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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Ford Motor Company (NYSE:F) (Dearborn, Michigan) and its electric vehicle (EV) battery supplier, SK Innovation (Seoul, South Korea), announced this week a plan to invest $11.4 billion to construct three EV battery-manufacturing sites and one vehicle-assembly factory in the Southeast. A Ford official said it was the company's largest capital project in the company's history.
The announcement obviously is big news, but the EV market faces some major hurdles before it can become a real force in the automotive world, says David Pickering, Industrial Info's vice president of research for the Industrial Manufacturing Industry.
Under the Ford/SK Innovation plan, Central Kentucky would see the construction of two EV battery-manufacturing plants, together valued at about $5.8 billion.
Ford and SK also plan to build an integrated battery-manufacturing site and EV assembly plant in Western Tennessee, near Memphis, at a cost of about $5.64 billion. All told, the facilities would employ as many as 11,000 people when they begin operating in the middle of this decade. Once operational, the vehicle-assembly plant will be capable of producing up to 1 million vehicles per year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for related project reports.
Ford plans to invest $7 billion, while SK would invest about $4.4 billion.
With these moves, Ford is hoping to capitalize on future demand for EVs, while catapulting itself to the top of the EV automaker heap. One of its traditional rivals, General Motors Company (NYSE:GM) (Detroit, Michigan), has said it will stop making vehicles with internal combustion engines by 2035. Other competitors, including Daimler AG (Stuttgart, Germany) (makers of Mercedes Benz vehicles), Volkswagen AG (Lower Saxony, Germany) and Bayerische Motoren Werke AG (Munich, Germany) are investing billions of dollars in EV manufacturing. Tesla (NASDAQ:TSLA) (Palo Alto, California), of course, is the global EV leader and is the most valuable car company in the world, with a market capitalization of nearly $800 billion--more than 10 times the market value of Ford.
The transportation sector emits nearly 30% of greenhouse gases in the U.S., making it the largest single sector contributing to global climate change, according to the U.S. Environmental Protection Agency (EPA) (Washington, D.C.). The Biden administration is seeking to rapidly decarbonize the domestic economy as a way to limit future increases of heat-trapping greenhouse gases.
"This is big news, and from a jobs standpoint, spectacular news for Kentucky and Tennessee," said Industrial Info's Pickering.
Pickering, who describes himself as an "EV realist," said he is not yet sold on the value proposition of electric transportation. "Range anxiety is still a big thing," he said in an interview. "There are only about 42,000 EV charging stations in the U.S., about one-quarter of the number of gasoline stations, and the EV-charging network that does exist is concentrated on the East and West coasts, and the interstate highways that connect the coasts."
"If you're located in the heartland, when it comes to EVs, you're out of luck for now," he said. "And if you live in rural America, you're also out of luck."
Beyond the need to build a more robust EV-charging network, Pickering said most U.S. consumers are "apathetic" about EVs. "You have a core group of enthusiasts, but beyond that, the average consumer is mostly indifferent to electric transportation." That, obviously, needs to change if transportation is going to be electrified.
"We're still early in the game, of course, but I think it is fair to say that the marketing and buzz has gotten ahead of the reality when it comes to EVs," Pickering said. "I think we'll get to an EV future, but it will take 10 to 15 years."
The acid test for EVs, he said, is whether they can capture the pickup truck market, which accounts for about 40% of all new vehicles sold each year. "Americans love their pickup trucks, and if an EV pickup truck is not a durable workhorse, you can forget about electric transportation."
Pickering stressed that he was not opposed to electric transportation, but the challenges--including creating a completely new and separate supply chain--should not be underestimated. "You're going to need an astronomical number of batteries, and right now their life is about four years. I'm sure there will continue to be advances in battery technology, but we're not there yet."
Finally, the IIR analyst said, "Some 'green' solutions are as bad for the environment as the traditional hydrocarbon-based ones. Right now, you can't recycle EV batteries, solar panels and wind turbine blades, so all that will go to the landfill when they reach the end of their useful lives. I'm not saying we should not be pursuing 'greener' solutions, but we need to understand the life-cycle costs and environmental impacts. No energy source is without its impact on the environment."
In August, President Joe Biden announced an executive order setting a voluntary target for half of all cars sold in the U.S. to be battery-electric, plug-in hybrid or hydrogen fuel cell-powered by 2030. Under the latest version of the infrastructure bill in Congress, about $7.5 billion is earmarked for EV-charging infrastructure, a far cry from the $174 billion that Biden had called for to make the EV market take off. The future of the infrastructure bill is uncertain in these politically charged times.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The announcement obviously is big news, but the EV market faces some major hurdles before it can become a real force in the automotive world, says David Pickering, Industrial Info's vice president of research for the Industrial Manufacturing Industry.
Under the Ford/SK Innovation plan, Central Kentucky would see the construction of two EV battery-manufacturing plants, together valued at about $5.8 billion.
Ford and SK also plan to build an integrated battery-manufacturing site and EV assembly plant in Western Tennessee, near Memphis, at a cost of about $5.64 billion. All told, the facilities would employ as many as 11,000 people when they begin operating in the middle of this decade. Once operational, the vehicle-assembly plant will be capable of producing up to 1 million vehicles per year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Industrial Manufacturing Project Database can click here for related project reports.
Ford plans to invest $7 billion, while SK would invest about $4.4 billion.
With these moves, Ford is hoping to capitalize on future demand for EVs, while catapulting itself to the top of the EV automaker heap. One of its traditional rivals, General Motors Company (NYSE:GM) (Detroit, Michigan), has said it will stop making vehicles with internal combustion engines by 2035. Other competitors, including Daimler AG (Stuttgart, Germany) (makers of Mercedes Benz vehicles), Volkswagen AG (Lower Saxony, Germany) and Bayerische Motoren Werke AG (Munich, Germany) are investing billions of dollars in EV manufacturing. Tesla (NASDAQ:TSLA) (Palo Alto, California), of course, is the global EV leader and is the most valuable car company in the world, with a market capitalization of nearly $800 billion--more than 10 times the market value of Ford.
The transportation sector emits nearly 30% of greenhouse gases in the U.S., making it the largest single sector contributing to global climate change, according to the U.S. Environmental Protection Agency (EPA) (Washington, D.C.). The Biden administration is seeking to rapidly decarbonize the domestic economy as a way to limit future increases of heat-trapping greenhouse gases.
"This is big news, and from a jobs standpoint, spectacular news for Kentucky and Tennessee," said Industrial Info's Pickering.
Pickering, who describes himself as an "EV realist," said he is not yet sold on the value proposition of electric transportation. "Range anxiety is still a big thing," he said in an interview. "There are only about 42,000 EV charging stations in the U.S., about one-quarter of the number of gasoline stations, and the EV-charging network that does exist is concentrated on the East and West coasts, and the interstate highways that connect the coasts."
"If you're located in the heartland, when it comes to EVs, you're out of luck for now," he said. "And if you live in rural America, you're also out of luck."
Beyond the need to build a more robust EV-charging network, Pickering said most U.S. consumers are "apathetic" about EVs. "You have a core group of enthusiasts, but beyond that, the average consumer is mostly indifferent to electric transportation." That, obviously, needs to change if transportation is going to be electrified.
"We're still early in the game, of course, but I think it is fair to say that the marketing and buzz has gotten ahead of the reality when it comes to EVs," Pickering said. "I think we'll get to an EV future, but it will take 10 to 15 years."
The acid test for EVs, he said, is whether they can capture the pickup truck market, which accounts for about 40% of all new vehicles sold each year. "Americans love their pickup trucks, and if an EV pickup truck is not a durable workhorse, you can forget about electric transportation."
Pickering stressed that he was not opposed to electric transportation, but the challenges--including creating a completely new and separate supply chain--should not be underestimated. "You're going to need an astronomical number of batteries, and right now their life is about four years. I'm sure there will continue to be advances in battery technology, but we're not there yet."
Finally, the IIR analyst said, "Some 'green' solutions are as bad for the environment as the traditional hydrocarbon-based ones. Right now, you can't recycle EV batteries, solar panels and wind turbine blades, so all that will go to the landfill when they reach the end of their useful lives. I'm not saying we should not be pursuing 'greener' solutions, but we need to understand the life-cycle costs and environmental impacts. No energy source is without its impact on the environment."
In August, President Joe Biden announced an executive order setting a voluntary target for half of all cars sold in the U.S. to be battery-electric, plug-in hybrid or hydrogen fuel cell-powered by 2030. Under the latest version of the infrastructure bill in Congress, about $7.5 billion is earmarked for EV-charging infrastructure, a far cry from the $174 billion that Biden had called for to make the EV market take off. The future of the infrastructure bill is uncertain in these politically charged times.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
