Ford Motor Company made a major announcement today regarding the future of vehicle production. After more than a century of pumping out ICE vehicles, Ford, like many automakers are at the start of a dramatic transition to convert their operations to manufacture electric vehicles.
Ford kicked off their electric efforts with the Focus Electric from 2011-2018, but more recently found success with the Mustang Mach-E, however that’s just the start of the next generation of electric vehicles at Ford. There’s a strong focus on the F150 Lightning, with more than 130,000 pre-orders, which is a good sign that at least some of the market for their largest nameplate are ready to make the EV transition.
Over the next decade and change, Ford will need to transition each of their vehicle segments to electric vehicles, while also performing the difficult challenge of maintaining profits on their ICE products as consumer, commercial and Government demand inevitably fades away as the world shifts to zero-emission vehicles.
As a global company, with multiple global vehicle platforms, Ford has dozens of factories around the world. It seems rather than retrofitting any of the existing manufacturing plants, the blue oval are investing in a new, Mega Campus known as ‘Blue Oval City’ to build electric Ford and Lincoln vehicles.
Producing Electric Vehicles at scale requires automakers to have a solution to sourcing batteries, something there simply isn’t enough of in the world today. Ford will not only build a campus to house their F-Series EVs, but are also extending their partnership with SK-Innovation on Battery Park.
|Blue Oval City||Stanton, Tennessee||Announced||~6,000||Ford F-Series (electric), batteries||Scheduled to start production in 2025. Battery manufacturing will be part of BlueOval SK, a joint venture with SK Innovation.|
|BlueOval SK Battery Park||Glendale, Kentucky||Announced||~5,000||Batteries||Scheduled to start production in 2025. Also part of BlueOval SK.|
With the world available to them, Ford has chosen Tennessee and Kentucky to build the new vehicle and battery production factories. There’s a lot happening in the US right now by way of incentives and many of these rely on the jobs being American. Combined both factories will see as many as 11,000 jobs. Given many jobs in existing ICE factories will go over the next decade, I’d hope Ford are able to retrain some of those existing staff.
Large new factories don’t come cheap and building two of them is even more expensive. This will take the largest-ever U.S. investment in electric vehicles by Ford and partner SK Innovation, with the total project cost a Mega $11.4 billion.
Ford’s Mega Campus in Stanton, Tennessee will cost $5.6 billion. As far as an ROI, it’ll take many years to pay back the cost of these factories, but if Ford wasn’t to be competitive in 2030 and beyond, this is the scale of investment that’s necessary.
Blue Oval City will become a vertically integrated ecosystem for Ford to assemble an expanded lineup of electric F-Series vehicles and will include a BlueOvalSK battery plant, key suppliers and recycling. Ford’s new Tennessee assembly plant is designed to be carbon neutral with zero waste to landfill once fully operational.
Investments in the new Tennessee and Kentucky battery plants are planned to be made via BlueOvalSK, a new joint venture to be formed by Ford and SK Innovation, subject to definitive agreements, regulatory approvals and other conditions.
“This is a transformative moment where Ford will lead America’s transition to electric vehicles and usher in a new era of clean, carbon-neutral manufacturing. With this investment and a spirit of innovation, we can achieve goals once thought mutually exclusive – protect our planet, build great electric vehicles Americans will love and contribute to our nation’s prosperity.”Ford Executive Chair Bill Ford.
This news comes amid strong demand for the all-new Ford F-150 Lightning truck, E-Transit and Mustang Mach-E electric vehicles, and is on top of Ford’s recent announcement to expand production capacity and add jobs at the Ford Rouge Electric Vehicle Center in Dearborn, Mich.
“This is our moment – our biggest investment ever – to help build a better future for America. We are moving now to deliver breakthrough electric vehicles for the many rather than the few. It’s about creating good jobs that support American families, an ultra-efficient, carbon-neutral manufacturing system, and a growing business that delivers value for communities, dealers and shareholders.”Jim Farley, Ford president and CEO.
Ford’s $7 billion investment is the largest ever manufacturing investment at one time by any automotive manufacturer in the U.S. Part of Ford’s more-than-$30 billion investment in electric vehicles through 2025, this investment supports the company’s longer-term goal to create a sustainable American manufacturing ecosystem, and to accelerate its progress towards achieving carbon neutrality, backed by science-based targets in line with the Paris Climate Agreement. Overall, Ford expects 40% to 50% of its global vehicle volume to be fully electric by 2030.
“We are proud to be partnering with Ford as they open a new chapter in automobile history. We are excited to be taking this decisive leap together, as partners, and to bring about our common vision for a cleaner planet. Our joint venture, BlueOvalSK, will embody this spirit of collaboration. We look forward to growing our trust-based partnership by delivering on our market-leading value proposition, experience and cutting-edge expertise.”Dongseob Jee, president of battery business, SK Innovation.
All-new Ford Blue Oval City
Reimagining how electric vehicles – and the batteries that power them – are designed, manufactured and recycled, Ford is creating an all-new electric vehicle manufacturing ecosystem.
Blue Oval City will be among the largest auto manufacturing campuses in U.S. history. Like the iconic Rouge complex in Michigan did a century earlier, Blue Oval City will usher in a new era for American manufacturing.
The 3,600-acre campus covering nearly 6 square miles will encompass vehicle assembly, battery production and a supplier park in a vertically integrated system that delivers cost efficiency while minimizing the carbon footprint of the manufacturing process.
The assembly plant will use always-on cloud-connected technologies to drive vast improvements in quality and productivity. The mega campus is designed to add more sustainability solutions, including the potential to use local renewable energy sources such as geothermal, solar and wind power.
“West Tennessee is primed to deliver the workforce and quality of life needed to create the next great American success story with Ford Motor Company and SK Innovation. This is a watershed moment for Tennesseans as we lead the future of the automotive industry and advanced manufacturing.”Tennessee Gov. Bill Lee.
Creating approximately 6,000 jobs, Blue Oval City will be a hive of technical innovation to build next-generation electric F-Series trucks. This growth opportunity will allow Ford to reach new customers with an expanded electric truck lineup.
“Blue Oval City’s assembly plant will harness Ford’s global manufacturing expertise and cutting-edge technologies to deliver cost efficiencies and the quality that our customers expect. This will enable Ford to lead in the race to bring dependable, affordable and advanced electric vehicles to even more Americans.”Kumar Galhotra, Ford president, Americas & International Markets Group.
Bigger assembly plant, smaller environmental impact
Despite its size, the assembly plant at Blue Oval City is designed to have as minimal an impact as possible on the surrounding environment – and even to generate positive impacts. The assembly plant’s goal is to have a regenerative impact on the local environment through biomimicry in design of the facility. From the start of production in 2025, Ford’s goal is for the assembly plant to be carbon neutral.
Through an on-site wastewater treatment plant, the assembly plant aspires to make zero freshwater withdrawals for assembly processes by incorporating water reuse and recycling systems. Zero-waste-to-landfill processes will capture materials and production scrap at an on-site materials collection center to sort and route materials for recycling or processing either at the plant or at off-site facilities once the plant is operational.
Ford is collaborating with Redwood Materials, a leading battery materials company, to make electric vehicles more sustainable and affordable for Americans by localizing the supply chain network, creating recycling options for scrap and end-of-life vehicles, and ramping up lithium-ion recycling. Ford believes battery recycling is essential for the success of an electrified future and has the potential to offer significant economic benefits as well as help solve for end-of-life battery recycling.
BlueOvalSK Battery Park
Joining the Ford electric manufacturing revolution is a planned $5.8 billion, 1,500-acre BlueOvalSK battery manufacturing campus in Glendale, Ky., which is targeted to open in 2025.
Twin co-located plants will be capable of producing up to 43 gigawatt hours each for a total of 86 gigawatt hours annually. Together, these American-made batteries will power next-generation electric Ford and Lincoln vehicles.
Bringing 5,000 new jobs to Kentucky, BlueOvalSK Battery Park will be centrally located to support Ford’s North American assembly plants’ footprint.
“We thank Ford Motor Company and SK Innovation for their investment in Team Kentucky. This is the single largest investment in the history of our state and this project solidifies our leadership role in the future of the automotive manufacturing industry. It will transform our economy, creating a better Kentucky, with more opportunities, for our families for generations. Our economy is on fire – or maybe it’s electric. Our time is now. Our future is now.”Kentucky Gov. Andy Beshear.
Technician investments in Texas and the U.S.
Ford is investing $90 million in Texas alone as part of a $525 million total investment across the U.S. during the next five years to transform America’s auto technician industry.
The investment will go toward job training and career readiness initiatives for the current and next generation of technicians. These programs aim to develop highly skilled technicians and will support Ford’s growing portfolio of connected electric vehicles.