DETROIT – Ford Motor and battery supplier SK Innovation plan to invest more than $ 11.4 billion in new U.S. facilities that will create nearly 11,000 jobs for the production of electric vehicles and batteries.
Ford is building two lithium-ion battery plants and a huge 3,600-acre campus in western Tennessee through a joint venture with South Korea-based SK called BlueOvalSK, the automaker said on Monday evening. The campus will include another battery plant built with SK along with a supplier park, recycling center and new F-series electric truck assembly plant, Ford CEO Jim Farley told CNBC.
The plans are the latest from Ford to ramp up the development and production of electric vehicles – including batteries – under Farley, who started at the helm of the automaker this week a year ago. They also support President Joe Biden’s call for companies to move onshore supply chains amid a global semiconductor die shortage that has disrupted several industries, including the automotive industry.
A battery manufacturing complex that US automaker Ford Motor Co and its South Korean battery partner SK Innovation plan to build in Kentucky and open in 2025 can be seen in an artist version that was released on September 27, 2021.
Ford Motor Co | Handout | via Reuters
The investment is part of Farley’s “Ford +” turnaround plan to make the automaker’s traditional operations more profitable and better position it for emerging sectors such as autonomous, electric and connected vehicles.
“This is the new Ford,” Farley told CNBC during a telephone interview. “It’s time. We’re shoveling in the ground, 11,000 new employees. … It’s a huge commitment to build these digital products.”
Ford doesn’t expect to borrow additional debt to fund the plans, Farley said. He said the steps will be funded from the company’s profits.
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The new investment is on top of the $ 30 billion that the company previously announced would flow into electric vehicles by 2025, about $ 7 billion of which was invested as early as February.
Production at the plants, apart from one of the battery plants in Kentucky, is slated to begin in 2025, the company said. According to Ford, the second battery plant in Kentucky will go online in 2026.
The “new Ford” is a drastic pivot from Farley’s predecessor Jim Hackett, who previously said the automaker sees “no benefit” in producing its own battery cells. Ford’s Crosstown rival General Motors will spend $ 4.6 billion on battery production from 2023 through a joint venture with LG Chem.
Farley said the investment should be further evidence that Ford, which many on Wall Street believed was lagging behind in electric vehicles, is well positioned to lead the segment. “I don’t know of any other company that has made this announcement. Why would you ever think that we are behind? We’re up front, ”said Farley.
Ford’s shares have more than doubled since Farley became the automaker’s CEO almost a year ago.
Approximately $ 5.6 billion of Ford’s investment in SK will go to a new campus called Blue Oval City in Stanton, Tennessee, and $ 5.8 billion for the two factories in Glendale, Kentucky. Ford will cover approximately $ 7 billion of the $ 11.4 billion, according to Lisa Drake, Ford’s chief operating officer for North America.
“This is a really crucial moment for us and our country today,” Drake told reporters during a phone call. “We announce the largest single investment in new manufacturing facilities in Ford’s 118-year history.”
The three new plants for BlueOvalSK will give Ford 129 gigawatt hours of US production capacity per year – enough to power 1 million electric vehicles annually, Ford Icials said. That’s more than half of the EV production capacity Ford is expected to have worldwide by 2030.
“This is truly an overwhelming project that underscores Ford’s ambition for the fast growing US EV industry,” said Yoosuk Kim, global marketing director for SK Innovation, during a call.
New F series is coming
Ford expects the new vehicle manufacturing facility in Tennessee to be carbon neutral once fully operational, including zero-waste processes through to landfill.
Farley said the plant will build new F-series electric pickups. He added that the next-generation pickups will be designed exclusively as electric vehicles, unlike the upcoming F-150 Lightning, which is based on the traditional internal combustion engine pickup.
Ford has begun pre-production of its F-150 Lightning electric pickup truck at a new facility in Dearborn, Michigan.
Michael Wayland | CNBC
“We will build an all-electric, bottom-up, optimized product platform at this facility. It will be the largest facility in our company’s history,” said Farley. “We’re going to be building a lot of fantastic F-Series electric vehicles there. We’re not going to say exactly what type it is.”
Farley said that with this announcement, the company is “reinventing what a pickup truck would be,” including the pallet. Drake said Ford expects a third of the full-size pickups sold in the US will be fully electric by 2030.
Ford’s current F-Series includes the F-150 and larger versions of the full-size truck, as well as medium-duty trucks and chassis for commercial buyers.
Farley and Drake compared the importance of the new EV plants to the mass production of the Model T by company founder Henry Ford, which made vehicles more affordable and accessible to the general public.
Ford previously said it expects at least 40% of its global sales will be electric vehicles by the end of this decade. The target was announced before the Biden government set a target last month of making half of all new car sales from electric vehicles, including plug-in hybrids, by 2030
In addition to manufacturing facilities, Ford plans to invest $ 525 million over the next five years, including $ 90 million in a pilot program in Texas to train skilled technicians to service electric vehicles.
“This is just the beginning of our drive to lead America in sustainable transportation for the next century,” said Drake. “This investment propels us forward to lead the electric revolution.”
The Mustang Mach-E is Ford’s first new fully electric vehicle with a $ 11 billion investment plan in electrified vehicles by 2022.
Michael Wayland | CNBC