A few months ago, former Ford CEO Jim Hackett said there was no advantage to Ford building its own batteries for its electric vehicles. Now, the new CEO Jim Farley has reversed the company’s position, saying on Friday that making its own EVs would actually be a pretty solid way for Ford to create more jobs.
Farley spoke at the Reuters Automotive Summit teleconference on Friday, where he commented on the growth of the EV market and the very viable concerns that come along with it:
We are discussing (battery) cell manufacturing. I think that’s natural as [EV] volume grows.”
The fact of the matter is electric vehicles have 40 percent less parts, and that means they’re a lot easier to put together. We do have to solve for the reality that when electrification becomes 25 percent or 50 percent of our industry in the coming years, what are we going to do about the jobs? One of the obvious choices is going into cell production.
The fact that an EV is less part-heavy than its internal combustion engined counterparts has been a big concern for auto workers watching the rising tide of electrification. It’s been really difficult for most companies to reconcile the disparity between wanting to go electric and wanting to create more jobs.
Creating an in-house battery will be difficult, and from Hackett’s point of view, wouldn’t really make sense for Ford if there are viable, well-made battery cells out there that require very little effort to install in a car. And from a business perspective, he wasn’t wrong. If you’re looking specifically at how you can cut down manpower in order to make a larger profit, outsourcing a battery cell isn’t a big deal.
After all, GM and Tesla are two companies that have invested billions in creating their own battery cell manufacturing plants, which is... a lot of money.
Farley seems to be far more concerned about the human element of it, which is probably a good thing, especially in this economic climate. People need jobs, and Ford building its own battery cells would open up a whole new mode of employment.
Upcoming electric Ford models will, of course, host battery cells from outside suppliers.