Ford Motor Co. (NYSE: F) just threw a wrench into the machinery of automotive stocks, when it comes to EV manufacturing. 

Anytime you’re driving around, noticing the cars on the road, it’s easy to make two observations about EV adoption.

First, it’s growing. There are more EVs on U.S. roads, especially those made by EV leader Tesla Inc. (NASDAQ: TSLA).  

Second, you’ve undoubtedly also noticed that cars with traditional internal combustion engines, or hybrids such as the Toyota Motor Corp.’s (NYSE: TM) Prius. 

Despite ambitious EV adoption targets from the Federal government and some states, and auto makers’ relatively fast ramp-up of EV production, consumers haven’t warmed up to the new technology as fast as policymakers may have expected.

Slashing EV pickup truck production targets

That’s where Ford’s announcement comes in. 

In an internal memo obtained by auto industry trade publication Automotive News, Ford said it would halve 2024 production targets for the all-electric F-150 Lightning pickup truck. 

Revised production plans call for the company to make 1,600 F-150 Lightning trucks each week at its Dearborn, Michigan Rogue Electric Vehicle Center. That’s exactly half the number of vehicles the company previously planned to manufacture each week.

In the memo, Ford cited "changing market demand" as the rationale for the cuts.

After that news broke, a Ford spokeswoman told CNBC “We’ll continue to match production with customer demand."

Consumers balk at EV prices, reliability

Ford’s plan to shift into reverse on EV production comes as consumers balked at high EV prices, and also harbored doubts about charging-station availability and reliability. In particular, consumers are wary of taking long road trips in an EV if they’re not sure a charging station will be ready and working when needed. 900p-

It wasn’t so long ago that Ford said it would boost production to “meet strong consumer demand.” In addition to the F-150 Lightning truck, Ford also put resources into its E-Transit van and Mustang Mach-E, designed to compete with Tesla’s Model Y. 

It’s true that EV sales in the U.S. are growing. According to research from auto industry marketing firm Cox Automotive, EV sales in the U.S. surpassed 300,000 in the third quarter. Cox added that the EV market is on track surpass 1 million for the first time in 2023, with that milestone likely achieved in November. 

Electric vehicle sales accounted for 7.9% of total industry sales in the third quarter, Cox reported. That’s a record and is up from 6.1% a year ago and 7.2% in the second quarter.

“Higher inventory levels, more product availability and downward pricing pressure have helped spur continued linear growth of EV sales in the U.S. market. EV sales have now increased for 13 straight quarters,” Cox said.

EV transaction prices lower in Q3

However, price cuts contributed to the growth. 

EV transaction prices in the third were down significantly from the year-earlier quarter.

To boost sales volume Tesla slashed prices, which are now down roughly 25% year over year, according to Cox

“The price cuts have helped, as Tesla’s Q3 sales grew by 19.5% year over year, surpassing the industry’s overall growth rate of 16.3%,” said the report. 

Ford cut the prices of its F-150 Lightning by $6,000 to $10,000 in July. The company said lower battery costs and improved capacity were behind the move, but it’s unlikely prices would have dropped if Ford saw the trucks rolling off dealer lots at a fast clip. 

Rival EV truck makers could dent Tesla

Tesla’s market share is dropping, as rivals roll out their own EV offerings. 

However, the newly released Cybertruck may help its share tick higher, but in addition to Ford, trucks from Rivian Automotive Inc. (NASDAQ: RIVN) and General Motors Co.’s (NYSE: GM) may cut into Tesla’s share. 

With the Federal Reserve’s signal that as many as three rate cuts could occur in 2024, the automakers' industry group was up 1.70% on December 13 and up nearly 6% on December 14.

That’s a better performance than the Consumer Discretionary Select Sector SPDR Fund (NYSEARCA: XLY), which also notched strong gains. However, automakers, with extensive financing operations, are uniquely dependent on changes in interest rates, compared to other consumer discretionary companies.