Ford and South Korean battery manufacturer SK Innovation will spend a combined $11.4 billion to build several new factories in the Tennessee and Kentucky focused on the development and production of electric vehicles and the batteries that power them.
The new facilities represent the first new plants built by Ford, completely from scratch, in over 50 years. The Tennessee plant will be a “mega campus” that houses a vehicle-production facility for Ford’s F-series pickup trucks and a battery assembly division, while the twin factories in Kentucky will manufacture lithium-ion batteries.
The facilities won’t come online until 2025, but Ford CEO Jim Farley says the investment signals the seriousness with which the company is taking its commitment to EVs. The new campus in Stanton, Tennessee, for example, will cover nine square miles and represents the largest facility ever built in the company’s 118-year history, Farley said.
“This is a new Ford,” Farley told The Verge. “This is show, not tell time.”
Ford, like the rest of the auto industry, is scrambling to shift its attention to EVs, even as they only represent a small fraction of vehicles sold every year. The announcement comes as Congress is debating whether to approve an infrastructure deal that would fund the construction of hundreds of thousands of new charging stations, as well as new consumer incentives for EV sales. It also comes as the auto industry grapples with new proposals banning the sale of gas cars in foreign markets and some US states like California.
Farley made the analogy that electric cars are now at a similar place as smartphones in 2007. “This story … is not about propulsion,” Farley said. “This story is about digital vehicles with embedded systems, and a customer experience led through software that gets better every day, and changes the definition of a car from something that gets you from point A to point B, to something that enables your full life.”
The new facilities represent a shift in Ford’s approach to EV manufacturing. It’s a more financially risky move with potentially lucrative rewards in the future if the company can successfully supplement production from its own suppliers.
Ford currently sources its batteries from SK Innovation, which recently lost a trade secret dispute with rival LG Chem that could hinder its imports to the US. (The companies recently reached an agreement that could avert a possible import ban.) By making its own batteries in the US, Ford can avoid some of the conflicts that arise from sourcing batteries overseas.