Ford (NYSE: F) would keep the production of its F-150 Lightning suspended for some more time as it tries to address a potential battery issue.
The F-150 Lightning is the all-electric version of the company’s best-selling F-150 pickup truck. While Ford does not provide the breakup of its profitability, the F-series vehicles are believed to be the biggest profit center for America’s second-largest automaker.
Last year, Ford started offering the all-electric version of the F-150 and took the first mover advantage. Tesla’s Cybertruck is running behind schedule and mass production is not expected until 2024.
There are other electric pickup models though, including from Rivian. However, the competition is not much in the electric pickup industry which gave Ford the luxury to raise prices twice over the last year.
In contrast, it lowered prices for its Mach-E shortly after Tesla’s price cuts. Once snubbed as a niche automaker, Tesla is now pretty much setting the automotive industry’s direction.
With a YTD gain of almost 60%, Tesla is the second best-performing S&P 500 stock of the year. There is a guide on how beginners can buy Tesla stock.
Coming back to Ford’s F-150, its success is quite crucial for the company. However, the company suspended production of the model earlier in the month. Now, Tech Crunch has reported that production would remain suspended for another month.
Ford F-150 Production to Remain Suspended for Another Week
Ford and its battery partner SK have meanwhile identified the problem. In its response, Ford said that SK has begun battery production.
It however added, “It will take SK time to ensure they are back to building high-quality cells and to deliver them to the Lightning production line. Ford’s Rouge Electric Vehicle Center will suspend production through the end of next week, and we’ll continue to provide updates.”
The company also clarified that it does not believe that the F-150 Lightning vehicles delivered to buyers suffer from the battery issue. It added that cars with dealers are still open for sale.
Meanwhile, the F-150 battery issue is yet another execution trouble for Ford. During the company’s Q4 2022 earnings call its CEO Jim Farley who took over in late 2020 only, talked about execution issues and how they dented the company’s profitability in the quarter.
EV Producers Face Production Snags, Demand Woes, and Price War
Ford is not the only company facing production issues though. Recently, Lordstown Motors recalled its Endurance pickup to fix quality issues. The company also suspended production.
Lordstown was anyways battling multiple issues and also sold its Lordstown plant to Foxconn. The Taiwan-based contract manufacturer sees EV production as a big opportunity and wants to even make cars for Tesla one day.
There are also demand woes for EV companies which became quite apparent in Lucid Motors’ Q4 2022 earnings call. The stock is meanwhile still comfortably above its all-time lows amid rumors of a possible acquisition by Saudi Arabia.
Overall, the party for EV companies is over now. Notably, Sono Group, which was working on Sion solar electric car has now suspended the program to focus on solar technology.
As for Ford, the company has decades of car production expertise but still needs to prove its prowess in electric cars. The company was the largest EV seller in the US in 2022 but in absolute terms, it trails Tesla by a wide margin.
It has big plans though and intends to end 2023 with an annual production capacity of 600,000 cars which it predicts would rise to 2 million by 2026. However, as the initial hiccups have shown, the EV transition is not easy as many might have thought.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Comments