Ford building $16.4 billion electric truck, battery plants

Wednesday, 29 September 2021

Ford Motor Co. and South Korea's SK Innovation Co. plan to spend $11.4 billion (NZ$16.4 billion) to construct three battery factories and an assembly plant for electric F-Series pickup trucks in the USA, the biggest investment in the automaker's history.

The project will create two vast sites to produce electric vehicles and the batteries to power them, employing nearly 11,000 workers, the companies said Monday. Ford is spending US$7 billion (NZ$10.1 billion), while battery partner SK is kicking in US$4.4 billion (NZ$6.3 billion). They begin to come online in 2025.

The projects are part of Ford's plan to invest US$30 billion (NZ$43 billion) in electric vehicles by 2025, become a player in a market dominated by Tesla Inc. and challenge General Motors Co.'s image as leading the legacy automakers. Since becoming Ford's boss a year ago, Chief Executive Officer Jim Farley has accelerated efforts to make the switch to an all-electric future, earning a plug from President Joe Biden on the electric F-150 and striking a battery joint venture with SK.

The Tennessee site to be known as Blue Oval City will occupy six square miles, making it three times the size of the historic Rouge Complex Henry Ford built in Michigan a century ago.

It will include a battery plant employing about 2,500 workers and an assembly plant with 3,300 employees that will produce an electric version of Ford's larger F-Series pickup, its most profitable product.

The Mustang Mach-E has been wildly successful for Ford, outselling the pony car that shares its name.

* Electric vehicles to make up 40 per cent of Ford's global sales by 2030

* Ford CEO: Electric vehicle demand will transform industry

Watch Ford reveal the all-new, all-electric F-150 Lighting.

* Ford plans to develop and produce electric vehicle batteries

In Kentucky, where Ford already has truck and SUV factories, the automaker and SK will construct two battery plants employing about 5,000 workers. The three battery factories will have the capacity to churn out power sources for more than 1 million electric vehicles a year, Ford said.

Ford has already double production of the all-electric Ford F-150 Lightning.

The big investment follows Ford's move this month to double production at the Michigan factory building the electric F-150 Lightning pickup going on sale next year.

The company says it already has 150,000 reservations for the plug-in pickup. Its battery powered Mustang Mach-E also has begun outselling its petrol-fuelled pony car namesake.

'The early results would say there is huge demand for electrified vehicles,' Kumar Galhotra, Ford's president of the Americas and international markets, said in an interview. 'The level of this investment demonstrates how confident we are.'

The Stanton, Tennessee, F-Series factory will be the first all-new assembly plant Ford has built since 1969, the company said.

'This is a transformative moment where Ford will lead America's transition to electric vehicles,' Ford Executive Chairman Bill Ford, the great-grandson of Henry Ford, said in a statement.

Since Farley announced plans in May to boost Ford's EV spending by one third, the company has grown more optimistic about how quickly the market will develop for battery powered vehicles.

'We're building in more upside based on our experience with the Mach-E and the F-150 Lightning,' Lisa Drake, Ford's chief operating officer in North America, said in a briefing with reporters Monday.

When Ford first announced the SK partnership in May, the plan was to build two U.S. battery plants, but that has now increased to three. Those plants, along with a battery plant in Georgia that will supply the F-150 Lightning, give Ford 141 gigawatt hours of battery supply, Galhotra said. That meets Ford's target for demand in North America for now, which is for 40 per cent of its sales to be electric by 2030.

'We're in the early stages,' Galhotra said. 'We'll see how this develops. We might need more.'