Ford to Phase Out Fossil-Fueled Vehicles by 2030

Automakers see a future full of electric cars and trucks, raising the demand for batteries and charging stations.

February 18, 2021

DEARBORN, Mich.—Ford Motor Co. has announced plans to phase out vehicles it sells in Europe that are powered by fossil fuels. By 2026, the company will offer only electric and plug-in hybrid models there, and by 2030 all of Ford’s passenger cars will run solely on batteries in Europe, the New York Times reports, and Ford isn’t the only automaker switching over.

Last week, U.K. automaker Jaguar Land Rover said its Jaguar luxury brand will be all-electric by 2025. The company expects all Jaguars and 60% of Land Rovers sold to be zero-emissions vehicles by 2030, the year the U.K. is slated to ban the sale of new internal combustion engine vehicles. Last month, General Motors said it plans to produce electric vehicles exclusively by 2035. Volkswagen says it will manufacture a million EVs in 2023 and 1.5 million in 2025.

Ford’s plan is part of a bid to generate steady profits in Europe, where the company has struggled for several years, and to meet increasingly strict European emissions standards. “We are going all in on electric vehicles,” said Stuart Rowley, president, Ford of Europe.

Automakers are moving more rapidly to produce EVs for the European market than they are for the U.S. Last year, the European Union began imposing penalties on car makers that don’t adhere to limits on carbon dioxide emissions, which influenced carmakers to speed up EV production efforts.

Ford is a relatively minor player in Europe, with 5% of the passenger car market, but it plans to spend $1 billion to overhaul its main European plant in Germany to produce EVs. The first new model is scheduled for production in 2023, Ford said, and will use electric vehicle technology developed by Volkswagen.

Ford is selling its battery-powered Mustang Mach-E in Europe, and the company’s delivery vans and commercial vehicles made for Europe will be electric or plug-in hybrids by 2024. By 2030, two-thirds of the commercial vehicles Ford sells in Europe will be battery powered.

All of these predictions about the future of EVs means automakers will need a lot of batteries, according to the New York Times. Already, demand for this indispensable component outstrips supply, and established companies and start-ups are racing to create the technology and factories needed to churn out batteries and get millions of EVs on the road.

Wood Mackenzie, an energy research and consulting firm, estimates that EVs will make up 18% of all new car sales by 2030, which would increase the demand for batteries by about eight times what current factories can produce. And some analysts expect EV sales to grow much faster.

Today, battery manufacturing is dominated by companies like Tesla, Panasonic, LG Chem, BYD China and SK Innovation—nearly all of them based in China, Japan or South Korea. But new players are getting into the game.

QuantumScape, a Silicon Valley start-up whose investors include Volkswagen and Bill Gates, is working on a technology that could make batteries cheaper and quicker to recharge. While it has had no substantial sales, stock market investors are valuing the company higher than the French car maker Renault.

China and the EU are injecting government funds into battery technology. The EU is subsidizing battery production to avoid becoming dependent on Asian suppliers and to preserve auto industry jobs. The United States is also expected to promote the industry under President Biden’s focus on climate change and his support of EVs. Several battery factories are in the planning or construction phase in the United States, including a GM factory being built in Ohio. But analysts say federal incentives for electric car and battery production will be crucial to creating a thriving U.S. industry.

The first priority for the industry is to make batteries cheaper. Today, batteries for a midsize electric car cost about $15,000, or roughly double the price they need to be for electric cars to achieve mass acceptance, industry watchers say. Long term, the industry holy grail is solid state batteries, which would be less heavy, more stable, less prone to overheating and allow for faster charging. Most people in the industry don’t expect solid state batteries to be widely available until around 2030.

Mass producing batteries is “the hardest thing in the world,” said Elon Musk, CEO, Tesla. “Prototypes are easy. Scaling production is very hard.”

For more information on Electric Vehicle Infrastructure, be sure to check out this Youtube video by the Fuels Institute and NACS.