Ford’s road (F) to future popular and stock market success rests on a big gamble in the form of a gigantic factory near Memphis Tennessee.
The blue oval brand has set itself the ambition of producing 2 million electric vehicles globally per year by the end of 2026. In 2021, the group only manufactured 27,140 electric vehicles in the United States. This means that reaching 2 million units five years later is a huge challenge even when your name is Ford, a company that has been producing and selling vehicles around the world for several decades.
CEO Jim Farley is determined to achieve this ultra-ambitious goal. He promised Ford would spend $50 billion developing electric vehicles, which are expected to account for more than half of its sales by 2030.
The first step and one of the most important of this challenge is the construction of a giant production site housing a brand new factory for manufacturing vehicles and a factory developing the batteries that power them in Tennessee.
First All-New Assembly Plant Since 1969
This site, which Ford calls BlueOval City in the image of the Gigafactory of its great rival Tesla (TSLA) has nearly 6-square-mile mega campus.
Ford says it will create approximately 6,000 new jobs. The car manufacturer will mainly manufacture electric trucks there and develop, with its South Korean partner SK, batteries which will also be intended for vehicles of its premium brand Lincoln.
Vehicle production is expected to begin in 2025, the company, which presents itself as “America’s No. 2 electric vehicle brand,” said.
The cost of construction of this production site, which is supposed to bring the automotive group “closer” to its objective of 2 million vehicles per year by 2026, is estimated at $5.6 billion.
Ford announced on September 23 that it had started construction of the site, less than a year after the unveiling of the investments. The company added that its crews have already moved more than 4.6 million cubic yards of soil, enough to fill approximately 34,500 backyard swimming pools.
Nearly 370,000 tons of stone have been laid, which is the equivalent of the weight of more than 1,600 Statues of Liberty. More than 4,600 deep foundations installed, totaling the height of approximately 176 Eiffel Towers when put end to end, Ford detailed.
“We are building the future right here in West Tennessee,” said Eric Grubb, Ford’s director of new footprint construction. “This facility is the blueprint for Ford’s future manufacturing facilities and will enable Ford to help lead America’s shift to electric vehicles.”
BlueOval City is the company’s first all-new assembly plant since 1969.
Ford Is on the Rise
In 2021, GM (GM) sold just under 25,000 electric vehicles in the United States, but this figure could have been higher if the group run by CEO Mary Barra had not had to suspend production of the Chevy Bolt due to a problem related to the battery.
But it is not sure that GM will pass Ford in 2022. The commercial success of the F-150 Lightning, the electric version of the best-selling F-150 truck, since May will undoubtedly increase the Dearborn, Michigan-based company’s advantage.
Tesla, which does not give its sales figures in the United States, was the leader with a market share of 72% of the 487,560 solder EVs, according to official figures.
The early start of construction at the Tennessee production complex reflects Ford’s urgency to meet growing demand for electric vehicles. The automaker wants to be able to eliminate anything that might slow down those efforts.
On September 22, the company reorganized the leadership to better control the supply chain while the shortage of parts and the rise in the price of raw materials remained a major headache.
The firm has thus just temporarily extended the functions of its chief financial officer John Lawler. In addition to his current role, Lawler will now lead Ford’s global supply chain.
“Ford is transforming its global supply chain management capability to support efficient and reliable sourcing of components, internal development of key technologies and capabilities, and world-class cost and quality execution,” the company said in a press release.