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This week, Ford introduced it’ll finish manufacturing of the F-150 Lightning, the electrical model of its best-selling pickup truck, and take a $19.5 billion write-down tied to its present and deliberate EV packages. The transfer marks a pointy reversal from commitments Ford made eight years in the past to transition towards an all-electric future. Since 2023, the corporate’s EV enterprise has misplaced greater than $13 billion. The F-150 Lightning was designed to bridge Ford’s core truck patrons to electrical automobiles. As an alternative, a mix of coverage headwinds, overestimated demand, rising prices and weak advertising undermined this system.
At its launch in 2022, Ford promoted the Lightning with a video exhibiting a prototype pulling a one-million-pound practice. In follow, the truck is rated to tow as much as 10,000 kilos when correctly outfitted, however doing so cuts its vary roughly in half, from about 320 miles to 160 miles. The industrial “raised expectations of what they might do, and when individuals realized how a lot vary is impacted by towing a big trailer, they had been actually upset,” Sam Abuelsamid, an automotive analyst and Vice President of Market Analysis at Telemetry, advised Observer.
Abuelsamid famous that gasoline-powered vehicles face comparable vary penalties whereas towing. “The Lightning is definitely higher than the fuel model of the F-150 in just about each different method.”
Nonetheless, gross sales by no means matched Ford’s ambitions. The automaker had anticipated to promote 40,000 to 150,000 items a 12 months, however even at its peak in 2024, it bought simply 33,5100 items. In contrast, the gas-powered F-150 continues to promote tons of of 1000’s of items yearly.
Anticipating excessive demand initially, Ford relied closely on parts shared with different automobiles in its lineup to scale manufacturing shortly, which drove up prices and made the Lightning much less environment friendly to construct.
“As an alternative of ramping up capability briefly order, they need to have invested in optimizing programs, which might have additionally benefited different electrical Ford merchandise just like the Mach-E and e-Transit,” Abuelsamid stated. “With a lot underutilized capability, the mounted prices had been method greater than they need to have been, which led to a variety of the losses.”
Timing additionally labored in opposition to the Lightning. When the electrical truck debuted in 2022, Russia had simply invaded Ukraine, disrupting provides of nickel, a key materials in EV batteries. Costs surged, and Ford handed these greater prices on to clients, elevating costs and additional dampening demand.
Ford pivots to hybrid and A.I. information facilities
Ford is now attempting to recoup elements of its electrification funding by introducing a hybrid model of F-150 and shift some battery manufacturing towards A.I. information facilities.
Ford is selling an extended-range electrical automobile, or EREV, which makes use of a gasoline engine to generate electrical energy for the battery. EREVs intention to ease issues about charging time and vary, however Ford hasn’t provided a timeline for an EREV F-150.
The corporate can also be repurposing a few of its EV battery vegetation into battery programs for information facilities, a shift different battery makers have already made. LG Power Resolution took an identical strategy at its Holland, Mich., plant, which was initially slated to provide nickel manganese cobalt (NMC) cells for electrical automobiles. After buying GM’s stake in a joint-venture facility in Lansing, Mich., LG retooled the Holland plant to provide lithium iron phosphate (LIP) cells for grid storage and information facilities.
“The information heart wager, usually, just isn’t a foul concept. Ford has a battery manufacturing facility, and there’s a completely big demand for power storage programs from information facilities,” Abuelsamid stated. “The distinction…is in timing.”
For Ford, the transition carries threat. “Ford has a plant configured for producing NMC pouch cells that they now must retool for LFP prismatic cells,” Abuelsamid added. “The revised tools will in all probability be coming from China. Which means they received’t be producing once more till someday in 2027 on the earliest, paying big tariffs on the brand new tools and risking the information heart bubble bursting earlier than then.”
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