Ford to invest nearly $2 billion in Kentucky EV-assembly plant, aims to outcompete rivals

Mint

2 days ago

Louisville(US), Aug 11 (AP) Ford Motor Co. will invest nearly USD 2 billion retooling a Kentucky factory to produce electric vehicles that it says will be more affordable, more profitable to build, and will outcompete rival models.
The automaker's top executive unveiled the new EV strategy Monday at Ford's Louisville Assembly Plant which, after producing gas-powered vehicles for 70 years, will be converted to manufacture electric vehicles.
'We took a radical approach to solve a very hard challenge: Create affordable vehicles that are breakthrough in every way that matters - design, technology, performance, space and cost of ownership - and do it with American workers,' Ford CEO Jim Farley said in a release.
The Big Detroit automakers have continued to transition from internal combustion engines to EV technology even as President Donald Trump's administration unwinds incentives for automakers to go electric. Trump's massive tax and spending law targets EV incentives, including the imminent removal of a credit that saves buyers up to USD 7,500 on a new electric car.
Yet Farley and other top executives in the auto industry say that electric vehicles are the future and there is no going back.
The first EV to roll off the revamped Louisville assembly line will be a midsize, four-door electric pickup truck in 2027 for domestic and international markets, the company said Monday.
The new electric trucks will be powered by lower-cost batteries made at a Ford factory in Michigan. The Detroit automaker previously announced a USD3 billion investment to build the battery factory.
The automaker sees this as a 'Model T moment' for its EV business - a reference to the mass-produced vehicle that launched the venerable automaker more than a century ago. But Ford says it's also a nod to the future and the vastly different way Ford says it will build electric vehicles.
The company said it will use a universal platform and production system for its EVs, essentially the underpinning of a vehicle that can be applied across a wide range of models, from sedans to SUV, and include both electric internal combustion vehicles.
The Louisville factory - one of two Ford assembly plants in Kentucky's largest city - will be revamped to cut production costs and make assembly time faster as it's prepared to churn out electric vehicles.
The result will be 'an affordable electric vehicle that we expect to be profitable,' Farley said in an interview with The Associated Press ahead of the announcement. 'This is an example of us rejuvenating our US plants with the most modern manufacturing techniques.'
The new platform enables a lineup of affordable vehicles to be produced at scale, Ford said. It will reduce parts by 20 per cent versus a typical vehicle, with 25 per cent fewer fasteners, 40 per cent fewer workstations dock-to-dock in the plant and a 15 per cent faster assembly time, Ford said. The traditional assembly line will be transformed into an 'assembly tree' at the Louisville plant, it said. Instead of one long conveyor, three sub-assembly lines will operate simultaneously and then join together, it said.
'Nobody wants to see another good college try by a Detroit automaker to make an affordable vehicle that ends up with idled plants, layoffs and uncertainty,' Farley said in the release. 'So, this has to be a good business. From Day 1, we knew there was no incremental path to success. ... We reinvented the moving assembly line.'
Other specifications for the midsize electric truck - including its reveal date, starting price, EPA-estimated battery range, battery sizes and charge times - will be announced later, the company said. Ford revealed in its release that the truck will have a targeted starting price of about USD 30,000.
Ford said its investment in the Louisville plant will secure 2,200 hourly jobs.
Kentucky Gov Andy Beshear said Monday that the automaker's plans for the Louisville plant will strengthen a more than century-old partnership between Ford and the Bluegrass State.
'This announcement not only represents one of the largest investments on record in our state, it also boosts Kentucky's position at the centre of EV-related innovation and solidifies Louisville Assembly Plant as an important part of Ford's future,' Beshear said.
Ford said its combined investment of about USD 5 billion at the Kentucky assembly plant and Michigan battery plant is expected to create or secure nearly 4,000 direct jobs between the two plants while strengthening the domestic supply chain with dozens of new US-based suppliers.
Ford previously forecast weaker earnings growth for this year and further losses in its electric vehicles business as it works to control costs. Model e, Ford's electric vehicle business, posted a full-year loss of USD 5.08 billion for 2024 as revenue fell 35 per cent to USD 3.9 billion.
Ford's new EV strategy comes as Chinese automakers are quickly expanding across the globe, offering relatively affordable electric vehicles.
'We're not in a race to build the most electric cars,' Farley told the AP when asked about competition from China. 'We're in a race to have a sustainable electric business that's profitable, that customers love.
'And this new vehicle built in Louisville, Kentucky, is going to be a much better solution to anything that anyone can buy from China,' he added. (AP)