Ford has announced that it will build a new electric car plant at its existing site in Valencia, Spain, as part of its $30bn investment in electrification by 2025. The plant will produce two new electric models for the European market starting in 2023. Ford said that it chose Valencia because of its skilled workforce, competitive costs, and existing infrastructure.
This is a significant move for Ford, one of the world's most iconic and influential car brands. Ford has been making cars for over a century and has been at the forefront of innovation and design. Ford has shaped the automotive industry and culture with its products, from the Ford Model T to the Ford Mustang, from the Ford F-150 to the Ford Explorer.
Ford is embracing the electric revolution and aiming to become a leader in this fast-growing segment. Ford has already launched several electric and hybrid models, such as the Ford Mustang Mach-E, the Ford F-150 Lightning, and the Ford Escape Hybrid. Ford also has plans to electrify its entire European passenger vehicle range by 2026 and to offer only electric or plug-in hybrid vehicles by 2030.
Factors such as consumer demand, environmental regulations and competitive pressure drive Ford's electric strategy. Consumers are increasingly looking for cleaner, cheaper, and smarter alternatives to gas-powered cars. Electric cars offer lower emissions, lower maintenance and fuel costs, and advanced technology features. Electric cars also have positive impacts on public health and the climate, as they reduce air pollution and greenhouse gas emissions.
Environmental regulations are also pushing carmakers to adopt electric vehicles. The European Union has set ambitious targets to reduce carbon dioxide emissions from new cars by 37.5% by 2030 compared to 2021 levels. The EU also offers incentives for consumers to buy electric cars, such as subsidies, tax breaks, and exemptions from road charges. Several European countries have also announced plans to phase out new petrol and diesel car sales by 2030 or 2040.
Competitive pressure is another factor that motivates Ford to go electric. The electric car market is growing rapidly, with more than 3 million units sold globally in 2020, up from 450,000 in 2015. The market is expected to reach 26 million units by 2030, according to BloombergNEF. Ford faces stiff competition from other established carmakers, such as Volkswagen, Renault-Nissan, and Hyundai-Kia, as well as new entrants, such as Tesla, Lucid, and Rivian.
Ford's decision to build a new electric car plant in Valencia is a smart move that will help it gain a competitive edge in Europe. Valencia is one of Ford's largest European manufacturing sites, with a history of producing high-quality vehicles since 1976. The site currently employs about 7,000 people and produces several models, such as the Ford Kuga SUV, the Ford Mondeo sedan, and the Ford S-Max minivan.