The world is pushing for more electric vehicles, and Ford EV manufacturing plants are bracing themselves. Already, the company has set a massive budget to help them go fully electric by 2026. Ford also has new factories that will help boost the production of their electric vehicles in Europe.
The aim of this increase in the budget for electric vehicles from Ford is to meet the company’s target of two million EVs annually. But, to feed this growth, the company will need access to more batteries. This means that more supplies will have the opportunity to sell Ford the necessary equipment (battery) to help it achieve its goal.
EU rule of origin and Ford’s battery supply
Read also: Ford Mustang Mach-E facing battery issues.
In Europe, for example, the company is adding three new battery suppliers to its arsenal. It might seem easy for Ford to source batteries from Asian suppliers to feed its expansion this sounds like a good move. But, this isn’t possible considering the EU rule of origin for electric vehicles.
This rule is simple, and it states that all EVs to be sold in the EU must use at least 55% material from its members. In effect, this rule forces Ford to purchase more batteries from the EU and its members. To help sell Ford EVs while operating under this rule, the company needs to turn to European manufacturers or make its batteries within the EU.
Currently, the company is building a battery manufacturing plant in Turkey, but won’t be able to use the batteries from that factory in cars for EU regions. LG’s factory in Poland might be a good place for the sourcing of batteries for future Ford EV production. Also, CATL which is one of Ford’s battery suppliers has a plant in Germany and can continue to produce batteries for the automobile company.
