Electric vehicles

Ford’s future is electric. But how fast can it get there?

The company has been spending big to hit its goal of becoming the biggest EV maker, but some analysts say it has a long road ahead.
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· 4 min read

Ford’s latest goal is unsurprising, if ambitious: It wants to become the largest EV producer in the world.

To that end, last Thursday Ford CEO Jim Farley announced plans to increase production to 600,000 EVs per year globally in 2023—more than double the company’s initial targets.

After selling virtually no all-electric vehicles in 2020, Ford is aggressively investing to try and catch up with plans to spend more than $30 billion on electrification through 2025. The money could go a long way, but analysts warn the company will also face hurdles in the EV supply chain.

Ford sold about 18,900 in the first three quarters of this year, compared to GM’s 24,800 sales for the same period. For its part, GM has set a goal to reach 1 million EV sales globally by 2025. But it’s Tesla the Detroit automaker will be chasing to take the top EV spot, and its updated 2023 target still lags even the 1 million vehicles Tesla is on track to produce by the end of this year.

The road ahead for Ford

Ford hopes its new EVs, like the F-150 Lightning expected to roll out in 2022, will help its sales push ahead, and the company has made big investments toward that goal.

South Korean battery maker SK Innovation and Ford will spend $11.4 billion to build four facilities in Kentucky and Tennessee, three focused on batteries and one on assembly, in a joint venture called BlueOval SK, the companies announced in September. These battery plants are slated to come online in 2025, adding 86 GWh of production capacity in Kentucky and 43 GWh in Tennessee, according to SK’s third quarter earnings call. That’s enough to power more than 1 million EVs per year, Ford says.

Along with building batteries, the 3,600-acre campus in Tennessee will focus on the supply chain, battery recycling, and assembly of Ford’s F-150 Lightning trucks.

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In February, Ford announced a $1 billion investment in accelerating electrification in Europe. The company now plans to make its entire passenger-car lineup in Europe all-electric by 2030. Ford is upgrading its factory in Cologne, Germany, for EV production and expects its first EVs for European customers to be built there in 2023.

In September 2020, the company agreed to a $1.8 billion investment to manufacture five EVs at a factory in Ontario. Production there is expected to begin in 2025.

But some industry analysts have doubts about the company reaching its goals.

Simon Moores, a battery expert from Benchmark Mineral Intelligence, said Ford is on track to build about 900,000 EVs per year by 2030—lagging behind other automakers.

A lack of EV battery production capacity and scarcity of raw materials like lithium, nickel, and cobalt could keep Ford from hitting its targets. For what it’s worth, the company has made some forward-looking moves this year in the battery space, including a partnership with Redwood Materials to work on recycling batteries and creating a domestic supply chain for battery materials and an investment in solid-state battery company Solid Power.

And in November 2019, before it debuted the first of its new line of all-electric vehicles—the Mustang Mach-E—Ford made a $500 million investment in EV startup Rivian. It now owns a 12% stake in the company, which went public two weeks ago.

Ford and Rivian initially planned to build EVs together, but on Friday, the two companies confirmed they had mutually agreed to scrap plans to collaborate on EV development. In other words, Ford is now aiming for these ambitious targets alone.

Looking beyond the next decade, Ford—along with GM and a handful of other carmakers—signed a COP26 pledge to outright stop selling new vehicles that produce greenhouse gas emissions by 2040.

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