Ford and SK Innovation invest $11.4B to construct new EV plants – Roadshow

Ford is stepping up its EV manufacturing capability in a huge way.

Ford is making another monumental investment to accelerate its transition to an electrified future. On Monday, the automaker announced that, with partner SK Innovation of Korea, it will shell out $11.4 billion to construct several new manufacturing facilities dedicated to electric vehicles. Of that total, Ford is spending around $6.95 billion, while SK Innovation will provide the remaining $4.45 billion. This is the largest single manufacturing investment in the automaker’s near-120-year history.

That substantial outlay of greenbacks will be spent on two new facilities. The first is called Blue Oval City, which will be the largest, most advanced and most efficient factory of its kind in the company’s history. It will be located on a 3,600-acre site near Memphis in western Tennessee. This makes it about three times larger than the company’s famous Rouge assembly plant in Dearborn, Michigan. 

The site will include a vehicle assembly factory dedicated to building future electric F-Series trucks, as well as a battery manufacturing plant capable of churning out 43-gigawatt-hours’ worth of cells annually. Once up and running in 2025, the Blue Oval City assembly plant and battery factory will employ an estimated 5,800 people.

Ford is also investing in neighboring Kentucky to build a 1,500-acre facility called BlueOvalSK Battery Park. This will include two 43-gWH battery-manufacturing plants that, along with the factory in Blue Oval City, will give the automaker nearly 130-gWh of additional battery manufacturing capacity annually, enough to power a million EVs or more each year. Lithium-ion production for future Ford and Lincoln vehicles is estimated to start at one of these two assembly plants in 2025 and the latter about a year later.

This is what BlueOvalSK Battery Park should look like when completed. 

Ford is going to need every battery pack it can make. The automaker forecasts 40% of its US sales will be EVs by the year 2030. But will it have enough materials, like lithium and other hard-to-come-by elements necessary to build these vehicles? Greg Christensen, Ford North America EV footprint director, has no doubts. “We feel comfortable that we have the supplies to support this growth, enormous growth,” he said.

The automaker is spending lavishly on these new facilities for an important reason. “This is about localizing our battery production,” explained Christensen, to build batteries in America, Ford’s home market. As the chip shortage has illustrated, the US needs to strengthen its domestic supply chains. By bringing battery manufacturing in-house (vertically integrating, in corporate-speak), Ford is aiming to sidestep future problems.

Both Blue Oval City and BlueOvalSK Battery Park will be environmentally friendly. The goal is to have these facilities send zero waste to landfills, produce minimal emissions and aid the automaker in going carbon-neutral by the year 2050. Further burnishing its green credentials, the automaker plans to recycle used or damaged battery packs at both facilities. Ford is currently working with a company called Redwood Materials to develop ways of recycling old lithium-ion packs, to recuperate up to 95% of the core materials used in their construction.

Not only is lithium-ion recycling good for the environment, it’s good business, too. Ford will be able to reuse critical battery materials, helping keep prices low. The automaker aims to get its costs down to around $80 per kilowatt-hour later this decade. Building batteries domestically will be a huge boost as well, since materials don’t have to be shipped around the world, which creates unnecessary pollution and increases costs.

The vehicle assembly plant at Blue Oval City will manufacture electric F-Series trucks like this F-150 Lightning. 

The company is pushing ambitiously ahead into an all-electric future and these facilities are all about helping fuel EV growth, particularly on the truck side, where Ford hangs its hat. Currently, the company sources EV batteries from other facilities around the country and that will continue even after Blue Oval City and BlueOvalSK Battery Park open.

The upgrades announced here are in addition to other substantial outlays in recent years. Earlier this month, Ford said it was spending $250 million to upgrade three facilities in Michigan in order to support F-150 Lightning production. This investment is in addition to the $7.7 billion it’s spent in the state since 2016, an outlay that created around 7,000 jobs.

Beyond all that, the Blue Oval is also investing $525 million across the US in the next five years to train people to build and, perhaps more importantly, service its upcoming electric vehicles. These future cars and trucks are going to be more computerized and in some ways more complicated than their combustion-powered predecessors, and technicians will need training to keep this battery-powered fleet running its best. This substantial outlay also includes $90 million for Texas, which will serve as a pilot for these retraining programs, Christensen noted. The Lone Star State is all trucks, all the time, and it’s critical to Ford’s success. “We love Texas,” he added. “It’s a huge market for us, a huge pillar of strength.”

“You can certainly see the growth aspirations here,” said Christensen, as Ford constructs the manufacturing footprint necessary to forge ahead into an all-electric future. “How are you going to win the EV revolution? It’s by building facilities like this.”

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