During Ford’s third-quarter 2024 earnings call on October 28, Ford (F) CEO Jim Farley noted that the current “slow uptake of EVs” is a significant challenge the automaker faces, but voiced his confidence in the overall electric vehicle strategy.
Despite calling it an "area of strength" that he "wouldn't trade for any of our competitors," Ford's EV division, known internally as Ford Model e, lost $1.2 billion in EBIT during Q3 2024, and is expected to lose about $5 billion by the year's end.
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While the loss represented an improvement of 7.9% compared to the prior year's numbers, Farley maintained that Ford is trying to survive amidst harder and harsher market conditions.
"In our home market in the U.S., no OEM is immune," Farley said. "Since Q1 of last year, EV volumes have grown 35% while revenues in total are flat at $14 billion. That means the progress on volume has been fully offset by prices."
Ford dims the Lightning
As first reported by Automotive News, Ford recently informed its suppliers and plant officials of the plan to temporarily stop building new units of its F-150 Lightning.
Production of the electric version of Ford's signature pickup truck will shut down at the Rogue Electric Vehicle Center in Dearborn, Mich., for seven weeks, beginning at the end of the day on November 15 and ending on January 6. This period includes Ford's weeklong holiday break.
In a statement to the publication, Ford cited lower-than-expected demand for the Lightning as the basis for the move.
“We continue to adjust production for an optimal mix of sales growth and profitability,” Ford said in a statement.
Related: Ford reveals some bad news about its electric vehicles
According to Ford's website, the Rogue Electric Vehicle Center solely makes the Ford F-150 Lightning and employs about 800 employees as of April 2024, including approximately 750 hourly employees.
The factory making the F-150 Lightning is already operating at just a fraction of its peak capacity. On January 19, the Blue Oval announced that over 1,400 people, or two-thirds of Rogue Electric line workers, were to move to other Ford facilities or retire once the company starts making Lightning during just one daily shift starting in April.
At the time, Ford estimated that 700 of the 1,400 affected workers would transfer to the Michigan Assembly plant in nearby Wayne, Mich. to help increase production capacity of the popular Ranger pickup and Bronco off-roader. The 700 workers joined 900 new hires to form a 1,600-person third crew that helped the factory shift from five days of production to seven.
In a statement then, Ford CEO Jim Farley interpreted this as a positive indication of the company's ability to react to market conditions.
“We are taking advantage of our manufacturing flexibility to offer customers choices while balancing our growth and profitability. Customers love the F-150 Lightning, America's best-selling EV pickup,” Farley said. “We see a bright future for electric vehicles for specific consumers, especially with our upcoming digitally advanced EVs and access to Tesla's charging network beginning this quarter."
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The news of the plant's temporary shutdown follows recent reports that Ford is attempting to clear out excess F-150 Lightning inventory by offering dealers additional incentives to sell them.
According to CarsDirect, Ford dealers were notified via bulletin that between October 15 and November 15, dealers can earn an extra $1,000 per XLT, Flash, Lariat and Platinum trim F-150 Lightning they order from a Ford Retail Replenishment Center rather than directly from the factory.
Ford's Retail Replenishment Centers, or RRCs for short, are a key part of its distribution and are designed to help Ford dealers reduce the cost of carrying inventory on their lots and to speed up the delivery of EVs to customers.
Dealers who anticipate selling 9 or more Lightnings from RRC stock can earn $1,500 per unit, up to a maximum of 15 trucks, and a bonus of $22,500.
Related: Ford CEO admits to a dirty secret that can benefit automaker
But despite Ford shuttering the production line, Ford F-150 Lightning sales remain strong.
According to sales data from Cox Automotive and Kelley Blue Book, sales of Ford's electric truck are up 86% through September 2024, selling 22,807 units so far this year.
However, Cox and KBB data indicates that the Lightning is no longer the electric pickup truck sales leader. Sales of the Ford's F-150 Lightning are eclipsed by Tesla's controversial Cybertruck, which sold 28,250 through September 2024.
The Ford Motor Company, which trades on the New York Stock Exchange under the ticker F, is down 1.86% from the opening bell, trading at $10.28 per share at the time of writing.
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