The chief executive officer of electric truck maker Rivian said the top hurdle to his ability to scale manufacturing is the availability of batteries. Simon Moores, Benchmark’s chief executive, told The Wall Street Journal that “It varies by region, but it’s important for people to understand that capacity isn’t a quality, reliable battery supply.” The existing supply is not enough to handle rising production at Rivian and its larger competitors, many of which are global manufacturers. As car companies ramp electric vehicle (EV) production, the supply trouble could get much worse.
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A recent New York Times article about Ford CEO Jim Farley pointed out that the success of Ford’s most important new vehicle, the Ford F-150 Lightning, will rely on its supply chains. William C. Ford Jr., the company’s executive board chair and Farley’s boss, commented, “If this launch doesn’t go well, we can tarnish the entire franchise.” One of the challenges is that the car industry does not have a large enough army of experts in auto software. Even if Ford can assemble a first-rate software team, it may be unable to produce enough Lightning trucks for the tens if not hundreds of thousands of units that could be needed to satisfy customer demand.
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Shortages are not new to the car industry. In the past two years, the primary problem has been microchips. That problem has not gone away, which is another hurdle Ford faces. The F-series has been the bestselling vehicle in the United States for four decades. This means Ford has a rich supply of possible buyers. Taken together, there have to be millions of F-Series pickups on the road, which is a universe that cannot be matched by another manufacturer.
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Nothing kills a car launch more than a problem supplying products to match demand. People become impatient. This not only causes a backlash for the company. It also means many potential buyers turn to alternative vehicles.
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Ford, one of the largest gasoline-powered car companies for more than a century, has its future riding on batteries.
Will Ford Have Enough Batteries to Build the Ford F-150 Lightning?
© Ford Motor Co.
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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