How many of the new F-150 Lightning trucks have you seen on the road? Frankly, I’ve seen more Rivian in the wild, and they’re not selling well.
So, it’s not a surprise that late Monday, Ford (F) announced that they are cutting production of the F-150 Lightning pick-up truck in 2024.
It wasn’t a small cut. Oh no, Ford is now planning on making half of their originally planned production of electric trucks in 2024. I think it’s a little more complex than demand for the electric truck.
Let's dig a little deeper...
Repeat after me: anything that you have to sign a loan document to buy will see lower demand in 2024.
It’s a simple way to find the stocks that you want to stay away from in 2024. That’s because higher interest rates, stubborn inflation, and less cash in consumers' pockets will decrease demand for things that you and I must take a loan out to purchase... Cars, boats, houses, furniture, vacations.
You get the idea.
Let’s bring it back to Ford and the F-150 Lightning. A year ago, you could do a standard financing deal on this vehicle and pay around $800 a month to have it in your driveway. Today, with rates at their highest in decades, the same vehicle costs an additional $224 a month.
On top of that, dare I say that Ford may be in the wrong market with the F-150 Lightning?
Sure, there are plenty of these trucks in the parking lot of the soccer fields and office parks, but at its heart, the F-150 is a working truck, not an electric toy.
Here’s Why It Matters: EV demand is still growing, but at a much slower speed than expected, as the economy and high interest rates curb appetite. Expect this to continue through 2024.
My Bottom Line: I’m currently short EV producers like Rivian (RIVN) and Nio (NIO). While Ford and General Motors (GM) are cutting production, they’ve still got a backstop with their I.C.E. products. Remember what I said about demand for things you need a loan for in 2024. I’m staying on the sidelines when it comes to Ford, GM, and Tesla (TSLA).
About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.