Ford could produce its own EV battery cells by 2025, executive says

People go to Ford’s all-electric SUV Mustang Mach-E on the 2019 Los Angeles Auto Show in Los Angeles, the United States, Nov. 22, 2019.

Xinhua by way of Getty Images

DETROIT – Ford Motor must be promoting sufficient electrical automobiles in North America to produce its own battery cells domestically by 2025, an executive with the automaker advised CNBC.

The timeline is essentially the most detailed Ford has given for EV battery manufacturing, which Wall Street is intently watching, and it is a reversal within the firm’s technique below former CEO Jim Hackett. Producing battery cells internally is predicted to be key for automakers to chop prices of EVs and safe sourcing for an expected surge in demand this decade.

“We don’t have to scale today to justify our own dedicated battery plant,” Hau Thai-Tang, Ford’s chief product platform and operations officer, stated in an interview Monday morning. “But by 2025, as we bring on the F-150, the E-Transit and another battery electric vehicle that we’ve announced, we’ll have enough volume in North America to justify our own plant.”

The precise timing of manufacturing hinges on the EV market, shopper demand in addition to R&D progress, in line with Ford spokeswoman Jennifer Flake. The firm, she stated, “could be in a position” to be producing its own EV cells by 2025.

Ford’s been cautiously including EVs to its lineup, launching its first new all-electric automobile — the Mustang Mach-E — within the U.S. on the finish of final yr. The firm expects to comply with it with an all-electric Ford Transit van later this yr and an EV model of the Ford F-150 pickup by mid-2022. The firm has not disclosed particulars of one other new EV talked about by Thai-Tang.

Thai-Tang’s feedback come after the corporate introduced Monday it will improve its funding in an EV battery start-up with hopes of beginning to combine the next-generation batteries, referred to as solid-state, into its EVs by the tip of this decade.

Thai-Tang stated a single battery cell facility could produce at this time’s lithium-ion batteries in addition to solid-state. The batteries may be lighter, with better power density that gives extra vary at a decrease price. But they’re presently extra pricey than lithium-ion batteries and early in improvement.

Ford final week introduced plans to take a position $185 million into a brand new battery lab as a step towards manufacturing its own battery cells for EVs, however not full manufacturing like Tesla has or like General Motors has introduced. Ford presently purchases cells from suppliers corresponding to South Korea-based SK Innovation.

The new lab, in addition to one other $100 million battery facility that opened final yr, is along with Ford’s plans to place $22 billion into vehicle electrification from 2016 by means of 2025.

Ford’s plan to fabricate battery cells has emerged below Ford CEO Jim Farley, who took over on Oct. 1. He modified the course set by his predecessor, Hackett, who had stated the automaker noticed “no advantage” in producing battery cells.

EVs represented solely about 2% of recent U.S. automobile registrations final yr, in line with IHS Markit. But the corporate expects that to extend to between 25% and 30% by 2030 and 45% and 50% by 2035, IHS stated.

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