Ford Motor Company (NYSE:F) announced plans to invest $185 million into a new battery lab as it pushes toward manufacturing its own battery cells for its electric vehicles. The automaker is following in the footsteps of Tesla Inc (NASDAQ:TSLA) and General Motors Company (NYSE:GM) in making its own EV batteries.
Ford Set To Build Battery Pack
The $185 million will build Ford Iron Park, which the automaker says is a "pilot facility" for battery production that will likely open by the end of 2022 near Detroit. The 200,000-square-foot lab will speed up the development of battery technologies as Ford prepares to "eventually manufacture" new batteries and battery cells.
Ford did not offer a timeline for producing battery cells internally. According to CNBC, it currently buys cells for its electric vehicles from suppliers like SK Innovation in South Korea. Ford's chief product platform and operations officer, Hau Thai-Tang, said it makes sense for them to buy battery cells from suppliers until electric vehicles are more widely adopted. IHS Markit estimated EVs at 2% of vehicle registrations in the U.S. last year.
The automaker's new battery facility won't be a complete battery cell factory like Tesla already has. GM has already announced such a facility as part of its $4.6 billion investments in two battery factories with LG Energy Solution.
Thai-Tang told journalists during a press conference that they want to make Ford flexible enough to integrate vertically at some point. He added that the facility would enable the automaker to "develop that expertise and competency in house" and provide flexibility for the future.
Thai-Tang also said that the facility would work on "advancing" the next generation of lithium-ion batteries. Ford is looking into solid-state lithium batteries, which are believed to be safer and better than the cells in use right now.
The automaker's latest announcement follows a $100 million investment into a new battery benchmarking and test lab. Ford opened the facility last year in the Detroit suburb of Allen Park. The two investments add to the automaker's plans to invest $22 billion into electric vehicles between 2016 and 2025.
Ford Set To Report Earnings
The automaker's announcement came a day before it will report its first-quarter earnings, which are set for release after the closing bell today. Ford is expected to report 21 cents per share in earnings on $32.23 billion in revenue. In the year-ago quarter, the automaker reported losses of 23 cents per share on $31.34 billion in sales.
Ford is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families. Henry Ford's family remains involved in the day-to-day running of the automaker.