As Ford curtails production of its all-electric Lightning pickup, the political class is still unwilling to face the reality of low demand for EVs.
A few months ago, I wrote about how Ford had lowered short-term production targets for electric vehicles (EVs).
Now, there’s this (via CNBC, my emphasis added):
Ford will cut planned production of its all-electric F-150 Lightning pickup roughly in half next year, marking a major reversal after the automaker significantly increased plant capacity for the electric vehicle in 2023.
The new production plans call for average volume of around 1,600 F-150 Lightnings a week at Ford’s Rouge Electric Vehicle Center in Dearborn, Michigan, starting in January, according to a source familiar with the decision. The automaker most recently planned to produce roughly 3,200 of the vehicles on average per week.
“We’ll continue to match production with customer demand,” a Ford spokeswoman said Monday.
Ford executives have recently said the automaker will match production to demand, as the company cancels or postpones $12 billion in upcoming EV investments.
The production cuts for the F-150 Lightning were first detailed in a planning memo to suppliers obtained by Automotive News. The memo cited “changing market demand” for the cuts, according to the publication.
EV demand has been slower than many expected, as prices and interest rates remain high. Automakers are working to cut costs of producing all-electric vehicles, while rethinking production and product plans for the years ahead.
According to CNBC, EV “demand has been slower than many expected, as prices and interest rates remain high.” Higher prices and interest rates have remained higher than expected, but I suspect that they are only part of the problem. Car buyers are clearly becoming increasingly aware that EVs (and the infrastructure needed to support them) are not yet ready for prime time. That may not matter too much when EVs are being bought as a second or third car (as has been the case with many EV purchases), but it will weigh much more heavily as manufacturers attempt to widen demand for EVs away from relatively wealthy early adopters.
Ford wants “to match production with consumer demand,” which is what a business should do. But what will the company do when confronted with regulations effectively stipulating that they must sell a certain percentage of EVs in a given year?
Meanwhile, writing in the Spectator, Matthew Lynn reports on the situation in the U.K.:
According to figures from the Society of Motor Manufacturers and Traders released yesterday, sales of EVs slumped by 17 per cent in November, the largest ever monthly fall. After taking a larger and larger share of the market for the last few years, sales now appears to have gone into reverse. Indeed the Office for Budgetary Responsibility had forecast that EVs would account for 67 per cent of the market by 2027 but it has halved that, predicting just 38 per cent by that year. . . .
[This] is not just a British phenomenon. In Germany, EV sales dropped by 35 per cent in September after tax breaks were phased out.
The simple truth is this. Without generous tax breaks, and bans on any of the alternatives, the EV is at best a niche product. They are fine as second cars for the suburbs, so long as you have a charger at home, and you have an alternative for long trips. And they may work for some city dwellers who only need a car very occasionally. Everyone else, which is most people, is deciding they will see what other alternatives become available. We may soon have hydrogen fuelled cars, or vehicles that run on ‘green petrol’, or, of course, a whole new generation of far superior EV’s capable of running for hundreds of miles on a quick charge. Until then, the market had decided that the EV is not the answer. It is just a question of when the political class catches up with that reality.
My guess is that the political class will not be willing to face that reality until the point at which the voting class starts to push back against EV mandates. But what will that mean for the manufacturers that have poured billions into EV production in response to government “encouragement”?