EVs – Ford to Spend $11.4B Creating a Tennessee Campus, Twin Battery Plants in Kentucky

Ford Motor Company claims it is making the largest U.S. investment in electric vehicles at one time by any automaker. With its partner, SK Innovation, Ford plans to invest $11.4 billion and create ~11,000 new jobs at the Tennessee and Kentucky “mega-sites.” Overall, Ford expects 40% to 50% of its global vehicle volume to be fully electric by 2030.

Both states are “right to work” (for less?) states, which means workers don’t have to be unionized. Tennessee sent $500 million in incentives from its taxpayers. Kentucky donated $300 million and what appears to be about 1,500 acres of free land. Thus Ford is the latest automaker attempting to lay off some or more of the huge capital costs needed to build EVs as global warming make their increasing use inevitable. SK Innovation will split off its battery business on October 1 as a wholly owned subsidiary. (EU Gets Tougher on Climate Change – Wants All EVs by 2035; Toyota, Subaru at Shanghai Introduce Latest Joint-Venture EVs; Volvo to Only Sell EVs Online as a Pure EV Company by 2030GM Doubles Down on EVs in Bid to Win Global Race)

An all-new $5.6 billion mega campus in Stanton, Tenn., dubbed Blue Oval City, will create ~6,000 new jobs and >pr babble alert> “re-imagine how vehicles and batteries are manufactured. Blue Oval City will become a vertically integrated ecosystem for Ford to assemble an expanded lineup of electric F-Series vehicles. It will include a BlueOvalSK battery plant, key suppliers and recycling.

Ford’s new Tennessee assembly plant is designed to be carbon neutral with zero waste to landfill once fully operational… Blue Oval City will be among the largest auto manufacturing campuses in U.S. history. Like the iconic Rouge complex in Michigan did a century earlier, Blue Oval City will usher in a new era for American manufacturing.” Tennessee Attorney General Herbert Slatery has joined 22 other Attorneys General – including Kentucky’s – in lobbying Congress kill a pending voting rights bill.

In central Kentucky, Ford plans to build a dedicated battery manufacturing complex with SK Innovation – the $5.8 billion BlueOvalSK Battery Park – creating 5,000 jobs. Twin battery plants on the site are intended to supply Ford’s North American assembly plants with locally assembled batteries for powering next-generation electric Ford and Lincoln vehicles. Investments in the new Tennessee and Kentucky battery plants are planned to be made via BlueOvalSK, a new joint venture to be formed by Ford and SK Innovation, subject to definitive agreements, regulatory approvals and other conditions.

At Blue Oval City, a 3,600-acre campus covering 6 square miles, will have vehicle assembly, battery production and a supplier park in a vertically integrated system that Ford claims “delivers cost efficiency while minimizing the carbon footprint of the manufacturing process. The assembly plant will use always-on cloud-connected technologies to drive vast improvements in quality and productivity. The mega campus is designed to add more sustainability solutions, including the potential to use local renewable energy sources such as geothermal, solar and wind power.”

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2 Responses to EVs – Ford to Spend $11.4B Creating a Tennessee Campus, Twin Battery Plants in Kentucky

  1. Congress recently unveiled a draft proposal to expand refundable tax credits up to $12,500 for individuals who purchase qualified plug-in electric vehicles (PEVs) – including battery electric (BEV), plug-in hybrid (PHEV), and, for the first time, fuel cell electric vehicles (FCEV). The proposed program to “green the fleet” is part of the Build Back Better spending bill that Congress is considering in tandem with the Infrastructure Investment and Jobs Act that the Senate passed in August 2021. Build Back Better would cost $3.5 trillion over ten years, while the Infrastructure Investment and Jobs Act contains $944 billion in total spending over five years.

    The bipartisan infrastructure bill that passed the Senate reauthorizes the national surface transportation program and provides an additional USD 550 billion over baseline funding for traditional infrastructure. The next step in passing this bill into law is for the House of Representatives to approve it. However, House Speaker Pelosi has pledged to delay voting on this bill until the Senate passes the Build Back Better spending bill that provides funding for a wide array of social, economic programs, and environmental programs (such as EV tax credits) to ensure both bills reach the President’s desk. Congress is hoping to pass the larger spending bill through a process called budget reconciliation. A reconciliation bill would require only a bare majority of votes to pass the Senate rather than being subject to a two-thirds vote necessary to override a filibuster.

    The reconciliation package expands and modifies tax credit programs that provide consumer incentives to purchase electric vehicles. The proposal for new consumer incentives would wholly replace the current $7,500 maximum refundable tax credit with a program that contains:
    • $4,000 for any plug-in electric vehicle of greater than 7 kWh of capacity
    • Plus an additional $3,500 for vehicles with batteries of greater than 40 kWh of capacity
    • Plus an additional $4,500 for vehicles with final assembly by unionized labor
    • Plus an additional $500 for vehicles with battery cells manufactured in the United States that also have greater than 50 % domestic content

    For the first time, the proposed program would make FCEVs and used PEVs eligible for purchase incentives. It would also eliminate the per-manufacturer 200,000-unit cap in the existing program—enabling buyers of General Motors and Tesla vehicles to qualify for federal tax credits again. Finally, the draft legislation includes a provision that allows consumers to opt to receive the credit at the time of purchase vs. waiting to claim the credit on next year’s tax return, which lowers the up-front cost and amount financed.

    While the proposal is expansive, there are several caveats and limitations to the program:
    • Qualifying vehicles would have an MSRP limit ranging from $55,000 for a sedan to USD 74,000 for a pickup truck
    • Starting in 2027, only vehicles with U.S. final assembly would qualify for this program
    • Credits would be available in full to vehicle buyers with adjusted gross income up to a threshold limit of $400,000 per individual, USD 600,000 for a head of a household, and $800,000 for joint returns.

    The new PEV tax credit program has garnered some opposition from GOP lawmakers—framing it as a gift to unions and relatively wealthy car buyers, non-union automakers who object to the $4,500 credit, and importers and trading partners object to the eligibility sunset for imported vehicles.

    As this legislation moves forward, both the House and Senate will have the opportunity to revise the PEV tax credit program details as part of the negotiations over the reconciliation spending bill. It remains unclear if this current $3.5 trillion spending package will achieve enough support to pass the Senate.

    CAR will continue to monitor the progress of this legislation and its potential impacts on the automotive industry and the U.S. economy – Kristin Dziczek, Senior Vice President, Research and Eric Paul Dennis, P.E., Senior Transportation Systems Analyst.

  2. AutoCrat says:

    The General Assembly of on Wednesday 10/20 agreed to $884 million in taxpayer subsidies for the $5.6 billion electric-vehicle supplier campus – dubbed Blue Oval City – with assembly, battery manufacturing by Ford Motor Co. and its joint-venture partner, SK Innovation.

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