The transition from gasoline-powered vehicles to those relying on electricity picked up speed September 27. Ford announced that it will build three battery factories and an electric truck plant in Tennessee and Kentucky, creating 11,000 jobs over the next four years.
The company described the investment, which it said would enable it to produce more than one million electric vehicles a year in the second half of this decade, as the single largest in its 118-year history. Ford will invest $7 billion, and a South Korean supplier, SK Innovation, will add $4.4 billion.
“I think the industry is on a fast road to electrification,” Ford’s executive chairman, William C. Ford Jr., said in an interview with The New York Times. “And those who aren’t are going to be left behind.”
There are already more than 50 electric models available in the U.S., according to the Department of Energy, including 14 small SUVs, 10 midsize cars, and eight standard SUVs.
Overall, The Wall Street Journal’s Mike Colias reported, Ford has committed to spend $30 billion on electric vehicles through 2025, with some of that already spent. It is a signal that Ford isn’t ceding this ground to rival General Motors, which has pledged to shift to electrics and produce its own batteries.
The industry “has made a hard pivot to electric vehicles in recent months,” wrote The Times’ Neal E. Boudette, “because of growing environmental concern — and because of the competitive threat posed by Tesla, the dominant maker of electric cars.
“Established automakers like Ford and General Motors are racing to catch up to Tesla, which is on track to sell more than 800,000 electric cars this year. Tesla has become the most valuable automaker in the world by far, with a market capitalization of nearly $800 billion. Ford’s market value is $56 billion.”
Ford executives say they are seeing higher-than-expected demand for a forthcoming electric F-150 pickup truck, called the Lightning, collecting more than 150,000 nonbinding reservations since it was unveiled in May.
Covering nearly six square miles, the Tennessee complex, 50 miles northeast of Memphis, would be roughly three times the size of Ford’s River Rouge plant complex near its Dearborn, Michigan, headquarters. It will feature an auto plant and a battery production facility.
Ford and SK Innovation will build two battery manufacturing plants in Glendale, Kentucky, 50 miles south of Louisville. The batteries made there will be used at North American plants that will produce Fords and Lincolns.
"This is our moment - our biggest investment ever - to help build a better future for America," said Jim Farley, Ford's president and chief executive. “We are moving now to deliver breakthrough electric vehicles for the many rather than the few.” The company has already ramped up investment in EV production at its Texas and Michigan plants.
Mike Ramsey, a Gartner analyst, told The Times, “The fact they are spending billions of dollars means they’re saying: ‘There’s no turning back. We’re really going to do this.’”
Even companies that have resisted electric cars have been changing their tune, Boudette reported. Toyota, in a sudden shift in strategy, said recently that it planned to spend billions of dollars over the next decade to build battery factories and hoped to sell two million electric cars a year by the end of the decade.
Several other automakers, including Volkswagen, Mercedes-Benz, BMW, Hyundai and Stellantis, which was formed by the merger of Fiat Chrysler and France’s Peugeot, are also investing billions of dollars to produce electric vehicles.
Ford told the BBC that the announcement was not timed to coincide with this week's voting on Capitol Hill on bills that include major provisions to tackle climate change. But the company said it supports passage of both bills, which would “help more Americans get into electric vehicles, while at the same time supporting American manufacturing and union jobs.”
Incentives and federal investment to accelerate the nation’s transition to EV’s are key components of President Biden’s Build Back Better plan. PRG considers those initiatives essential elements in our fight against climate change and common-sense supplements to a carbon tax.