Ford (F) and battery partner SK Innovation will invest $11.4 billion to build new EV and battery plants, as automakers from General Motors (GM) to Volkswagen (VWAGY) move to copy Tesla (TSLA) by bringing batteries in-house. Ford stock rose.
The new “mega-sites” will produce electric versions of Ford’s top-selling, F-Series trucks, according to a release late Monday. They also will make batteries for future Ford and Lincoln electric vehicles.
A $5.6 billion campus in Stanton, Tenn., called Blue Oval City, aims to be a vertically integrated site for manufacturing both electric vehicles (EVs) and EV batteries. In central Kentucky, a $5.8 billion campus dedicated to batteries, called BlueOvalSK Battery Park, will include two assembly plants.
Production is set to begin in 2025. Ford and South Korea’s SK launched a battery joint venture in May.
Ford’s pouring $30 billion to develop EVs by 2025. Ford’s share of the investment in Tennessee and Kentucky is $7 billion.
“This is our moment — our biggest investment ever — to help build a better future for America,” said Ford CEO Jim Farley.
On Oct. 7, General Motors will discuss its own EV shift further at a highly anticipated investor event.
Ford Stock Rises On EV Investment
Shares of Ford rose 2.3% on the stock market today, extending a four-session rally above the 50-day line. Ford stock is at its highest level since late July as it works on a 16.55 buy point from a cup base, according to MarketSmith chart analysis. On Tuesday, GM rose 0.5%, Volkswagen fell 1.3% and Tesla slid 1%.
By 2030, Ford expects 40%-50% of its global volume to be fully electric cars.
In the U.S., GM and its battery partner LG Chem are partnering on battery cell plants. In Europe, Volkswagen and Swedish battery maker Northvolt are teaming up on EV batteries.
Tesla set the trend by signing a three-year deal with Japan’s Panasonic tied to the manufacture and supply of EV battery cells. But Tesla, the global leader in premium EVs, has signaled it could make its own batteries to vertically integrate manufacturing, akin to China’s BYD (BYDDF).
Ford accelerated its shift to electric vehicles this year, after years of caution. Gas and diesel trucks underpin Ford’s profits, so the EV pivot entails both risk and potential rewards.
On Monday, Ford touted “strong demand” for future new EVs including the F-150 Lightning, its first all-electric pickup truck. It recently said that reservations for the Lightning have now reached 150,000, up from 100,000 in June.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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