Ford commits $11.4bn to new electric battery plants
16:00, 28 September 2021
Ford Motor is investing $11.4bn (£8.4bn) in two new vertically integrated battery plants and electric vehicle production sites in Tennessee and Kentucky, the company announced in a press release Tuesday.
The investment is part of the US automaker’s previous commitment to invest $30bn in electric vehicles through 2025. Ford’s stock is up over 1.5% following the announcement to a price of around $14.3 a share.
Ford formed a partnership with South Korea-based battery supplier SK Innovation to develop the $5.6bn campus in Stanton, Tennessee named Blue Oval City, where Ford will manufacture an expanded lineup of electric F-Series trucks. SK Innovation is also the partner on the $5.8bn central Kentucky plant dubbed BlueOvalSK Battery Park, where the company's dual plants will assemble batteries that will power electric Ford and Lincoln vehicles.
“This is our moment – our biggest investment ever – to help build a better future for America,” said Jim Farley, Ford president and CEO. “It’s about creating good jobs that support American families, an ultra-efficient, carbon-neutral manufacturing system, and a growing business that delivers value for communities, dealers and shareholders.”
EV Commitments
In February, Ford announced a $22bn investment in electric vehicle production through 2025, $7bn of which had already been spent. By May, the company increased that commitment to $30bn.
Ford expects 40% to 50% of its global vehicle volumes to be fully electric by 2030. Earlier this year, the company released the Mustang Mach-E and revealed its F-150 Lightning all-electric pickup truck. It also expects E-Transit commercial vans to be on the roads by the end of the year.
Farley estimates that Ford will need 140GWh of battery manufacturing capacity a year to power its new line of electric vehicles. The three new battery plants will enable 129 gigawatt-hours (GWh) a year of production capacity.
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Competition from other manufacturers
The investment is the latest attempt by Ford to catch up to other manufacturers in the electric vehicle space.
Ford intends to produce more than one million electric vehicles a year in the second half of this decade. Leading US electric car manufacturer Tesla is already on pace to sell about 800,000 electric cars this year.
Likewise, General Motors is spending $27bn on electrification over the next five years to be carbon neutral by 2040 and convert all its sales of light-duty vehicles to zero carbon emission propulsion systems by 2035.
Read more: Wall Street’s engine revs after Ford’s Q2 earnings announced
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