By on February 25, 2021

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On Wednesday, Ford CEO Jim Farley told attendees of the Wolfe Research Auto Conference that the United States needs to start building batteries for the industry’s planned deluge of electric vehicles now that semiconductor shortages have revealed the dangers of needing to source essential components from the other side of the planet.

Farley is likely correct in stating that America really should be able to supply itself, and not just in regard to semiconductor chips. Pandemic-related lockdowns crippled countless industries by upsetting the balance of supply lines. Halfway through 2020, farmers were dumping millions of gallons of milk per day and plowing up fields of eatable vegetables as restaurants were shutdown; factories were idled as part shortages became commonplace; cleaning supplies and disinfectants became impossible to find.

But it’s hard to translate that into sympathy for Ford because, while all of the above was happening, the automaker’s leadership was saying that there was no good reason to manufacture its own batteries.

“The [battery] supply chain has ramped up since Elon [Musk] built his Gigafactory, and so there’s plenty there that does not warrant us to migrate our capital into owning our own factory,” former Ford CEO Jim Hackett said during the company’s second-quarter earnings call, held in August. “There’s no advantage in the ownership in terms of cost or sourcing.”

But that was before South Korea’s SK Innovation lost a courtroom battle with rival LG Chem over intellectual property rights. The International Trade Commission decision bans SK Innovation from importing batteries to the U.S. for ten years, providing a four-year grace period where it can legally import components. Ford has an agreement with the supplier that has it furnishing batteries for the plug-in F-150 that’s coming in 2022.

“We need to bring large-scale battery production to the U.S., and we’ll be talking to the government about [that],” Farley was quoted by Bloomberg as saying during the Wolfe Research Auto Conference. “We can’t go through what we’re doing with chips right now with Taiwan. It’s just too important.”

Leaning on Taiwan to supply an industry that’s cramming chips into every inch of its products during an uncertain period could have also been avoided if the United States maintained. But national self-reliance never seemed to be on the radar of anybody important, not when the work could be done more cheaply elsewhere and components could be shipped in by boat.

President Joe Biden spent part of his week meeting with lawmakers to discuss how to secure supplies of electric vehicle batteries, semiconductors, rare earth metals, and pharmaceuticals — all of which have been in short supply since the pandemic disrupted global trade.

Meanwhile, Ford’s current CEO used his time at the conference to reiterate the corporate strategy. The manufacturer wants to develop new, more affordable EV platforms for use in China and Europe while preparing the United States for its first run of all-electric pickups. It also plans on turning digital services (especially in regard to fleet management) into a more reliable revenue source as it continues to make its vehicles increasingly connected. This opens it up to marketing opportunities and sourcing customer data that have proven highly lucrative, albeit slightly unsavory from our privacy-biased perspective.

Regardless, it sounds like the automaker is going to need a massive amount of semiconductors and batteries that it cannot currently produce for itself. But it’s not going to be fighting for those components in a vacuum, as several of the world’s largest automakers have found themselves in a similar situation where they’ve promised to pivot toward electric vehicles and mobility without having a way of sourcing the necessary parts.

[Image: Ford Motor Co.]

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19 Comments on “Woulda, Coulda, Shoulda: Ford CEO Calls for U.S. Battery Production...”


  • avatar
    SCE to AUX

    Very appropriate headline.

    According to Tesla: The Nevada Gigafactory broke ground in June 2014, and Tesla currently produces more batteries in terms of kWh than all other carmakers combined.

    VW is building its own battery plants to support complete electrification of its fleet.

    Now the geniuses at Ford think maybe they should do something, someday. Guess what Ford: You’re 7 years behind, and your first move is to go talk to the government? While you’re throwing billions at “mobility” with no ROI, you’re spending nothing on real, tangible commitment to EVs that you say are the future. Supply chain has always been key to this effort.

    This chat with the US government will certainly be with hat-in-hand. Other than the usual state and local corporate welfare, I guess Ford is going to ask the US Government to lend a hand, too.

    Hydrogen production and charging networks have been the same way: relying on someone else to foot the bill results in a haphazard, low quality, and slow rollout.

    To their credit, at least Tesla recognized early on that if they wanted to get anything done, they’d have to do it themselves. Now they lead the EV industry and everyone else is considering cheap shortcuts to try and achieve the same thing.

    • 0 avatar
      Matt Posky

      Mark Fields must be rolling in his grave.

    • 0 avatar
      Rick Astley

      SCE to AUX,

      While I admit to bias against suckling on the Musky teet, some of your statements are hilarious.

      – Gigafactory: I’ll make a wild guess that if Ford built its own battery assembly factory it would have to comply with worker safety regulations and wouldn’t try to determine how much of a lost limb is required to report a workplace injury. There are plenty of stories coming out of that Gigafactory which paint the workplace, and nearby living conditions, as anything but the utopia of safe manufacturing on US soil.

      – Ford’s first move is to talk to the government: Musk has a long and tired history of his first move being transferring all risk and obligation onto the taxpayer, especially if it’s a risky proposition that will personally benefit him should the project fail or not. You vilify Ford yet place Sir John DeLorean, I mean Elton Musk on the pedestal of greatness….. None of his projects are born on his own back, they were all placed on the taxpayer. (Austin factory included)

      -Hat in hand: Again, you vilify one company yet praise the other for the same action.

      -Hydrogen networks: I was entirely unaware that Tesla’s supercharger network was paid entirely by Tesla!!!!!! Then I researched it and, well, another colander argument on behalf of Tesla.

      – To Tesla’s credit, they expanded the playbook DeLorean had established with DMC because Tesla had a product that only the wealthy would have access to. And politicians love adopting things which make wealthy constituents happy. Nobody else has switched their methodology of production to a taxpayer based one. THAT is the difference. Unless you think selling vaporware CAFE credits, federal tax incentives, state tax writeoffs and outsourcing risk and liability are the strongest merits of Tesla?

      • 0 avatar
        FreedMike

        1) If Gigafactory is violating workplace safety regs, then someone will deal with that. That’s why we have regs.

        2) Elon Musk = John DeLorean? LOL…no, and I’m not talking blow, though I have no doubt Elon has railed a few lines in his day. Tesla actually makes stuff people want. If DeLorean’s stuff had sold, then he wouldn’t have become an (very) amateur Tony Montana.

        3) Teslas are bought only by “the wealthy”? Hardly. Their best sellers – the Model 3 and Y – sell anywhere between $40,000 and $60,000. I’m sure plenty of truly wealthy people buy them, but I’d say the target market here is “moderately affluent” buyers, not the super rich. Put differently: that’s about the same range that most pickup trucks sell in these days; are pickup buyers “wealthy”?

        4) Debate the government’s role in Tesla’s success as much as you want, but I think two things are clear: a) Tesla is alive because consumers liked its’ stuff, and b) in the long run, arrangements like the one you’re talking about tend to pay off for taxpayers if the company is successful.

      • 0 avatar
        SCE to AUX

        Gigafactory safety: Strange how YOU know of these egregious violations, but OHSA doesn’t. Maybe you should call them.

        Hat-in-hand: You ignored my caveat phrase “Other than the usual state and local corporate welfare”. I do not support corporate welfare, but it is a staple of doing big business in the US. Show me a mfr who doesn’t play this game, and I’ll show you a politician who is willing to let jobs go somewhere else. We’ll both have nothing to show.

        But Ford – now that a Democrat is in office – probably wants to get a handout from Joe.

        Supercharger network: So, if Tesla didn’t fund it, then who did?

        Taxpayers: You’ve repeated this claim numerous times, that Tesla is built on the backs of taxpayers. But you never offer evidence. The Federal tax subsidy is open to all EV mfrs, except now Tesla and GM have exhausted those credits.

        Carbon credits: Tesla didn’t invent that scam system. Anyone with a ‘greener’ portfolio can benefit.

        Outsourcing risk and liability: Do you mean like expecting suppliers to fulfill contractual obligations?

  • avatar
    here4aSammich

    If only we had a president who believed in self-sufficiency and making products here.

  • avatar
    dwford

    Farley talks like he just got to Ford yesterday.

  • avatar
    DenverMike

    Ford is in the assembly business, 3rd world as much as possible.

    The suppliers do all the heavy lifting. For little profit and offen don’t get paid or not on time.

    By the time Ford can figure out batteries, they’ll be obsolete.

    • 0 avatar
      redapple

      >Denver:

      Ford is in the assembly business, 3rd world as much as possible.

      The suppliers do all the heavy lifting. For little profit and offen don’t get paid or not on time.

      LOTS OF TRUTH IN THIS

  • avatar

    Tesla makes everything in house and that’s why it will dominate.

  • avatar
    Master Baiter

    “But national self-reliance never seemed to be on the radar of anybody important,…”

    Nope, no politician has ever sounded the alarm about reliance on China. Never.

  • avatar
    Master Baiter

    Ford doesn’t need its own battery factory, but absent that, they would need to cut very large checks to battery suppliers for production lines and assurance of supply agreements. There’s obviously risk in doing that because demand for EVs is uncertain.

    Musk is not afraid to take big risks, so he will either win big, or lose big. So far he’s winning.

  • avatar
    phreshone

    Like the EPA is going to allow a real competitive battery factory… Hell, they closed down the one lead smelter in the USA about 8 years ago

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