Ford To Increase EV Capacity To 600,000 Units By 2023

    The Legacy Automaker Is In The Midst Of The Largest Strategic Pivot In Company History

    Ford Mustang Mach-E Electric SUV (Image Courtesy Of Ford Motor Company)

    During its Q4 2021 earnings call on Thursday, Ford Motor Company (Ford) said it plans to increase its electric vehicle (EV) production capacity to 600,000 units by 2023. The company reiterated that it is on track to begin highly anticipated F-150 Lightning deliveries this spring, as well as break ground on its US$11.4 billion Blue Oval City EV and battery production campus in the first half of this year.

    Ford sold just over 27,000 of its Mustang Mach-E electric SUVs in 2021, making it the second-highest EV company by sales in the United States behind Tesla. But reservations for the Ford F-150 Lightning, Mach-E, and its E-Transit electric van currently stand at more than 275,000. Ford plans to produce more than 100,000 Mach-Es in 2022, barring supply chain challenges.

    Ford expects commodity price headwinds due to inflation and the ongoing semiconductor challenge will inflict US$1.5 billion and US$2 billion in added costs this year. Yet the company is confident it can overcome challenges as it improves its supply chain and better understands the differences between its traditional internal combustion engine (ICE) business and its EV business.

    Ford F-150 Lightning Pro Electric Pickup Truck (Image Courtesy Of Ford Motor Company)

    “Perhaps the biggest gift for all the pain we’re going through now in semiconductors is that we have very painfully learned the lesson that we cannot manage the supply chain for these key components as we have,” said Ford CEO Jim Farley on the company’s Q4 2021 conference call. “In fact, you could argue that in the transition to these digital electric vehicles, supply chain could be one of the biggest advantages a particular company has or doesn’t have.”

    Ford sold nearly 4 million cars in 2021, just over 2 million of which were sold in the United States. North America was the company’s only profitable region in 2021, but a major redesign should allow Ford to achieve widespread profitability in the years to come. The company expects at least 40% of its 2030 revenue to come from EVs.

    In addition to ramping production of the F-150 Lightning and Mach-E, 2022 will mark Ford’s first full year of production for the Ford Bronco and the Ford Maverick. Unlike other pure-play EV companies, Ford believes that its ICE business can continue to grow and provide extra free cash flow that can be used to accelerate its EV investments and solidify Ford as the market leader in the electric pickup truck market.