Ford Motor Company this week announced it will make major cuts to the production of its F-150 Lightning truck, which was once touted as the future of electric vehicles.
Some 1,400 employees will be cut from the production at the Rouge Electric Vehicle Center, as demand for EVs plummets.
Ford initially planned to produce around 3,200 F-150 Lightnings per week at the Rouge Electric Vehicle Center in Dearborn, Michigan, but unrutply changed its plans after announcing last month it was cutting its production of the trucks in half.
As the company struggles to sell its all-electric vehicles to consumers, Ford slashed $12 billion in EV investments as the transition from gas to electric has become a non-starter.
According to Bloomberg News, the demand for gas vehicles remained high, prompting the automaker to hire 900 new employees and transfer 700 employees who are being pulled off the F-150 Lightning to its Michigan Assembly plant.
The news comes after rental car company Hertz announced it was dumping tens of thousands of electric vehicles from its fleet, citing low demand.
Bloomberg News reported:
“The dramatic about-face, after Hertz announced plans in 2021 to buy 100,000 Tesla Inc. vehicles, underscores the waning demand for all-electric cars in the US.”
“EV sales growth slowed sharply over the course of 2023, rising just 1.3% in the final quarter as consumers were put off by high costs and interest rates.”
“We are taking advantage of our manufacturing flexibility to offer customers choices while balancing our growth and profitability,” said Ford CEO Jim Farley in a statement.
Reuters reported:
Ford sold 24,165 F-150 Lightning trucks last year in the United States, up 55% over 2022, out of about 750,000 total F-150 U.S. sales. Ford shares were up 1% in mid-day Friday trading.
Ford in August had said the plant that builds F-150 Lightning could hit a 150,000-vehicle annualized production rate by October after saying in 2022 it would double EV truck production.
The Dearborn automaker said Friday it would add a third crew and create nearly 900 jobs at its Michigan assembly plant to increase production of gas-powered Bronco SUVs and Ranger pickups.
The F-150 Lightning production cut comes at a time when Detroit automakers are protesting that the Biden Administration is going too far with proposals to use emissions rules that would result in 67% of all new vehicles in 2032 being EVs. On Friday, the Environmental Protection Agency (EPA) submitted its proposal to finalize vehicle requirements to the White House for review.
The Republican-led U.S. House in December voted to bar the EPA from moving forward with the planned vehicle emissions regulations, drawing a veto threat from the White House.
Former President Donald Trump, who is seeking to return to the White House, has vowed to reverse the Biden administration’s EV rules, while the White House has touted automakers significant EV and battery production investments along with government funding of new EV charging.
Ford said Friday the move impacts 1,400 workers at the plant. Roughly 700 will transfer to its Michigan Assembly Plant and others will be placed in roles at the Rouge Complex or other facilities in Michigan, or take advantage of a special retirement program.
The automaker sees continued growth in global EV sales in 2024, though expects it to be “less than anticipated.”
Ford said a few dozen employees could be impacted at component plants supporting F-150 Lightning production.
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