Ford Increases Electric Vehicle Spending to $22bn

Ford Motors increased its planned investment into vehicle electrification to at least $22bn by 2025, nearly doubling its previous commitment of $11.5bn.

The investment will help the company reach its goal of launching 40 electric vehicle (EV) models by 2022, with 16 of those models being fully electric. The company plans to make the electric F-150 pick-up truck in Michigan, with sports utility vehicles (SUVs) made at plants in Canada, and the electric Mustang assembled in both China and Mexico.

Ford's announcement comes at a time when major American automakers are investing more in electrification and setting targets to help them meet expected demand. Competitor GM increased its planned EV and autonomous vehicle investment to $27bn by 2025 from its originally planned $20bn. One goal of GM's investment is to help them launch 30 all-electric models by 2025.

Meanwhile Tesla, the US' largest electric car maker, spent 2020 expanding the capacity of its Fremont, California, facility to produce 500,000 Model 3 and Y vehicles a year, as well as 100,000 Model S and X vehicles a year.

In the last year, negotiations with Unifor, Canada's largest private sector union, led to Ford as well as GM and Stellantis increasing spending in Canada as part of their planned EV investments. Ford is using $1.34bn of its planned $22bn to convert the Oakville, Ontario, plant to EV production by 2026. GM on the other hand is spending $800mn on its Ingersoll, Ontario, plant to convert it to EV manufacturing later this year. Stellantis agreed to spend $1.6bn on developing a platform to build both hybrid and battery electric vehicles as part of its three-year agreement with the Canadian union.

President Joe Biden's administration is attempting to help foster the growth of electric vehicle manufacturing within the US by pledging to transition the government vehicle fleet to entirely zero emission cars and install 500,000 public charging stations.

The growing transition to electric vehicles is expected to increase demand for lithium-ion batteries, which tend to contain lithium, nickel, and cobalt. While the US currently consumes cobalt in metal form to produce alloys, cobalt battery chemicals should gain more importance in the US as automakers transition. Tesla views battery production as a fundamental limit on global EV production.

Still, Ford is grappling with the ongoing semi-conductor shortage which has led the company to scale back some of its facilities temporarily. Company expectations are that the shortage could cause a 10-20pc drop in first quarter production.

This article is reproduced at www.argusmedia.com