Ford can’t make EVs fast enough … and might not want to


Ford Motor Co., for years a bit of a laggard in the race to electric vehicles, has taken a counterintuitive approach to EV sales: pumping the brakes.

A few days ago, Ford stopped taking reservations for its F-150 Lightning pickup, an all-electric rig due out this spring. Some 200,000 electric trucks are spoken for from a factory planning to stamp out just 80,000 machines a year. Likewise, Ford has closed the order book on the hybrid version of its new Maverick, a small pickup that gets 42 miles per gallon.

Meanwhile, on Friday, Ford CEO Jim Farley took to Twitter to say his charge would triple production capacity for its other runaway EV, the Mustang Mach-E. The company plans to be making 200,000 of the battery-powered ponies a year by 2023.

It’s hard to produce Mustang Mach-Es fast enough to meet the incredible demand, but we are sure going to try. So starting in 2022 we are increasing production and expect to reach 200,000+ units per year for North America & Europe by 2023. That's 3x our 2021 output.
— Jim Farley (@jimfarley98) December 10, 2021

Ford has finally delivered a couple of Tesla fighters and now finds itself with Tesla problems. For years, Elon Musk has said the only constraint on his business was how fast he could make cars; not how fast he could sell them. And yes, 200,000 ponies a year sounds like a lot, but Ford manages to make as many of its bestselling pickup in about three months.

In truth, calibrating vehicle production has to be one of the toughest jobs in business. To ramp up, a company like Ford not only has to figure out where it can tack on assembly lines, but it has to find more workers and widen its supply chain of parts and pieces, including precious things like computer chips and 1,000-plus pound batteries.

All of those hurdles take months, which may as well be years in the current EV market. By the time Ford celebrates 12 months of Lightning sales, the initial wave of demand may well be crashing a bit, particularly as a crowd of rival rigs hit the streets. And who knows what the state of the economy will be.

Meanwhile, it’s a bit of a zero-sum game. To build more electric Mustangs, Ford is taking over a plant in Cuautitlán, Mexico, where it had been planning to build electric versions of its Explorer and Lincoln Aviator SUVs. Those machines are now delayed by 18 months as Ford shuffles production around like soldiers in a game of Risk.

Ford’s Lightning numbers will swell when it finishes a new assembly plant in Tennessee, part of an $11.4 billion complex that includes three battery factories. “Don’t bet against Ford when we have to increase capacity,” Farley said recently on CNBC. “This is what we do.”

The equation, however, is a little more complex than Farley lets on — and certainly more nuanced than Mr. Musk’s situation — because Ford has plenty of other products to stuff into its dealerships. Don’t want to wait for a Mustang that travels from New York to Boston on solar power? How about a Bronco that burns a gallon of gas every 20 miles? The Bronco, of course, is probably more profitable for the carmaker. And a $40,000 F-150 that burns gas will add more to the 2022 bottom line than one at the same price that runs on electrons.

Bloomberg Intelligence analyst Kevin Tynan says companies like Ford won’t fully smash the pedal on EV production until the economics improve. “If Ford could sell one million Lightnings a year, they wouldn’t,” he explains. “The reason why EV penetration is as low as it is in the U.S., is because that’s what automakers want it to be. People think it’s the consumer pulling — it’s not. It’s the automaker’s pushing.”

Ford may have widely underestimated demand for its first EVs, or it may just be taking a conservative path to kicking its gas habit — or both. Either way, good luck getting an e-truck with a Blue Oval on the front; it’s the toughest reservation in Detroit.