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Ford's crazy push for electrification

Publish Date: 2021.10.14

  When Ford Motor Company launched the F-150 Lightning in May, its CEO Jim Farley stated that it would be a measure of customer acceptance of electric vehicles.

  

  But Ford has no intention of waiting for this result. At the same time, the automaker is advancing its plans for the next generation of electric pickup trucks and three battery plants to power 1 million Ford and Lincoln electric vehicles each year.

  

  These plans were materialized last week in the form of a $11.4 billion investment, which will create 11,000 electric vehicle and battery manufacturing jobs in Tennessee and Kentucky.

  

  This is by far the most obvious sign that Farley wants Ford to become a major player in electric vehicles, if not the leader. Since taking over as CEO last year, he has nearly tripled Ford's expenditure on electrification and has established major partnerships in battery production and recycling.

  

  "We must be bold, we must be bigger, we must do it now," Ford Motor Executive Chairman Bill Ford said at an event, announcing the 3,600-acre complex called the Blue Oval City that is scheduled to open in 2025. Body (Blue Oval City). "This is no longer a hypothesis, it is true. The scale we announced is not only huge, but also leading the industry."

  

  The automaker expects that its two other battery plants in western Tennessee and central Kentucky will produce up to 129 GWh of electricity each year, which is said to be twice the country’s current total battery output.

  

  Bill Ford told reporters last week that the company "almost certainly" will need more layout to help it achieve its goal of fully electrifying 40-50% of its global fleet by 2030.

  

  "Even if these factories do not generate any positive free cash flow before the end of this decade, it is important for Ford to convey the message to stakeholders and customers that it attaches great importance to zero-emission vehicles," the relevant analyst said in a report. "Ford CEO Jim Farley seems to be taking active and urgent action to make up for the lost time in the industrialization of the mass production of electric vehicles."

  

  Ford executives said that Blue Oval City will become the type of vertically integrated, closed-loop production facility they believe is essential for sustainable manufacturing.

  

  The site covers an area of ​​6 square miles and will have an assembly plant to build the next-generation electric F series on a dedicated electric vehicle architecture, which is different from Lightning's improved internal combustion engine platform. Executives said the plant is Ford's first new assembly plant on undeveloped land since the opening of Kentucky trucks in 1969. It will be carbon neutral and may use geothermal, solar and wind energy.

  

  Tennessee Governor Bill Lee stated that the state will establish a trade school in the region to train 6,000 workers who will be employed there.

  

  Ford will manufacture batteries at the same location to power trucks. Blue Oval City will also provide space for Redwood Materials, a battery recycling company that Ford partnered with last month, to convert production waste and old batteries into new materials.

  

  "This aims to be a very efficient ecosystem," Ford North America chief operating officer told Automotive News. "If you don't care so much about how to build an electric car, then it doesn't matter much to build an electric car. The overall layout and environment are as important as the products we are building."

  

  As part of a joint venture with South Korean battery manufacturer SK Innovation, Ford plans to establish a dual battery plant in Kentucky. Both plants will provide batteries for multiple models and are close to several Ford assembly plants.

  

  Farley told CNBC last week that internal sources of battery production are important for the company to avoid problems such as global semiconductor shortages. "We have to learn how to make them in this country," he said. "We can no longer import raw materials from half of the earth."

  

  In short, Ford will invest US$7 billion in projects in Kentucky and Tennessee, of which US$4.4 billion will come from SK.

  

  Ford has invested in electric vehicles in the past, but models such as Focus Electric and C-Max Hybrid have not been successful and have ceased production. Executives believe that this time, their bigger bets will be rewarded. "We will have an incredible lineup of new vehicles that people cannot imagine today,"

  

  Ford is satisfied with the Mustang Mach-E now on sale and the F-150 Lightning that will be launched next year. He said that the 150,000 bookings for the electric pickup "far exceeded our expectations," which convinced the company that it was on the right path.

  

  Early demand has persuaded automakers to adjust their electric vehicle targets. In May of this year, it planned to use electric vehicles in 40% of its global fleet by 2030, but now Ford says it will reach half. Farley said the transition "may be faster than Ford expected."

  

  Bill Ford said that the company’s situation is very different from 10 years ago, when regulatory requirements drove most of its electric vehicle decisions.

  

  "The technology has developed to the point where it is likely to be adopted on a large scale," he said. "This is really a fusion of technology and customer awareness. Mach-E and Lightning are very attractive to customers. Do we have many questions to answer in the process? Of course, we want to ensure that we are at the forefront of the future."

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