The Dearborn, Michigan-based automaker will resume production of its electric pickup truck, the F-150 Lightning, a month after one unit caught fire.
This is the news that Ford needed.
It will reassure the markets and the company’s fans that its ambition to compete with Tesla is realistic after a rocky start to the year.
Ford kicked off 2023 showering investors with disappointing results: The company posted a $2 billion net loss, a showing that didn’t sit well with Chief Executive Jim Farley.
“We should have done a lot better last year,” Farley said in the Feb. 2 earnings report. “We left about $2 billion in profit on the table that was in our control, and we’re going to correct that with improved execution and performance.”
The company missed expected sales by 100,000 units, which equates to about $1 billion in lost profit.
“Our performance in 2022 was below our expectations, and our industrial platform, quite frankly, is not where we need it to be,” Chief Financial Officer John Lawler told analysts during the fourth-quarter 2022 earnings call.
“By better executing the things we control, we should have generated as much as $2 billion more in adjusted earnings (earnings before interest and taxes),” he continued.
For example, “instability in our supply chain and production plans caused us to not only deliver lower-than-planned volumes in the fourth quarter, but also incur higher costs through premium freight and other supplier charges.”
Ford: Fire in F-150 Lightning Due to Battery
It was a bad image for a company that wants to establish itself as the second largest producer of electric vehicles in the United States, behind the undisputed leader, Tesla. (TSLA) – Get a free report
And if that report wasn’t enough, two days later Ford decided to halt production of the F-150 Lightning, the electric version of the iconic F-150 pickup, after one caught fire.
Ford (F) – Get a free reportHe did not provide details about the incident, but made it clear that there was a problem with the vehicle’s battery.
“As part of our pre-delivery quality inspections, one vehicle showed a potential battery problem and we are holding the vehicles while we investigate,” the company said on February 15. end of next week.”
He explained that during a standard quality inspection prior to Lightning’s delivery, one vehicle showed a problem with the battery.
“We believe we have identified the root cause of this issue,” a spokesperson told TheStreet at the time. “By the end of next week, we hope to wrap up our research and apply what we learn to the truck battery production process – this could take a few weeks. We will continue to hold vehicles already produced while we work on engineering and process updates.”
These setbacks were a blow to Ford because the F-150 Lightning pickup is one of the few advantages the blue oval brand has over Tesla. Elon Musk’s group is currently not present in the electric van segment; its first model in this profitable space is expected later this year. This is the Cybertruck, a vehicle with a unique futuristic design.
Production of the F-150 Lightning resumes on March 13
For concerned investors, Ford has just delivered some good news. The group will resume production of the Lightning on March 13.
“We will resume production at the Rouge Electric Vehicle Center on March 13,” a spokesperson said in an emailed statement, referring to the Michigan plant where the pickup is built.
This will give its battery supplier, SK On, time to ramp up production and deliver battery packs to Lightning’s production line in Michigan.
“In the coming weeks, we will continue to apply our learnings and work with the SK On team to ensure we continue to deliver high-quality battery packs, right down to the battery cells,” the spokesperson continued, adding that as the production, Ford “will continue to maintain the vehicles already produced while we work on engineering and parts upgrades.”
SK On had resumed building battery cells at a factory in Georgia, Ford said last week.
In all, the F-150 Lightning, which had more than 200,000 reservations before last month’s incident, lost a month of production. It is difficult to estimate when Ford will be able to fill orders and meet this demand.
The company, which also makes the Mustang Mach-E electric sport utility vehicle and E-Transit, said on March 2 that it sold just 1,336 units last month, bringing the total to 3,600 vehicles this year.
In total, Ford has delivered 19,217 F-150 Lightning vehicles to customers.
The first mass-market pickup truck due to its price point, this vehicle is being closely watched in the industry to see if EV adoption beyond wealthy consumers is possible.
Production of the F-150 Lightning began last year. The vehicle is manufactured in small quantities, between 2,000 and 2,400 units per month.
