Ford Motors is pushing ahead with electric vehicle (EV) production with a $5.6 billion manufacturing plant that can produce half a million trucks annually.
- Ford’s $5.6 billion factory, BlueOval City, in Stanton, Tennessee, is expected to open in 2025 and make 500,000 electric trucks yearly—40% more than the company’s original goal.
- The factory will make a quarter of the 2 million EVs Ford plans to build each year by the end of 2026.
- The company is attempting to build its EV presence to compete with forerunner Tesla by investing $50 billion into developing and manufacturing EVs by 2026.
- Ford has set a goal of an 8% margin on EV earnings before interest and taxes by 2026, according to Bloomberg.
Why it’s news
EVs have been dominating the market with more Americans switching to electric and Ford is pushing itself to be the number-one electric brand—investing billions into manufacturing. Even though it anticipates losing $3 billion this year on its EV production, the company expects the division to be the future leader.
Ford is building a $5.6 billion EV manufacturing compound in Stanton, Tennessee, including a battery factory by South Korea’s SK On and Ford truck manufacturing facilities.
The compound, called BlueOval City, is expected to be finished by 2026 and can manufacture 500,000 electric trucks per year—a quarter of the 2 million EVs Ford plans to build yearly.
The company has found success with its electric F-150 Lightning delivering 13,258 electric F-150s in 2022 and being named the best-selling truck in December.
The success of the electric truck has pushed the company to make more innovations announcing a new fully autonomous option it plans to implement in its new electric trucks and leading to the expansion of the Tennessee factory.
“We’re seeing growth now, so we want to build a bigger plant because we need the capacity,” says Ford CEO Jim Farley.
Ford has set a goal of an 8% margin on EV earnings before interest and taxes by 2026, with the new production, the company believes it can close the earnings gap with Tesla, which is operating at nearly 17%.
“We can do better than 8%, especially on a pickup truck,” says Farley. “The reality is that Tesla has not had a lot of competition until Ford and other brands, so their pricing is going to go down. Year over year, Tesla’s prices have come down $7,000.”
Ford continues to push forward with its EV production, but it has come at a high cost for the company. Ford recently announced that it lost $3 billion on its EV sales to consumers this year, but it still expects to hit the profit targets of between $9 billion and $11 billion.
The $3 billion combines the last two years as the company lost about $900 million in 2021 and $2.1 billion in 2022. Although it lost money, it expects to make up for lost revenue with its EV expansion and new trucks coming to market.
Surprising move to automation
Ford plans for its new electric truck series to be focused on autonomous driving to the point where drivers can watch movies and sleep while the truck stays on the road.
“On the highway on a sunny day, you should be able to go to sleep in your truck or make a call or do whatever you want to do in your truck while it drives for you,” says Farley. “It will be completely digital. It’s a really breakthrough product.”
Ford currently has a semi-autonomous feature called the BlueCruise that allows drivers not to hold the wheel at all times but to remain focused on the road, but is now pushing for full automation.
Ford’s move toward autonomous driving is surprising after the company pulled the plug on its self-driving startup Argo AI.
The company built software, hardware, maps, and cloud-support infrastructure to power self-driving vehicles and was primarily backed by Ford, but suffered many setbacks with regulations and other issues.
Ford ended up cutting the company, saying that self-driving cars were too advanced and further out than the company initially expected, but now it is back to implementing self-driving features in its new trucks.