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Ford can produce its own EV batteries by 2025, says the CEO

People attend the all-electric SUV of the Ford Mustang Mach-E at the 2019 Los Angeles Auto Show in Los Angeles, USA, November 22, 2019.

Xinhua through Getty images

DETROIT – Ford Motor needs to sell enough electric vehicles in North America to produce its own battery cells in the domestic market by 2025, the automaker̵

7;s chief executive told CNBC.

The schedule is the most detailed that Ford has given for the production of rechargeable batteries, which Wall Street is closely monitoring, and this is a reversal in the company’s strategy under former CEO Jim Hackett. Domestic battery cell production is expected to be key for carmakers to reduce the cost of electric vehicles and provide supply for the expected jump in demand over this decade.

“We don’t need to scale today to justify our own dedicated battery plant,” Howe Tai-Tang, Ford’s chief product officer and chief operating officer, said in an interview Monday morning. “But by 2025, when we introduce the F-150, E-Transit and other battery electric vehicles we’ve announced, we’ll have enough volume in North America to justify our own plant.”

The exact production schedule depends on the electric car market, consumer demand, and progress in research and development, according to Ford spokeswoman Jennifer Flake. The company, she said, “may be able” to produce its own EV cells by 2025.

Ford is carefully adding electric cars to its range, launching its first all-electric car, the Mustang Mach-E, in the United States late last year. The company expects to follow suit with an all-electric Ford Transit van later this year and an EV version of the Ford F-150 pickup by mid-2022. The company did not disclose details about another new EV mentioned by Thai-Tang.

Thai-Tang’s comments came after the company announced on Monday that it would increase its investment in launching EV batteries in hopes of starting to integrate next-generation batteries, known as SSDs, into its EVs by the end of this decade.

Thai-Tang said that a battery cell facility can produce today’s lithium-ion batteries as well as solid. Batteries can be lighter, with a higher energy density, which provides greater range at a lower cost. But at the moment they are more expensive than lithium-ion batteries and are in the early stages of development.

Last week, Ford announced plans to invest $ 185 million in a new battery lab as a step toward producing its own battery cells for electric vehicles, but not full production, as Tesla announced or as General Motors. Ford is currently buying cells from suppliers such as South Korean-based SK Innovation.

The new lab, as well as another $ 100 million battery facility, opened last year, is in addition to Ford’s plans to invest $ 22 billion in car electrification from 2016 to 2025.

Ford’s plan to produce battery cells came to Ford CEO Jim Farley, who took office on October 1. He changed the course set by his predecessor, Hackett, who said the carmaker did not see an “advantage” in battery cell production.

Electric vehicles accounted for only about 2% of new vehicles registered in the United States last year, according to IHS Markit. But the company expects this to increase to between 25% and 30% by 2030 and 45% and 50% by 2035, IHS said.

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