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Automotive

Ford adjusts EV strategy, reduces F-150 Lightning output

In a significant shift in its electric vehicle (EV) strategy, Ford Motor Company announced on Friday a reduction in the production of its F-150 Lightning pickup truck, reflecting a broader slowdown in EV demand. The decision marks a notable change for the second-largest automaker in the United States, which had previously been ramping up its efforts in the electric vehicle market.

Ford adjusts EV strategy, reduces F-150 Lightning output

The production adjustment will take effect from April 1 at Ford’s Michigan Rouge Electric Vehicle Center, scaling down to a single shift. This move follows an earlier decision in October to cut one of the three shifts at the same Michigan facility. The reduction in F-150 Lightning production is indicative of a larger trend in the EV truck market, with General Motors also delaying the opening of a $4 billion electric truck plant in Michigan.

In December, Ford alerted its suppliers of a significant reduction in its production target for the F-150 Lightning, aiming for approximately 1,600 units per week starting January, a sharp decrease from the initially planned 3,200 units. This scaling back occurs amidst ongoing discussions in the automotive industry regarding the Biden Administration’s aggressive emission regulations, which aim for 67% of new vehicles to be electric by 2032.

Ford’s production cutback will affect 1,400 workers at the Michigan plant. The company has outlined plans to redistribute these employees, with about 700 transferring to the Michigan Assembly Plant. The remaining workers will be reassigned within the Rouge Complex or other Michigan facilities, or they may opt for a special retirement program.

Despite these changes, Ford anticipates continued growth in global EV sales in 2024, albeit at a slower rate than initially expected. The impact of Ford’s production adjustment extends beyond the F-150 Lightning, potentially affecting employees at component plants associated with the truck’s production. Ford’s financial struggles with its EVs have been evident, with the company losing an estimated $36,000 on each EV delivered to dealers in the third quarter.

In response, Ford has adjusted its strategy, slowing down the expansion of EVs, increasing investment in its commercial vehicle unit, and planning a significant increase in hybrid vehicle sales over the next five years. Ford’s shift in focus reflects a broader industry trend, with legacy automakers increasingly turning their attention to hybrid models.

This pivot comes as consumer preference leans more towards hybrids over fully electric models. In a contrasting move to its EV production strategy, Ford also announced the addition of a third shift at its Michigan assembly plant, creating nearly 900 jobs to boost production of the Bronco SUVs and Ranger pickups.

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