Ford’s Biggest Investment Ever Is $11.4 Billion for EV, Battery Plants in the South
The move will create 11,000 jobs and the most advanced (and expensive) auto production complex in Ford’s entire history.
On Monday night, Ford announced what it's touting as its "biggest investment ever"—an $11.4 billion bet on the domestic production of its electric vehicles and the batteries that power them.
Together, Ford and its partner in battery production SK Innovation will funnel funds into Tennessee and Kentucky to help favorably position the automaker amongst the growing competition of EVs. The stream of cash will create thousands of new jobs at a large "mega campus" for EV production located just an hour outside of Memphis, plus three total battery production facilities split between the two states.
In Stanton, Tennessee, Ford will build a so-called "mega campus" that it calls "Blue Oval City." While not quite the size of the long-lost city of Fordlândia, the newly coined Blue Oval City will allegedly be huge. The aptly named facility sits on nearly six square miles of real estate, making it—quite literally—nearly the size of a small city. Ford says that it will use this "hive of technical innovation" as not only the assembly location for the electric F-150 Lightning, but it will also house a supplier park and one of its new battery assembly facilities. The plant is also aimed at being carbon neutral by the time it opens in 2025 thanks to a slew of renewable and sustainable resources like geothermal, solar, and wind power.
Meanwhile, Ford will build not one, but two battery plants in Glendale, Kentucky. The planned BlueOvalSK Battery Park, which is named after Ford's technical partnership with the Korean energy refiner, will be just under half the size of Blue Oval City at around 2.3 square miles. Together, all three battery plants will have a combined output of 129 gigawatt-hours of domestic battery production capacity.
Ford will pony up the majority of the money, pledging $7 billion and leaving SK Innovation to foot the remaining $4.4 billion. Blue Oval City is expected to cost approximately $5.6 billion, while BlueOvalSK Battery Park is a tad pricier at $5.8 billion.
“This is our moment—our biggest investment ever—to help build a better future for America,” said Ford CEO Jim Farley. “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.”
In July 2020, then-Ford CEO Jim Hackett claimed that there was "no advantage" to the automaker producing its own battery cells. But if supply chain hold-ups have taught the auto industry anything, it's that being self-sufficient in as many areas as possible can lead to a competitive advantage.
Now, both new facilities are poised to open in 2025, meaning that Ford has not only changed its position on the matter under its new leadership, but will aim to fulfill its own battery supply needs in less than half a decade.
Recently, U.S. lawmakers revealed a proposed change to the incentives available to EV buyers, including a maximum time-of-sale benefit of $12,500 to promote the adoption of electric cars. A significant chunk of this money is based on a series of protectionism-related benefits, like an additional $500 for vehicles with U.S.-built battery packs. And if Ford can also pull off a union-based auto plat (which isn't exactly common for auto manufacturing facilities located in the southern U.S. states) it would also qualify the vehicles for an additional $4,500 incentive.
These would, of course, be on top of the $7,500 base credit for EVs, which falls off for non-U.S.-built EVs after 2027 in the proposed legislation. However, a new U.S. plant would help ensure that many Ford buyers purchasing a vehicle with a Blue Oval emblem would be able to continue collecting the $7,500 base credit, plus the $4,500 union-built incentive, and the $500 made-in-the-USA battery pack incentive, all after 2027. It's worth noting that these limitations recently drew fire from Tesla CEO Elon Musk who accused Ford and the United Auto Workers Union of penning the proposed incentive. And Honda isn't too happy either.
Ford estimates its investment will create 11,000 new jobs—6,000 in Stanton, Tennesse, and 5,000 in Glendale, Kentucky—and it will need every single hand it can get. The next decade is playing out to be a game-changer in global vehicle propulsion, especially as all automakers across the globe rapidly shift focus towards electrification. That means every vehicle, every battery cell, and every worker is crucial to EV dominance.
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