THE MORNING RANT: Layoffs and Production Shutdowns as (Non-Tesla) EV Sales Miss Targets

The “EV transition” has stalled out, and except for Tesla, electric vehicle manufacturers are seeing their growth stall. In some cases sales are collapsing.

Ford is shaping up as a big loser in their electric pickup truck endeavor.

“Sales of the F-150 lightning electric pickup were off about 46% during third quarter due to slower-than-expected demand and downtime at the plant” [CNBC – 10/04/2023]

Ford sold 6,464 F150 Lightning EVs in Q3 2022, but sales in Q3 2023 fell to just 3,503 which annualizes to only 42,000 per year. Ford executives think pretend they’re going to sell hundreds of thousands of EV pickups per year, but demand has already imploded. Even worse, a great many of the recent Lightning sales are to governmental fleets. Consumers have rejected this product.

As for “downtime at the plant” affecting sales of the F150 Lighting EV, an ideal supply of vehicles on dealer lots is 60 days’ worth, Ford dealers are currently choking on a 97-day supply of Lightnings nationwide with 3,632 for sale. “Downtime” is not retarding sales.

Meanwhile, Ford has suddenly canceled all further deliveries to dealers of 2023 model year F150 Lightnings that are not already pre-sold.

“Ford cancels dealer stock orders of 2023 F-150 Lightning to do quality checks” [Detroit Free Press – 10/02/2023]

Dealer stock orders for the 2023 Ford F-150 Lightning were canceled in the U.S. in recent days, the Detroit Free Press has learned.

Ford confirmed Monday that the all-electric pickups are undergoing "additional quality checks" at the Rouge Electric Vehicle Center.

“Additional quality checks”? Is something wrong with them?

The issue is not safety-related, Gunsberg said.

No, the issue is the growing glut of 2023 model year F150 Lightnings.

Ford is now working to match its 2023 supply with demand as the company prepares to change over to 2024 Lightning production later this year, said Ford spokesman Marty Gunsberg.

Let me translate. What would have been year-model 2023 electric pickups are now going to be year-model 2024 electric pickups (after their “additional quality checks”) so as to ensure that there is not a glut of unsold prior-year model Lightnings in 2024. Don’t misunderstand, there will still be a glut of these unwanted pickups, but at least the dealers will be sitting on a glut of year-model 2024 Lightnings.

By the way, it’s not just Ford suffering from poor EV sales. Pretty much any company not named Tesla is seeing demand that is much less than they anticipated. (“Volkswagen cites slow demand amid EV production cuts at German plants” [Electrek – 9/26/2023])

With demand for EVs collapsing, there is also decreasing demand for the lithium-ion batteries that incinerate propel them.

Earlier this year Ford announced a new $3.5 billion investment in an EV battery venture in Marshall, Michigan. It is already backpedaling.

“Ford suddenly pauses massive EV battery project that Republicans are probing over CCP ties” [Fox Business – 9/25/2023]

The media tried to spin the story as being about those rascally Republicans hating on China, but it’s pretty easy to understand what is really going on. Ford is not going to spend any more money on this plant since the batteries that would be manufactured there aren’t going to be needed.

Ford said in a statement to FOX Business that work on the factory had been paused and spending would be limited, but declined to pinpoint the exact considerations that factored into the decision.

"We’re pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant," Ford spokesperson T.R. Reid told FOX Business. "We haven’t made any final decision about the planned investment there."

A South Korean EV battery plant in in Georgia is laying off employees due to softening demand. SK Battery manufactures EV batteries for Ford and Volkswagen.

“SK Battery ushered EV sector into Georgia. Now it is cutting some jobs” [Atlanta Journal Constitution – 9/27/2023]

SK Battery America in Jackson County, among the foundational manufacturers in Georgia’s electric vehicle ecosystem, is laying off workers after years of rapid expansion.

SK Battery declined to say Tuesday evening how many positions are involved, but the company has confirmed that a group of workers have been laid off in Commerce, about 70 miles northeast of downtown Atlanta, where the subsidiary of South Korea-based SK Innovation has two lithium-ion battery manufacturing facilities.

…layoffs were needed because SK Battery is “aligning production with current market demands.”

Speaking of SK Battery, it does not appear to be a very good corporate citizen in Georgia. It had a pattern of illegally dumping prohibited lithium-ion batteries at a nearby recycling center. Despite being previously caught and instructed not to do so again, SB kept dumping the explosive batteries at the recycle center. They will not be doing so anymore, because the recycle center burned down, with SK’s batteries found in the ashes of the fire. The local fire department took four days and 3 million gallons of water to extinguish the inferno.

SK is now being sued for $26 million in damages.

“Recycling center blames SK Battery for fire that destroyed business” [Fox 5 Atlanta – 8/10/2023]

The owner of a recycling center in Banks County blamed SK Battery for causing a tremendous fire last month that destroyed his business. Metro Site accepted industrial waste for recycling such as paper, plastic, and metals. It is not permitted to accept hazardous waste like lithium-ion batteries, the kind manufactured at SK’s sprawling Commerce plant three miles away.

When [Scott Ledford] arrived, he said the fire had spread from a section of material delivered by SK Battery, flames leaping high into the air, and creating a plume of thick black smoke.

According to a lawsuit Metro Site filed on July 30 against SK Battery, workers discovered two lithium-ion batteries near the start of the fire.

It wasn’t the first time.

According to the lawsuit, SK Battery America was caught "illegally dumping charged pouch cell LIBs" (lithium-ion batteries) six other times during previous deliveries of recycling materials.

SK Battery "assured Plaintiff that proactive, preventative measures would be put in place and there would be no further illegal dumping and delivery of charged pouch cell LIBs…"

And still speaking of SK…

Ford Motor Company has been making a lot of really bad long-range decisions when it comes to EVs, so it’s not surprising that Ford is teaming up with SK on its massive EV venture in Tennessee and Kentucky.

Ford, SK Invest $11.4 Billion in Electric Truck, Battery Plants [Bloomberg – 9/27/2021]

Ford Motor Co. and South Korea’s SK Innovation Co. plan to spend $11.4 billion to construct three battery factories and an assembly plant for electric F-Series pickup trucks in Tennessee and Kentucky, the biggest investment in the U.S. automaker’s history.

Construction on these plants is underway, with some hiring scheduled to start in 2024, and production to commence in 2025. Ford is planning to build 500,000 electric truck per year there.

With EV production already exceeding demand, and with Ford shutting down other EV battery plants, and with SK laying people off at its existing battery plants, there doesn’t appear to be any production needed at these vast new plants.

Republican Tennessee Governor Bill Lee (along with the GOP-controlled legislature) has committed $884 million taxpayer dollars – including a $500 million grant paid directly to Ford - to this project. In addition, the state is condemning land from rural farmers (who are mainly black) to build roads to this boondoggle, named Blue Oval City. (“Black farming community fights to get fair deal as state takes land for Ford plant roadways” - Tennessee Lookout – 4/03/2023)

Blue Oval City is shaping up to be a catastrophic financial debacle for Ford, which will need approximately 0% of the battery and vehicle production capacity that is being built. It should also be catastrophic for the Tennessee politicians who bought the EV hype and chose to waste so much taxpayer money on this ridiculous gamble.

I intend to write more about Blue Oval City as construction progresses and the EV situation worsens over the next two years. If any of you are involved with that project in any capacity, I’d be interested in hearing your stories.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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