Ford invests $11.4bn to add electric F-150 plant, three battery factories
Image credit: Ford Motor Co. | Reuters
The Ford Motor Company and its Korean battery partner SK Innovation has announced an investment of $11.4bn to build an electric F-150 assembly plant and three battery plants in the US, accelerating the automaker's push into electric vehicles.
The two companies intend to create nearly 11,000 jobs by opening assembly and battery plants in Stanton, Tennessee, and two additional battery factories in Glendale, Kentucky, as part of Ford's previously announced plan to spend more than $30bn between now and 2030 on electrification. Plants on both sites are slated to open in 2025.
Following the announcement - which represents the single-largest manufacturing investment in the company's 118-year history - Ford said that it expects to have 40 to 50 per cent of its global vehicle volume to be all-electric by 2030, up from its previous forecast of 40 per cent.
The Tennessee assembly and battery complex will be approximately three times the size of Ford's sprawling, century-old Rouge manufacturing complex in Dearborn, Michigan, said Lisa Drake, chief operating officer, Ford North American, speaking to Reuters. She emphasised that there will be further room to expand on that site.
"For us, this is a very transformative point where we are putting our capital in place now in a very big way to lead the transition to EVs," Drake said.
Ford's portion of the investment is $7bn, with SK covering the rest. The companies will invest $5.8bn in Kentucky and $5.6bn in Tennessee. The South Korean battery maker, which supplies electric car batteries to Ford Motor and Hyundai Motor Co, among others, has battery production sites in the US, Hungary, China and South Korea.
With its three additional battery factories and two battery plants in Georgia, SK Innovation is set to secure an annual capacity of about 150GWh of batteries in the US. SK Innovation said it expects to exceed the goal of securing an annual global production capacity of 200GWh of batteries by 2025. Its current capacity stands at 40GWh.
Ford has moved more aggressively to roll out its EV strategy under Jim Farley, who took over as chief executive last October. Earlier this month, Ford doubled planned production capacity in Dearborn, Michigan, for the F-150 Lightning pickup truck to 80,000 annually due to strong pre-launch demand for the electric pickup, which is scheduled to launch in spring 2022.
Ford and other automakers are pushing hard to prepare for the rollout of EVs as countries and regions such as China and Europe seek greater reduction of vehicle emissions.
The planned lithium-ion battery plants build on a memorandum of understanding announced by Ford and SK in May. The battery plants will be jointly owned with SK and have a combined annual capacity of 129GWh of batteries, which could power about 2.2 million EVs when fully operational - more than double the level outlined in May, Drake said.
Ford previously said its global EV plan calls for at least 240GWh of battery cell capacity by 2030, equal to about 10 plants that will be placed in North America, Europe and China. SK has said it aims to ramp up annual global battery capacity to more than 200GWh in 2025.
As part of the announcement, Ford will also build a 3,600-acre "mega campus" in west Tennessee called 'Blue Oval City' that will employ 5,800 people and include the assembly plant, lithium-ion battery production and a supplier park, Drake said. 'Blue Oval' plays off Ford's name for its corporate logo.
The new Tennessee assembly plant will build the next generation of the Lightning, using a dedicated EV platform, following its launch next year, Drake said. The initial Lightning model will be built on a platform heavily derived from the gasoline-powered F-150. Drake did not disclose the planned production capacity for the Tennessee truck plant. The site will also include zero-waste-to-landfill processes to capture materials and scrap.
In central Kentucky, Ford will build 'BlueOvalSK Battery Park', employing 5,000 people. The site will consist of twin plants building lithium-ion batteries for Ford and Lincoln electric vehicles, starting in 2025. The second factory will open the following year.
The two companies will receive $500m in incentives from Tennessee and almost $300m, as well as more than 1,500 acres of land, from Kentucky.
This week's news builds on another recent Ford deal, to partner with Redwood Materials to form a circular supply chain for EV batteries, from raw materials to recycling. Redwood will be located at Ford's Tennessee site.
Ford said it will separately spend $525m over the next five years to fund job training and career readiness initiatives for US auto technicians to help prepare for the shift to EVs. That program begins in Texas, where Ford will spend an estimated $90m.
Ford's doubling down on EVs and batteries comes at a pivotal time for the auto industry, with both political and consumer demand coalescing around climate concerns. Most major manufacturers are in the process of repositioning their fossil fuel-driven businesses towards an electric future, with the attendant considerable investment in battery technology.
However, leading German automakers BMW and Audi have also both recently signalled significant interest in developing hydrogen fuel-cell cars, with BMW demonstrating a prototype SUV earlier this month, as a way of hedging their manufacturing bets alongside battery-powered cars. Germany is already a leading proponent of using hydrogen as a green energy source. Japan's Toyota is also a long-time advocate for hybrids and fuel-cell vehicles.
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