Ford Makes a Major EV Announcement

The Dearborn, Mich., automaker will resume manufacturing the F-150 Lightning, its electric pickup truck, a month after one unit caught fire.

This is news that Ford needed. 

It'll reassure the markets and the company's fans that its ambition to compete with Tesla is realistic after a tough start to the year.

Ford kicked off 2023 showering investors with disappointing results: The company posted a net loss of $2 billion, a showing that didn't sit well with Chief Executive Jim Farley.

"We should have done much better last year,” Farley said in the earnings statement on Feb. 2. "We left about $2 billion in profits on the table that were within our control, and we’re going to correct that with improved execution and performance.”

The firm fell short of expected sales by 100,000 units, equating to about $1 billion in missed earnings. 

"Our performance in 2022 was below our expectations, and our industrial platform is frankly not where we need it to be," Chief Financial Officer John Lawler told analysts during the 2022 fourth-quarter-earnings call.

"By better executing the things we control, we should have generated as much as $2 billion more in adjusted [earnings before interest and taxes]," he continued.

For example, "the instability of 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 an F-150 Lightning Due to Battery Pack

It was a bad look for a company that wants to assert itself as America's No. 2 electric-vehicle producer, behind the indisputable leader, Tesla.  (TSLA) - Get Free Report

And if that report wasn't enough, two days later Ford decided to suspend production of the F-150 Lightning, the electric version of the iconic F-150 pickup truck, after one of them caught fire.

Ford  (F) - Get Free Report did not provide details about the incident but made clear there was a problem with the vehicle's battery pack

"As part of our pre-delivery quality inspections, a vehicle displayed a potential battery issue and we are holding vehicles while we investigate," the company said on Feb. 15. "We are suspending production at the Rouge Electric Vehicle Center through at least the end of next week."

It explained that during a standard Lightning pre-delivery quality inspection, one vehicle displayed a battery issue.

"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 expect to conclude our investigation and apply what we learn to the truck’s battery production process; this could take a few weeks. We will continue holding already-produced vehicles while we work through engineering and process updates."

These setbacks were a big blow for Ford because the F-150 Lightning pickup truck is one of the few advantages that the brand with the blue oval has over Tesla. Elon Musk's group is not currently present in the electric pickup truck segment; its first model in this profitable space is expected later this year. That's the Cybertruck, a vehicle with a unique futuristic design.

F-150 Lightning Production Resumes on March 13

To worried investors, Ford has just sent some good news. The group will resume production of the Lightning on March 13.

"We will restart 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 truck is manufactured.  

This will allow time for its battery supplier, SK On, to build up production and deliver battery packs to the Lightning production line in Michigan. 

"In the weeks ahead, we will continue to apply our learnings and work with SK On’s team to ensure we continue delivering high-quality battery packs – down to the battery cells," the spokesperson continued, adding that as production ramps up,  Ford  "will continue holding already-produced vehicles while we work through engineering and parts updates."

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. When Ford will be able to fill the orders and meet this demand is difficult to estimate. 

The company, which also produces the electric sport utility vehicle Mustang Mach-E and the 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 all, Ford has delivered 19,217 F-150 Lightning vehicles to its customers. 

This vehicle, the first pickup truck aimed at a mass market due to its price, is being watched closely in the industry to see if EV adoption beyond affluent consumers is possible.

The production of the F-150 Lightning started last year. The vehicle is being manufactured in small numbers, between 2,000 and 2,400 units per month.