Ford invests $1B in European EV future

Ford Motor Company Feb. 17 announced a US$1 billion investment to transform its century old German-based vehicle assembly facility in Cologne, one of the largest manufacturing centers and the home of Ford in Europe, into the American automaker's first electric vehicle facility there.

The news comes after Ford stated weeks earlier it was investing at least US$22 billion globally in electrification through 2025, which is nearly double its 2018 EV investment plan.

"Our announcement today to transform our Cologne facility, the home of our operations in Germany for 90 years, is one of the most significant Ford has made in over a generation," said Ford Europe President Stuart Rowley. "It underlines our commitment to Europe and a modern future with electric vehicles at the heart of our strategy for growth."

Ford also committed that by mid-2026, 100% of its passenger vehicle range in Europe will be zero-emissions capable, all-electric or plug-in hybrid, and will be completely all-electric by 2030.

This is driven by the successful growth of vehicle sales in Europe, which as of 2020, led Ford to its sixth consecutive year as the leading commercial vehicle sales brand in Europe.

"We successfully restructured Ford of Europe and returned to profitability in the fourth quarter of 2020. Now we are charging into an all-electric future in Europe with expressive new vehicles and a world-class connected customer experience," said Rowley. "We expect to continue our strong momentum this year in Europe and remain on track to deliver our goal of a six percent EBIT margin as part of Ford's plan to turnaround our global automotive operations."

Ford expects to have the first all-electric model designed specifically for European customers to roll out of the new Ford Cologne Electrification Center by 2023.

The company aims to deliver more than 600,000 European vehicles using the MEB architecture – Modular Electrification Toolkit, a design system for EV layout geared toward efficiency and low cost – over six years, with a second all-new Ford model for European customers under consideration.

"We will offer an exceptional range of electrified vehicles, supported by customer-centric digital services and experiences, allowing our customers to come with us on the journey to a fully electric future, starting right now with the launch of the all-electric Mustang Mach-E," concluded Rowley. "In combination with our leading commercial vehicle business, this will form the basis of a sustainably profitable Ford business in Europe."

European EV mandates

Ford is just one among many vehicle manufacturers turning their focus to battery-powered vehicles, as earlier this week Jaguar announced it would soon offer only pure EVs. As well as several additional automakers like Bentley, Nissan, Volvo and General Motors having previously made their own commitments to going 100% electric in one form or another.

This shift toward electrification by these world-class automakers in Europe is possibly to meet compliances with European government mandates that push electrified vehicles and enforce strict emissions standards.

The European Union set automakers a target to cut carbon dioxide emissions by 40% between 2007 and 2021, yet insofar have fallen far short of this goal due to the popularity among drivers of high emission vehicle models such as SUVs.

It is speculated that many major automakers, while incentivized to produce EVs in many countries in Europe, are more highly motivated by the strict compliance regulations enacted by the EU that has forced these companies to move to full electric production despite the uncertainty surrounding it.

Currently, EU lawmakers have set a general target that emissions from all new cars sold by an automaker should, on average, not exceed 95 grams of carbon dioxide per kilometer by 2021. If so, manufacturers will face a penalty of 95 euros (US$115) for each gram of excess CO2 they emit compared with their individual targets.

Analysts have estimated that carmakers face a combined 33 billion euros (US$39.7 billion) in fines based on reported CO2 emissions of 2018.

With an extension to continue to lower emissions by 37.5% by 2030, many European countries have begun to set targets to ban traditional gas-powered cars and van, with Norway aiming for 2025 and France and the UK for 2040 and 2050.

With automaker giant Ford pushing for such a massive overhaul of its European market for electrification, and little to no word being spoken of regarding the American-based company doing similar actions on its home field, it possibly adds a little credence to the speculation.

On the positive side however, incentives for automakers to build EVs range from multiple variations of tax cuts or no taxes at all to reduced parking fees and even monetary grants to help customers move from petrol (gasoline) to electricity as long as the vehicle does not exceed a specified value.

Currently 12 countries in western Europe have developed differing methods of enticing both automakers and consumers to shift to electricity, yet the apprehension persists regardless of fines or incentives in a lack of EV infrastructure.

Ultimately, Europe is on the fast track to completely replace combustion engines and automakers see that, whether other countries in the world begin their own methods of enacting change to a clean and sustainable transportation future falls on them.