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Ford F recently announced the decision to establish a new global battery center of excellence — Ford Ion Park — in Southeast Michigan. As the auto biggie scales up production of electric vehicles (EVs) globally, this newly-created battery center will help the company accelerate the research and development (R&D) of battery and battery cell technology as well as equip it to for future battery manufacturing.
The Ford Ion Park team is already underway, with the company putting together a team of 150 experts to work through the entirety of the battery supply chain. The team will be led by Anand Sankaran as its new director, who has years of experience and expertise in the electrification space.
Additionally, the automaker plans to invest $185 million for opening a collaborative learning lab in Southeast Michigan. The lab is focused on developing and manufacturing lithium ion and battery cells and arrays and testing manufacturing methods, while the team works on integrating all aspects of the value chain.
Further, Ford’s new Battery Benchmarking and Test Laboratory in Allen Park, MI, which opened last year, will support the Ford Ion Park development work by quickly testing and identifying the right battery cells to be integrated in Ford’s expanding EV fleet.
Ford’s Electrification Plans
Amid the heightening climate-change concerns and government regulations on carbon emissions, investors are intrigued by automakers providing green transportation solutions.
Amid such transforming face of the auto industry, Ford, earlier this year, committed to invest at least $22 billion through 2025 to deliver EVs globally by capitalizing on its strength and starting with EV versions of the company’s most popular models.
In North America, the Ford Mustang Mach-E has already gained popularity. Also, the all-electric Ford Transit is set to hit the road late this year and the all-electric F-150 is scheduled for a mid-2022 launch.
In Europe, Ford is transiting to an all-electric line-up by 2030. The auto giant also broke ground on its $1-billion Ford Cologne Electrification Center in Germany. This plant will build a new all-electric vehicle in 2023 and could build a second EV thereafter. In China, Ford plans to produce the Mustang Mach-E for the domestic market later this year.
With the latest announcement, Ford is following the footsteps of rivals like Tesla TSLA, General Motors GM and Volkswagen VWAGY, all of which are manufacturing batteries in-house to reduce costs and scale up production around the world with speed and quality.
Ford recently confirmed plans of investing $300 million to build a new light commercial vehicle in 2023 at its Craiova Assembly Plant in Romania. An all-electric version is slated to debut in 2024, being the first all-electric Ford volume vehicle to be developed in Romania.
Ford’s total capital outlay in its Romanian manufacturing operations, including the latest investment announcement, is approximately $2 billion since acquiring the Craiova facility in 2008.
Adding an all-electric version in 2024 will make the facility at Craiova the third facility in Europe to build an all-electric vehicle, following Ford Cologne Electrified Vehicle Center in Germany and Ford Otosan’s Kocaeli plant in Turkey. This investment demonstrates Ford’s accelerated commitment to providing commercial vehicle customers with a zero-emission future in Europe.
Ford currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, shares of Ford have appreciated 42% year to date compared with the industry’s growth of 9.4%.
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