Just two months ago, Ford (F +3.66%) announced a new electric vehicle platform that it will build future EVs on. Ford CEO Jim Farley said that we've all lived through automakers giving EVs too many "good college tries" without any success.
Now, just two months later, there are reports that Ford is about to end production of its F-150 Lightning -- the best-selling EV pickup truck in the U.S.
At best, ending production of the electric F-150 is sending mixed signals to buyers and investors. At worst, it's an admission that selling EVs isn't working for Ford. Is Ford already shifting its EV strategy following its doubling down on EVs just two months ago? Not exactly, but it's undoubtedly not instilling confidence that the company can succeed with EVs.
Image source: Ford.
Even the Lightning can't brighten dark times in the EV industry
The F-150 Lightning was intended to be a big win for Ford's EV pursuits, as the company would tap into America's love of pickup trucks and leverage its very successful F-150 brand.
At first, it seemed to work. Interest in the truck was high when it first launched, and the Lightning has become the best-selling EV pickup truck in the U.S. But electric vehicles are costly to develop and produce, and -- just like traditional vehicles -- companies need to sell them in mass volumes for them to be worth making. Instead, Ford sold just 1,500 of its Lightning trucks in October.
One of the most significant problems for Ford's electric truck and the rest of the U.S. EV industry is that federal tax credits -- which were worth up to $7,500 off a new purchase -- disappeared at the end of September. That was several years earlier than originally scheduled, because the Trump administration decided to end their funding early.
Ford lost $1.4 billion from its Model-e electric vehicle segment in the third quarter, on an earnings before interest and taxes basis (EBIT). With EV tax credits entirely gone now, it will be harder than ever for Ford to turn a profit from EV sales.
Ford probably isn't shifting its EV strategy just yet
Ford announced in September that its future electric vehicle model will be built on a new platform, called the Universal EV Platform. Farley said automakers have made too many attempts at EVs that have ended in layoffs and uncertainty. So the goal, as Farley stated, is to create a "strong, sustainable and profitable business" for its EVs.
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Key Data Points
The first model built on the platform is a yet-to-be-named mid-sized pickup truck that is expected to cost approximately $30,000, with deliveries scheduled to begin in 2027. It's notable that this price tag is considerably lower than the F-150 Lightning's starting price of around $55,000.
Most importantly, the new platform will enable Ford to implement manufacturing cost efficiencies by reducing parts by 20% compared to a typical vehicle and reducing assembly times by 15%.
With slow F-150 Lightning sales and mounting losses, Ford is likely launching the new platform because its current strategy isn't working. In short, Ford potentially axing the Lightning isn't a strategy shift as much as an admission that trying to sell expensive EV pickup trucks isn't a good strategy for the automaker.
But if the Lightning goes away, it's still not a good sign
Ford has yet to succeed with its EV plans. The company's not alone in this. Some automakers have completely abandoned their previous EV goals and scrapped models. But if the Lightning goes away, it'll mean Ford is essentially starting from scratch with its electric vehicle goals.
What concerns me about Ford's plans is that there appears to be a softening of demand for EVs in America right now. J.D. Power reported that EVs made up just over 5% of new vehicle sales in the U.S. in October, down from 8.5% about a year ago.
Ford will invest billions of dollars in its new platform amid slowing demand and the absence of federal EV tax credits. It's also starting from scratch with an unknown platform. All this means that while Ford may be shifting to lower-priced electric vehicles, its EV strategy remains a gamble.
