Just a few years ago, Ford believed the success of its F-150 Lightning electric pickup truck was guaranteed. But in late September, Congress and President Donald Trump eliminated federal subsidies for purchasing electric vehicles, causing sales to plummet, especially for larger and more expensive models.
The future of pickup trucks is currently uncertain. Ford has halted production of the model, which starts at $55,000 and can exceed $85,000 for the most complete versions, and has not said when or if it will resume production.
The Lightning Crisis is part of a broader change. In recent years, many electric cars purchased in the United States have been luxury models such as the Tesla Model S, GMC Hummer, and Porsche Taycan, all of which cost more than $80,000. But this is changing.
While sales of luxury electric cars have stagnated, consumers are turning to more affordable models in the $35,000 range, such as the Chevrolet Equinox and Hyundai Ioniq 5.
“Once the subsidies ended, sales of the more expensive vehicles really started to slow down,” said Tim Hovick, owner of the Santan Ford dealership in Arizona, which used to sell dozens of Lightnings a month.
Like Ford, General Motors has discontinued production of the electric Hummer. The Michigan factory is scheduled to reopen in January, but with only one eight-hour shift instead of two. GM is also slowing production of its electric Cadillac.
“We won’t really see the real demand for electric vehicles until early next year,” GM CEO Mary Barra said on a conference call last month.
Tesla has drastically reduced production of its three premium models: Model S, Model X, and Cybertruck. Honda discontinued production of the Acura ZDX and Stellantis canceled its electric Ram pickup truck before it was released.
Younger manufacturer Rivian is also slowing production of luxury SUVs and pickup trucks, preparing cheaper models for next year. The company laid off about 600 employees and reported a loss of US$1.2 billion in the third quarter.
In Europe, automakers are also reconsidering their strategies due to the market slump and President Trump’s import tariffs.
Mercedes-Benz has suspended imports of its luxury electric models to the United States. Volkswagen has cut production of its German-made luxury electric van ID.Buzz.
Porsche, owned by Volkswagen, announced in September that it would halt development of several new electric vehicles and invest heavily in new gasoline models. This turnaround came at a high price, with the company posting an operating loss of almost 1 billion euros in the third quarter.
“We have seen a clear decline in demand for dedicated electric vehicles and we are taking this into account,” said Oliver Blume, CEO of Volkswagen and Porsche.
For most Western automakers, the decline in the electric vehicle market has a positive side. Most automakers except Tesla were losing money on these models, especially luxury cars. If sales decrease, losses will also decrease.
U.S. electric vehicle sales in October fell 33% from a year earlier to 64,500, according to J.D. Power. F-150 Lightning sales fell 12% to 1,543 units. Acura sold just 25 ZDX units, down from more than 1,200 units sold in the same period last year.
“Many thought the premium electrical sector was sustainable and would continue to grow,” said Jessica Caldwell, vice president of insights at Edmunds. “But there’s been a lot of change in the industry, and it’s not as big as we thought.”
The $7,500 tax credit was a relatively small discount on luxury cars, but it helped automakers put together attractive offers. But now the resale value of used streetcars has fallen, making monthly payments higher and demand even lower.
Ford dealer Hobic said about 75% of the EVs it sold were for rental. “Without a strong rental proposition, rental prices would have been too high,” he said.
His shop has about 75 Lightnings sitting in its yard, waiting for incentives offered by Ford. Other automakers have already extended their discounts, with Mercedes offering rebates of more than $10,000 on some models and up to $50,000 on the Maybach EQS, which starts at $180,000.
Decreasing demand for expensive electric models creates room for consumers who would never buy them even at deep discounts. Currently, about a dozen models cost less than $40,000, with recent versions of the Nissan Leaf and Chevrolet Bolt costing less than $30,000.
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