Ford to invest $700 million in Michigan electric, hybrid cars; cancels investment in Mexico

Ford to invest $700 million in Michigan electric, hybrid cars; cancels investment in Mexico

Electric vehicle push to include 13 new vehicles throughout next five years.

January 4, 2017

Cleveland, Ohio – Ford plans to invest $700 million in Michigan to boost efforts to build hybrid and plug-in electric vehicles including at hybrid Mustang. And in unrelated news, the company has cancelled plans to build a $1.6 billion plant in Mexico to build small cars, saying demand for the Focus has fallen, and the vehicle no longer requires a standalone plant.

Electric vehicle plans

The $700 million to be invested in Ford’s Flat Rock Assembly Plant south of Detroit will expand that plant’s lineup beyond the Mustang and Lincoln Continental it now builds and create 700 new jobs.

The plant will becomeFord’s electrified vehicle manufacturing hub. Strangely enough, the plant on the west side of I-75 is less than 4 miles away from General Motors’ Brownstown plant – the facility that makes batteries for GM electric cars including the Chevy Bolt EV and Chevrolet Volt plug-in hybrid.

Throughout the next five years, Ford plans to launch 13 electrified vehicles, the first seven of which are:

  • A fully electric small SUV, coming by 2020, engineered to deliver an estimated range of at least 300 miles, to be built at the Flat Rock plant and sold in North America, Europe, and Asia
  • A high-volume, hybrid, autonomous vehicle designed for commercial ride hailing or ride sharing, starting in North America. The vehicle will debut in 2021 and will be built at the Flat Rock plant
  • A hybrid F-150 pickup available by 2020 and sold in North America and the Middle East. The F-150 Hybrid, built at Ford’s Dearborn Truck Plant, will offer powerful towing and payload capacity and operate as a mobile generator
  • A hybrid Mustang that will deliver V-8 power and even more low-end torque. The Mustang Hybrid, built at the Flat Rock Plant, debuts in 2020 and will be available in the North America to start
  • A Transit Custom plug-in hybrid van available in 2019 in Europe engineered to help reduce operating costs in even the most congested streets
  • Two new, pursuit-rated hybrid police vehicles. One of the two new hybrid police vehicles will be built in Chicago, and both will be upfitted with their police gear at Ford’s dedicated police vehicle modification center in Chicago

“As more and more consumers around the world become interested in electrified vehicles, Ford is committed to being a leader in providing consumers with a broad range of electrified vehicles, services and solutions that make people’s lives better,” says Mark Fields, Ford president and CEO. “Our investments and expanding lineup reflect our view that global offerings of electrified vehicles will exceed gasoline-powered vehicles within the next 15 years.”

The incremental investment in Flat Rock Assembly Plant comes from $1.6 billion the company previously had planned to invest in a new plant in Mexico.

Scrapping investment in Mexico

Ford last year announced plans for a$1.6 billion plant to build the Focus compact car in San Luis Potosi, Mexico. However, demand for compact cars has been falling for the past two years, and low fuel prices are expected to keep demand light for several more years. In addition, demand has been light for the Fusion mid-sized sedan that is already produced in Hermosillo, Mexico.

So, instead of moving the Focus to the new plant, Ford plans to consolidate much of its car production to Hermosillo and produce both the Focus and the Fusion there. As company and union officials announced last year, the Wayne, Michigan, plant that now builds the Focus will shift production to new truck and SUV models in the coming years.

"The reason that we are not building the new plant, the primary reason, is just demand has gone down for small cars," Fields said, according to The Detroit Free Press. The Detroit News also quoted him saying, “The bottom line is based upon what we see going forward in the segmentation; we didn’t need that capacity anymore.”

Source: Ford Motor Co., Detroit Free Press, Detroit News