Ford Considers Building Its Own EV Batteries

Ford has been undergoing some changes in the last few months with CEO Jim Hackett retiring and being replaced by a new CEO with Jim Farley taking the position. It wasn't very long ago that former CEO Hackett said that Ford wouldn't build its own batteries for electric vehicles. Hackett had said in July that there was no advantage to the automaker building its own battery cells.

Farley is already walking Hackett's statements back. Recently Farley said EV's have 40 percent fewer parts meaning they're easier to build. He noted that Ford has to prepare for the reality that when electrification becomes 25 or 50 percent of the industry in the coming years, what will the company do about jobs. Farley notes that building its own battery cells is the obvious answer to that problem.

Ford and other major automakers can't simply do away with jobs as their workforce is highly unionized, and contracts won't allow wholesale replacement or elimination of many jobs. Other automakers competing with Ford in the electric vehicle market certainly see manufacturing their own batteries as important. Both GM and Tesla have invested billions into their own battery manufacturing plants supplementing production from outside suppliers.

Ford isn't heavy into the electric vehicle market at this time, but the Mustang Mach-E certainly has the potential to be a big seller. The batteries for that EV are currently coming from outside suppliers. Some analysts within the electric vehicle market have concerns about whether or not the battery industry can keep up with the demand for electrified vehicles through 2025 and beyond.

Ford has made no grand announcements of how many electric vehicles it intends to sell by 2025, but it's competition certainly has. Both GM and Hyundai have said they intend to build and sell a million electric vehicles each year by 2025. Ford may have to build its own batteries simply to have access to them.