ALEXANDRIA, Va.—Ford is planning to spend up to $20 billion more on its electric vehicle (EV) initiatives, report Reuters. The company plans to spread out an investment of $10 to $20 billion over the next five years, and it includes converting some factories, including global sites, to produce EVs.
The plan is called Ford+, and the company wants investors to value it as a technology company, as Ford and other rivals try to compete with Tesla in the EV space. The increase in spending is being led by former Tesla executive Doug Field.
Reuters reports that Ford has considered breaking off a small part of its EV business to increase “value in an electric startup environment boosted by investor sentiment.”
"We're carrying out our ambitious Ford+ plan to transform the company and thrive in the new era of connected, electric vehicles," a company's spokesman said to Reuters.
Ford already pledged $30 billion towards its EV investments by 2030. It’s planning to build a new assembly plant and three battery factories.
Last week, General Motors said it is investing over $7 billion in four Michigan manufacturing sites to increase its battery cell and electric truck manufacturing capacity—GM’s largest investment announcement in its history. GM says it wants to become the EV market leader by 2025.
Stellantis, which owns Jeep, Ram and other auto brands, said this past week its Chrysler brand would go exclusively electric by 2028. Sony revealed it is entering the electric vehicle (EV) market by creating and selling its own EVs. Mercedes-Benz unveiled the EQXX, a new electric concept car that the automaker says will be able to travel 620 miles on a single charge, based on computer modeling.
The current leader in the EV space is Tesla, which sold about 352,500 vehicles in 2021 or about 72% of all battery-electric vehicles purchased. In comparison, GM sold about 25,000 last year, and Ford sold around 27,000 electric vehicles in 2021. Tesla also posted record profits of $5.5 billion last year on $53.8 billion of revenue. In 2020, the EV company posted $721 million in profit and $31.5 billion in sales in 2020—the first year Tesla posted a profit.
Tesla recently announced that it’s not rolling out any new vehicle models this year, and instead is focusing on increasing deliveries amid supply-chain disruptions. The company navigated last year’s global computer-chip shortage by utilizing in-house software engineering. However, Tesla was forced to run its factories below capacity due to supply chain issues.
Although there will soon be plenty of electric vehicles for consumers to choose from, but it’s convincing those consumers to buy them that is the next hurdle, though EV sales are gaining some ground. Sales rose 88% year-over-year in 2021, but they still only account for about 3.2% of the total U.S. car market, according to research firm Motor Intelligence.
Although EV sales may be rising, consumers are still leery over the U.S.’s premature charging infrastructure, as it continues to be a roadblock in EV adoption in the United States. Shortly after election, President Biden unveiled an electric car plan that said half of all new cars sold in the United States will be electric by 2030. But in order for that plan to become a reality, energy and auto experts say the U.S. needs at least five to 10 times its current amount of EV chargers to bring the plan to fruition.
Last year, the Biden Administration released details of its plan to build out an EV charging infrastructure using $7.5 billion in grant funds that were included in the bipartisan infrastructure law passed in November. Last Friday, NACS filed comments with the Federal Highway Administration on its upcoming guidelines for this alternative fueling infrastructure.