Ford Pumps $29 Billion Into Electric Vehicle Plot After Splashy Mustang Mach-E Success

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Ford Motor Company has been feeling around for its place in the electric vehicle market of the future, and it has finally decided that the future is now. Last year, Ford introduced an electric version of its iconic Mustang with great fanfare, and yesterday the company followed up with a new $29 billion plan to electrify and digitize its fleet. If it wasn’t for that pesky semiconductor shortage…

Wait, What Semiconductor Shortage?!?

If you thought 2020 was crazy, hold on to your hats. The year 2021 started off with a failed insurrection in the USA and the popping up of new COVID-19 strains in the UK and elsewhere, so of course there is going to be a global semiconductor shortage.

Our friends over at Autoblog cite a laundry list of automakers that are already feeling the semiconductor pinch, which the experts who know such things attribute to a surge in car purchases and electronics purchases. The COVID-19 crisis has dampened down interest in mass transportation and sparked a frenzy of activity in the area of electronic goods for remote work.

CNBC is among those laying part of the responsibility for the shortfall at the feet of the previous US Commander-in-Chief, observing that “car factories around the world are shutting assembly lines because of the chip shortages, which in some cases have been exacerbated by the former U.S. administration’s actions against Chinese chip factories.”

Not to worry — newly minted President Joe Biden is already on the case.

Last night, CNBC reported on a high-level meeting between Taiwan Economy Minister Wang Mei-hua, US officials, and industry representatives, which apparently followed on some earlier behind-the-scenes back-and-forth with the new Biden administration.

“The United States thanked Taiwan on Friday for help on resolving an auto chip shortage that has snarled production, but there was no discussion on prioritizing the making of these chips,” CNBC deadpanned.

Wait, What Semiconductor Shortage Part Deux

Do tell! Whatever happened behind the curtain, Taiwan happens to be the world’s largest chip-making nation, and it already seems to be gearing up to meet the surge in demand.

Also of interest, Taiwan Semiconductor Manufacturing Co happened to be sitting in on the high-level meeting, and last December Taiwan approved the company’s plan to invest $3.5 billion in the first phase of a massive new chip factory to be built in Arizona.

As reported by Reuters, the new chip project will eventually top out at $12 billion. TSMC expects to produce 20,000 silicon wafers a month when volume-scale production kicks in, which should take place in 2024.

In the meantime, now would be a great time for global auto manufacturers to make a big huge deal about electric vehicles, and pump up demand even as the supply chain squeeze forces cuts in production plans. After all, there are few better ways to catch somebody’s attention than telling them they can’t have something.

Ford Takes Big Swing At Electric Vehicle Market

Where were we? Oh, right, the new $29 billion announcement.

Ford took no chances with the Mustang Mach-E SUV rollout last year. The car has been earning rave reviews, including from the folks over here at CleanTechnica, and it looks like all that hard work paid off. In an earnings call last night, Ford President and CEO John Farley stated that 70% of Mach-E customers are new to Ford. That figure includes previous Ford buyers who haven’t checked in for about 15 years, so it looks like Ford will lean on the Mach-E approach to help crack the electric vehicle code.

In the latest news on that score, yesterday Ford announced a $29 billion plan to drill down on the electric vehicle market, with a heavy assist from the autonomous vehicle field, almost double the company’s previous investment in cutting-edge mobility technology.

It’s also more than five times the $5 billion EV investment Ford announced in 2015.

For those of you keeping score at home, the breakdown is $22 billion for electric vehicles, $7 billion for autonomous vehicles.

Hitting The Electric Vehicle Market Where It Counts

Those of you hoping for a sporty little Ford passenger car might want to settle down for a long wait, though. The company plans to get back into the game by focusing its electric vehicle plans on its areas of strength, meaning pickup trucks, commercial vans, and SUVs.

In addition to the Mach-E, keep an eye out for a new electric commercial van later this year, and an all-electric F-150 pickup by the middle of 2022.

On the connectivity side, Ford has hooked up with an A-list of leading tech firms, headlined by Google, which will partner with Ford in a new collaboration called Upshift.

“The relationship will help Ford accelerate its transformation in key areas – modernizing operations, disrupting how it does things, partnering for expertise and efficiency, and creating must-have products and services – through Google’s operating system, apps and services,” Ford explains, so stay tuned for more on that.

As for keeping up with the Joneses, Ford may be a bit late to the electric vehicle game but its distribution and manufacturing infrastructure should enable it to catch up fast. The new announcement lists Michigan, Missouri, Canada, Mexico, and China among other locations where Ford is already making electric vehicles or plans to do so.

The company also plans to call in the heavy artillery to deal with the semiconductor shortage.

“Our team is working with suppliers around the clock to optimize the constrained supply and minimize profit impact, while prioritizing customer orders, new-vehicle launches and compliance with CO2 emissions regulations,” said Ford CFO John Lawler.

After Baby Steps, One Mighty Leap For Ford

Ford is planning to provide an update on the semiconductor shortage on April 28, so stay tuned for more on that, too.

In the meantime, it’s worth a look into the CleanTechnica wayback machine to review some of the the moving parts that go into creating an electric vehicle ecosystem that makes that new $29 billion investment worthwhile.

Ford signaled a shift away from fossil fuels in 2016, when it cut ties with the powerful fossil-friendly lobbying organization ALEC and hooked up with the ethical electronics organization EICC. The company also got a head start on the e-bike revolution, including a foldable e-bike to take on the formidable “last-mile challenge” — though, there wasn’t much new news on that score last year.

In another area of interest, Ford is also doing much science around the area of sustainable car parts, such as materials made from recycled carbon. Lifecycle issues are also in play, including two-way glues that make recycling more efficient.

Semiconductor shortage or not, it sure looks like the US auto industry is finally ready for its electric vehicle closeup.

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Tina Casey

Tina specializes in advanced energy technology, military sustainability, emerging materials, biofuels, ESG and related policy and political matters. Views expressed are her own. Follow her on LinkedIn, Threads, or Bluesky.

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