It was just over a year ago when Ford (F) -) was celebrating "the Model T moment for the 21st Century."
The date was April 26, 2022, and the occasion was the launch of the all-new electric F-150 Lightning pickup, which the automaker called "a milestone moment in America’s shift to electric vehicles."
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The Model-T, which debuted in 1908, is generally regarded as the first mass-affordable automobile. And Ford had big plans for the F-150 and Rouge Electric Vehicle Center, the company's electric vehicle assembly plant in Dearborn, Mich.
But the market has shifted since that April day and now Ford will reportedly cut planned production of the F-150 Lightning pickup roughly in half next year.
The new production plans call for average volume of around 1,600 F-150 Lightning vehicles a week at the Rouge Electric Vehicle Center starting in January, CNBC reported on Dec. 11, citing a source familiar with the decision.
The company most recently planned to produce roughly 3,200 of the vehicles on average per week.
Ford cites 'changing market demand'
A company memo cited “changing market demand” for the cuts, according to Automotive News.
Ford did not immediately respond to a request for comment, but a spokeswoman for the automaker told CNBC that "we’ll continue to match production with customer demand."
Last month, the company said EV losses continued to deepen in the third quarter. Ford posted an operating loss of $1.3 billion, compared with $1.1 billion in the previous quarter and more than double the loss from the year-ago quarter.
For the entire year, Ford said it expected a full-year loss of $4.5 billion for its EV unit.
The company said the loss was attributable to "continued investment in next-generation EVs and challenging market dynamics."
Ford also said that many North American customers who were interested in buying EVs were "unwilling to pay premiums for them over gas or hybrid vehicles, sharply compressing EV prices and profitability."
The automaker also said that it was postponing around $12 billion in planned EV investments, including the construction of a new battery plant.
Electric-vehicle sector's troubles
The news about the F-150 signals another setback for Ford and the electric-vehicle sector.
General Motors (GM) -) dropped plans to develop a cheap EV with Honda (HMC) -), in addition to scrapping an earlier EV-production target of 400,000 vehicles by 2024.
GM also delayed the production of its coming EV line, which Chief Executive Mary Barra said would reduce costs and expand profitability.
Tesla (TSLA) -) , one of the largest EV makers in the world, also began to slash prices as demand slowed.
Enthusiasm in the automobile industry about electric vehicle production and deliveries had been growing over the past 10 years before a rise in inflation and interest rates in 2022 and 2023 contributed to a reduced demand for EVs.
"EVs are presently more expensive to produce than internal combustion engine vehicles, primarily due to the cost of batteries compared to the cost of an internal combustion engine vehicle's power/drivetrain," Tony Salerno, managing director of automotive advisory and analytics at J.D. Power, told Newsweek.
"As battery technology improves, that cost will decrease, and performance will improve," he added. "Consider the battery performance of the first iPhone in 2007 compared to today's iPhone."
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