What Ford’s EV Production Investment Means for the Automotive Industry

Recently, American automotive giant Ford announced that it will be investing £11.4 billion into electric vehicle battery plants. With such a significant commitment made by one of the world’s largest car manufacturers, what does Ford’s EV production investment mean for the automotive industry?

What are the details of Ford’s investment?

Ford had previously announced plans to invest more than $30 billion into electric vehicles by 2026 and expect that EVs will make up 40-50% of their global vehicle sales by 2030. However, unlike some other car manufacturers, they haven’t committed to going all-electric, most likely due to the US not currently having plans for an ICE vehicle ban (apart from in California and New Jersey).

Despite this, last week Ford announced their commitment to EV development, revealing plans to spend $11.4 billion on new factories in Kentucky and Tennessee that will produce electric cars and pickup trucks as well as the mass-production of batteries to power all Ford EV models.

The factories are “designed to be carbon neutral with zero waste to landfill once fully operational” and will also create 11,000 new jobs. Ford has also announced a $525 million investment in training EV technicians across the US to service the vehicles.

A move towards an electric revolution in the US?

While a number of manufacturers such as Volvo, Jaguar Land Rover and Bentley have made pledges to go all-electric in the near future, Ford’s investment indicates that even US manufacturers are taking the EV transition seriously.

While many European countries have committed to an ICE vehicle ban, the US have not, and Ford will still have a huge market to sell their fossil-fuel-powered cars, so their commitment to EVs suggests faith in the future of the market.

Ford’s investment indicates that they believe the US market will shift towards EVs eventually, and having the plants based in the US suggests they want the US to be a market leader for EV development.

Ford Executive Chair Bill Ford stated that the automotive industry hadn’t changed that much since his great grandfather led the company, at least until five years ago, and that now we are “on the cusp of a revolution”.

Ford’s new factories will be in states where the coal industry once reigned supreme, giving more symbolic weight to Ford’s investment in environmentally-friendly technology, possibly heralding the transition of an industry historically notorious for GHG emissions into a greener future.

What could the knock-on effects be?

Ford’s investment in EV production could also become a challenge to rival car manufacturers to make similar commitments so as not to fall behind. With the investment being in the US, it may also encourage other countries to try and compete to be ‘market leaders’ in EV development.

Ford are not the first manufacturer to invest heavily in EV development, so while their investment is significant, it may not be revolutionary. However, when a major name in any industry makes such a bold commitment, it can spur competitors into action. We may start seeing more concrete details about EV manufacturers’ investment plans and even additional investment as brands try to one-up each other.

As they haven’t set a date to go all-electric yet, Ford clearly believes there will still be significant demand for new ICE vehicles for a while in the countries where they are permitted, but there are strong indications that this will not always be the case.

If you are interested in EV products such as charging cables, sockets and other accessories, you can view our electric vehicle products range by Degson.

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