Electric vehicles are huge losers for automakers: Michael Buschbacher
Boyden Gray PLLC partner Michael Buschbacher discusses concerns of an electric vehicle mandate on The Bottom Line.
Ford announced Thursday that it will temporarily pause production of its electric F-150 Lightning for several weeks amid sluggish consumer demand for EVs.
The automaker plans to idle the Rouge Electric Vehicle Plant, which is located outside of Detroit and makes the F-150 Lightning, after the end of the shift on Nov. 15. Production will resume on Jan. 6.
The plant currently operates on weekdays and, like Ford's other U.S. plants, already has a scheduled holiday week starting on Dec. 23.
"We continue to adjust production for an optimal mix of sales growth and profitability," a Ford spokesperson said about the move.
Ford has cut back on its EV push over the past year and announced in August that it was canceling a planned three-row electric SUV and also delaying a new electric version of the best-selling F-150 pickup.
FORD CANCELS PLANS FOR ELECTRIC THREE-ROW SUV
Ford announced it will temporarily idle production of the F-150 Lightning to better align production with consumer demand. (JEFF KOWALSKY/AFP via Getty Images / Getty Images)
The company has opted to put more investment into hybrid vehicles over EVs recently amid substantial losses in its EV division due to tepid consumer demand.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| F | FORD MOTOR CO. | 10.47 | +0.06 | +0.58% |
Ford said earlier this month that its U.S. EV sales are up 45% this year and that sales of F-150 Lightning EV pickups more than doubled to 7,100 in the three months leading up to Sept. 30, even though they represent just 3.6% of all F-Series pickup sales.
FORD WALKS BACK 'WOKE' DEI POLICIES, JOINING GROWING LIST OF US COMPANIES
Ford's EV division has lost billions in recent years. (Photo by Matt Cardy/Getty Images / Getty Images)
CEO Jim Farley has said that one of the main solutions to improving EV sales is to bring down production costs – a key goal for the company given it's expected to lose roughly $5 billion on EVs this year. Ford is one of the few automakers to publicly report EV sales separately.
Other major U.S. automakers are encountering similar growing pains with respect to their EV plans.
The Wall Street Journal reported that GM has delayed its plans for a new Buick EV model and also a battery-making factory, and expects its EV business will lose money next year.
FORD WALKS BACK 'WOKE' DEI POLICIES, JOINING GROWING LIST OF US COMPANIES
Ford and other U.S. automakers have struggled to spur demand for EVs. (David Paul Morris/Bloomberg via Getty Images / Getty Images)
Automakers' margins in the EV space have also been compressed over the last year by a price war with Tesla, which temporarily cut prices on several occasions to stimulate consumer demand.
U.S. car manufacturers are also facing the threat of potential future competition from lower-cost Chinese EVs.
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While they aren't currently sold in the U.S. and face trade barriers – President Biden imposed a 100% tariff on Chinese EVs and former President Trump said he would raise the tariff to 200% – Farley has called the prospect of their entry into the U.S. market an "existential threat."
Reuters contributed to this report.
