The news: Ford announced plans to build its first new US assembly plant in decades, along with three battery factories intended to strengthen its position in the EV market, per The Wall Street Journal.
Why it’s worth watching: Ford’s announcement marks a major step toward fulfilling its pledge to shift its business toward EVs. It was one of the companies that made a commitment to President Biden that half of the cars and light trucks sold in the US by 2030 will be EVs.
- By 2025, Ford plans to build two battery factories in Kentucky and a third in Tennessee located alongside a new factory dedicated to electric pickups.
- Ford expects to spend $7 billion on the project—it’s the largest manufacturing investment in its history.
- Ford is collaborating with South Korean battery maker SK Innovation to contract the battery facility. The two companies will invest $11.4 billion in the future of EVs.
- The factories will create 11,000 new jobs as well as helping to position Ford as a leading EV producer.
Why this could succeed: Ford has established a reputation as the leading truck manufacturer. Its F-Series pickup truck has been America’s best-selling vehicle for 39 straight years and is the industry’s top-selling truck for 44 consecutive years, per CNBC.
Ford has the market position to lead the move toward electric pickup trucks. The company says it is already seeing higher-than-expected demand for its forthcoming electric F-150 Lightning pickup truck, with more than 150,000 nonbinding reservations since its announcement in May.
- Ford’s investment in three battery plants in collaboration with SK Innovation can help it build in-house expertise in EV battery technology tailor-fitted for its vehicles. This could help it avoid issues like its rival GM’s $2 billion Chevy Bolt EV battery recall.
- EV pickup trucks could potentially become the next area of growth for EVs. Pickups outsold passenger cars for the first time in 2020. Their popularity gives market leader Ford a rare opportunity to reshape the industry toward EV adoption.