Ford Ups the Ante on EVs

Ford is investing another $450 million in electric vehicle development and facility retooling, bringing its total investment in this area to a cool $1 billion.

The latest monetary infusion, a part of its “Electrification Strategy,” paves the way for the Dearborn, Mich. carmaker to engineer, produce and launch new electrified vehicles, battery systems and hybrid transaxles, while creating up to 1,000 new jobs in the state.

Ford will build what it calls a next-generation hybrid vehicle and a plug-in hybrid vehicle at the Michigan Assembly Plant beginning in 2012, in addition to producing the new Ford Focus and Focus Electric at the same plant in 2010 and 2011, respectively.

In addition, the company announced it will design advanced lithium-ion battery systems for the next generation hybrid in Michigan and move production of battery packs from Mexico to Michigan.

This comes in addition to Ford’s previously announced plans to invest $550 million to transform Michigan Assembly Plant from a SUV factory to a modern car plant to build the new Focus starting this year and the Focus Electric pure battery electric vehicle in 2011.

“This investment underscores how serious we are about delivering a range of electrified vehicles to customers – including hybrids, plug-in hybrids and pure electric vehicles,” said Bill Ford, the company’s executive chairman, in a press release. “Our industry is at the intersection of three critical global issues – the economy, energy and the environment. The winning companies will be those that address these issues with vehicles that are also exciting and fun to drive, without compromises.”

“Partnering with the state of Michigan has been critical to the acceleration of the electric vehicle plan,” Ford said. On Monday, the Michigan Economic Growth Authority board approved a package of incentives and tax credits totaling $188 million. The package includes job credits, brownfield site credits and battery pack assembly credits recently approved by the Michigan legislature.

As part of its electrification plan, Ford last year doubled the number and volume of its hybrid electric vehicles to include the Ford Fusion and Escape hybrids, and the Mercury Milan and Mariner hybrids.

Ford plans to bring the following electrified vehicles to market over the next three years:

  • Ford Transit Connect battery electric vehicle commercial van in 2010
  • Ford Focus Electric passenger car in 2011
  • Next-generation hybrid based on C-car platform in 2012
  • Plug-in hybrid based on C-car platform in 2012

Ford says a key component driving development of its EVs is lithium-ion battery system technology: the design, development and assembly of which Ford will bring in-house for its new hybrid vehicles.

“Battery system design and development will be a core competency for Ford in the 21st century,” said Nancy Gioia, Ford’s director of Global Electrification. “Building in-house expertise and leveraging our global scale is critical to developing electrified vehicles that are affordable, connected and fun to drive.”

The plan to bring battery system design and development for the next generation hybrid in-house while eventually moving production from Mexico to a not yet identified site in Michigan is potentially a significant decision. Is it a sign, albeit aided by state tax incentives and credits, that at least one outsourcing trend is in reverse?

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