The management of the automaker FORD has finally decided to switch to electric vehicles. Investments of $7 billion have already been approved. The project has been joined by South Korean company SK Innovation with a contribution of $4.4 billion.
Ford Switches to Electric Vehicles
Apparently, the rise of Tesla, Audi, and Toyota in the electric vehicle market has significantly influenced Ford’s leadership perception of reality. The company not only decided to produce electric vehicles but also plans to build an entire factory for battery manufacturing. A strong partner was involved in the project. With experience in battery production, SK Innovation promises a profitable collaboration.
Notably, Ford’s last large-scale construction was 50 years ago. Therefore, this project attracted attention. The company plans to build production facilities covering a total area of 23.3 square kilometers. The plant will be located in Stanton, Tennessee. The enterprise has been named Blue Oval City. A pleasant detail for Americans is the creation of 6,000 jobs.
But that’s not all. In Kentucky, the company will build another facility (BlueOvalSK Battery Park) for 5,000 jobs. This will be a specialized complex for developing innovative projects jointly with the South Korean company.
The plant is scheduled to launch in 2025. But before that, Ford plans to start producing electric vehicles using imported batteries. It’s easy to guess that these will be SK Innovation batteries. In addition to battery production, Ford plans to launch a line for recycling old batteries. This is an excellent capital investment for waste-free production. We will only learn how all this will be implemented in four years.
What Prospects Does Ford Have for Electric Vehicles
Own battery production will definitely affect vehicle prices. Eliminating component imports can significantly reduce the cost of the vehicle. Considering that batteries account for up to 15% of the cost of electric vehicles, this is a good criterion for pricing.
It cannot be said that Ford will gain more advantageous positions in the future. The same market leader Tesla is also working in this direction. Meanwhile, General Motors has already signed a contract with LG Chem and is building two battery factories. And Volkswagen plans to build six battery factories in Europe by 2030.
