's all the rage in up-and-coming EVs. In case you missed it, Volkswagen announced it's shacking up with Rivian in a $5 billion software deal that includes development, licensing, and use of Rivian's zonal architecture.
Scout's CEO told InsideEVs that their vehicles are likely to use the zonal architecture developed in that joint venture—but not anything existing from Rivian. That was confirmed this week by Rivian's Chief Software Officer, Wassym Bensaid, revealed that Scout would, in fact, take advantage of this tech sharing during a discussion at TechCrunch Disrupt 2024:
The operating system will be part of the Scout product[s] similar to other products from VW brands, whether it's Porsche, whether it's Bentley, Lamborghini, or VW. Again each brand will continue to have its own identity [and] features.
So what exactly is zonal architecture, and why should you care? It's the next big thing in the automotive world—changing the basic way that a car thinks and talks to components.
Most cars today run a mesh of complicated wiring and harnesses from individual controllers to components (think: a powertrain ECU, a Body Control Module to control window switches, and ones for HVAC, ABS, HVAC, Airbags, and the list goes on). Think of it like an organized mess of spaghetti that's kind of tying all of the electrical components under the hood to their brains.
A vehicle with a zonal architecture network instead links actuators to local controllers that talk on a central network. This is more like organizing components into individual rooms within a house and helps to cut down on wiring by a factor of miles in some cars and greatly reduces the electrical complexity in exchange for more software—but, hey, Software Defined Vehicles are the future, after all.
Rivian and VW officially solidified their joint effort on software earlier this year with an initial $1 billion in up-front funding supplied by the Germans and a pledge for another $4 billion later on. Together, the joint venture will help Volkswagen do something that it hasn't been able to do for quite some time—get the software right. It's been one of the company's biggest burdens despite the automaker having a close-knit software team, Cariad, at its fingertips. Perhaps with Rivian handling the underlying OS and electrical architecture, the automaker can dig itself out of its digital hole.
As for Rivian, well, they seem enamored with the idea of Scout (and the potentially lucrative revenue the joint venture will get from the licensing deal.) The partnership might not end with Volkswagen, as Bensaid hinted that Rivian could already be in talks with another automaker to use its zonal architecture as well, and may drop more news as early as "next year."
90%: BYD Just Made More Money Than Tesla For The First Time Ever
Chinese automaker BYD has been butting up against Tesla's crown for some time now. The two EV giants have duked it out for the better part of a year with Tesla adamant on holding its leading position. However, it looks like BYD is putting some major pressure on Tesla as its quarterly earnings leapfrogged Tesla's for the first time ever in Q3 2024.
BYD's quarterly revenue shot up by 24% in Q3, hitting a massive $28.2 billion over the course of just three months. Surprisingly, this number was actually less than analysts expected, but it still managed to beat out Tesla's still impressive $25.2 billion in global sales over the same period.
In total, BYD sold 1,129,256 cars—443,426 of which were battery-electric. Tesla sold 462,890 over the same period, or 4.4% more EVs than BYD, but 59% fewer vehicles overall. Tesla's market cap is 698% higher than BYD's, bolstered primarily by its promises of AI and full self-driving. That being said, despite BYD's revenue being higher than Tesla's, the Chinese automaker's net income actually fell short. BYD posted $1.6 billion in profits, which, while impressive, was less than Tesla's $2.2 billion.
Don't get it twisted, BYD isn't done yet. In fact, its best quarter of the year could be underway right now. Bloomberg has the scoop:
Earnings prospects for BYD in the final quarter look even stronger as it benefits from its leading sales position in China, the world’s biggest car market. The last three months of any year are usually the peak purchasing season, and on top of subsidies, central government agencies have been ordered to boost EV purchases.
BYD is also on track to meet its revised annual sales target of 4 million vehicles, having sold around 2.74 million vehicles through September. Citibank Inc. estimates BYD could sell as many as 500,000 units per month by November.
One thing that could throw a wrench BYD's plans for EV domination are the global tariffs being enacted to stop its expansion of cars funded through "unfair subsidization." The U.S. and Canada have both enacted 100% duty fees on Chinese EVs (BYD doesn't currently sell passenger cars in either market) and Europe will soon begin to impose tariffs totaling 27% on BYD's imports. The brand also plans to expand its market share in Mexico into 2025 with a projected output of 100,000 cars.
100%: Where Did VW's EV Program Go Wrong?
I've said it before: I'm a big fan of what Scout is doing. The VW spin-off is building a truck catered to its ideal audience, and all signs are pointing to the brand really knowing its customers. But its parent company? Maybe not so much.
Volkswagen is hurting. Like, bad. Plants are closing and its brands aren't earning the money they need to stay afloat long-term. Its future hinges on the success of its EV programs. There's just one problem: consumers aren't biting.
Sure, driving the ID family of vehicles feels more like operating a microwave than a car, and there are software bugs. Oh, and the ID Buzz is priced unreasonably for most consumers. VW clearly lost its way somewhere while developing its EV strategy. Where exactly did things go wrong? Let me know your thoughts in the comments.
