Ford (F) to Transform EV Future in U.S. Via $11.4B Investment
Ford's (F) latest investment encompasses $5.6 billion for building a mega campus called Blue Oval City in Tennessee and $5.8 billion for building the...
Ford F recently announced its plans of building two new environmental-friendly and technologically-advanced campuses in Tennessee and Kentucky that will produce the next generation of electric F-Series trucks as well as the batteries to power the future electric Ford and Lincoln vehicles.
The Dearborn-based automaker will partner with its battery supplier, SK Innovation, to invest $11.4 billion in the new U.S. facilities to produce electric vehicles (EV) and batteries. The investment will also generate nearly 11,000 jobs at these plants. The latest investment by Ford marks the largest ever U.S. investment in EVs at one time by any automotive manufacturer.
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 South Korea-based SK Innovation.
Approximately $5.6 billion of Ford’s investment with SK will go for building an all-new mega campus called Blue Oval City in Stanton, TN. The investment will create roughly 6,000 new jobs, and is aimed at revamping vehicle and battery designing, manufacturing and recycling.
Spanning across 3,600 acres, Blue Oval City will be among the largest auto manufacturing campuses in U.S. history, encompassing vehicle assembly, battery production and a supplier park in a vertically-integrated system. The assembly plant will bank on Ford’s expertise and state-of-the-art technologies to deliver cost efficiency, while achieving carbon neutrality in the manufacturing process with zero waste to landfill once fully operational. Further, Blue Oval City will pivot technical innovation to build the next-generation electric F-Series trucks. This growth opportunity will enable Ford to serve new customers with an augmented electric truck menu. Blue Oval City will usher in a new era for electric manufacturing. The plant will commence production in the year 2025.
Joining the Blue Oval City is a planned $5.8-billion, 1,500-acre BlueOvalSK battery manufacturing campus in Glendale, KY, which is targeted to commence operations in 2025. The twin lithium-ion battery plants on the site will create 5,000 jobs and are intended to supply Ford’s North American assembly plants with locally-assembled batteries for powering the next-generation electric Ford and Lincoln vehicles.
Additionally, Ford is investing $90 million in Texas alone as part of a $525-million total investment across the United States during the next five years to transform America’s auto technician industry. The investment will go toward training the current and next generation of technicians, and is aimed at developing highly skilled technicians that will support Ford’s enhancing EV portfolio.
This news comes amid the robust demand for the all-new Ford F-150 Lightning truck, E-Transit and Mustang Mach-E EVs. These are Ford’s latest plans to enhance the production of EVs, including batteries, under Jim Farley, who began leading the company a year ago. Ford will contribute $7 billion of the total planned investment, being the biggest ever investment by the automaker. The investment, part of Ford’s more than $30-billion investment in EVs through 2025, marks the achievement of a milestone and kicks off an era of electrification in America. It supports the company’s long-term goal to create a sustainable American manufacturing ecosystem, and accelerates its progress toward achieving carbon neutrality, in line with the Paris Climate Agreement.
The latest investment is part of Farley’s “Ford+” turnaround plan to make the automaker’s operations more profitable and create a niche in the trending sectors, such as the autonomous, electric and connected vehicles. Per Farley, the latest investment validates that Ford, which many believed was behind on EVs, is positioned to dominate the EV landscape.
These investments build on Ford’s recent announcement that it will team up with Redwood Materials, a leading battery materials company, to make EVs more sustainable and economical for customers by building a domestic battery supply chain, creating recycling options for the end-of-life vehicles and enhancing battery production.
Amid the heightening climate change concerns, investors are intrigued by automakers that provide green transportation solutions. Automakers like Tesla TSLA, General Motors GM and Volkswagen VWAGY are leaving no stone unturned to step up their EV game. Ford is also committed toward its goal of providing completely carbon-free transportation in the upcoming years and is boosting the company’s electrification efforts to attain this target. The automaker has always been at the forefront of the automotive revolution and is focused on its vision of an all-electric future, including providing fifth-generation lithium ion batteries as well as preparing for the transition to solid-state batteries, which warrant longer ranges, reduced costs and safer EVs for customers. It has committed to invest more than $30 billion by 2025 for the electrification of its commercial and retail fleet by capitalizing on its strength, starting with the EV versions of the company’s most popular models.
Ford currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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