Ford Doubles Down on its EV Investments
Ford to Open US EV Assembly Plant
Ford (F) is doubling down on its push into the electric vehicle market, committing to spend $7 billion to build a new US assembly plant and three battery factories. The vehicle maker is teaming up with SK Innovation, the South Korean battery maker, which committed $4.4 billion to the project. With the plants, Ford and SK Innovation say they can build 1 million EV batteries per year.
The $7 billion bill marks Ford’s largest investment in manufacturing ever, and is the first time in decades the automaker is opening a new US assembly plant. The efforts underscore Ford’s commitment to EVs as the auto industry transitions toward making more green vehicles.
Profits Still Driven by Traditional Cars and Trucks
Ford is betting on electric vehicles even though the company’s profits are still largely derived from large, gas-powered pickup trucks and SUVs. As it stands, EVs only make up about 3% of US vehicle sales. EVs are still more expensive than gas-powered cars, which has hurt adoption. Despite all that, the strong reception for Ford’s Mustang Mach-E SUV and other EVs drove Ford’s decision to open a US assembly plant.
Ford has committed to spending a total of $30 billion on EVs through 2025, which is in line with the spending plans of its rivals. However, the car company said it is speeding up spending to get ahead of competitors.
EV Race Picks up Steam
Stricter emissions standards and global efforts to reduce fossil fuel use are forcing the vehicle industry to expand investments in electric vehicles. The car companies now see EVs and the digital services around EVs as a big growth opportunity, which is why Ford is investing $30 billion in EVs overall through 2025.
With consumers committing to a greener future, car companies are responding, pouring billions of dollars into developing batteries and EVs. Ford is making a bet by opening up an assembly plant in the US. It will be interesting to see if it pays off.
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