Ford (NYSE: F) would be one of the global car industry’s EV kings. Two years ago, management said it would invest $11.4 billion in EV plants. This, in turn, would create over 11,000 jobs. Ford said it would end 2023 with EV production at a 600,000-a-year run rate in the US. That figure was supposed to reach 2 million by 2026. Then everything changed.
Ford pushed its 600,000 production target to the end of next year. Sales of its EV flagship F-150 Lightning were only in the thousands each quarter. As the EV version of the most popular vehicle in America based on sales for over four decades, it should have been a major winner. Some people keep their F-150s for years.
Ford has surrendered even more EV ground. A new battery plant was supposed to employ 2,500 people. That was scaled back to 1700. It was an acknowledgment that people do not want to buy EVs from Ford in any number. An internal apologist for Ford said, “We’re still very bullish on EVs. The growth isn’t at the rate that we and others had expected.” Ford, in a word, was wrong. Its billions of dollars in investments are at risk, with a slowing market for EVs and rising competition.
Ford did not explain why it could not do better in a market where Tesla (NASDAQ: TSLA) produces over 400,000 EVs worldwide per quarter. That means there is a market, but denting Tesla’s lead has been bloody and expensive work. Tesla has dropped prices to increase market share. Even with the cuts, it makes money, which Ford’s EV efforts are a money pit.
Ford misjudged what customers wanted. Its sales of hybrids have been strong. People will buy a car or truck with two engines as long as one is powered by gasoline. Many Americans shy away from EVs because of a lack of charging stations, range, and charging times. However, Tesla does have many chargers in some states.
Ford has not been able to articulate a strategy for getting back on track and grabbing a large part of the market, which it said would be remarkably rewarding at the end of the decade. The retreat, instead, continues.
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