Ford is changing gears yet again in Mexico, shifting planned production of a small electric-powered sport utility vehicle to a plant south of the border instead of a Michigan factory.
Ford plans to create a dedicated assembly line for electric vehicles at its plant in Cuautitlan, Mexico, with production slated to begin in 2020. Sending the electric vehicle to Mexico, where labour costs are lower, will help the business case for the costly model. It also risks raising the ire of President Donald Trump.
Trump, who had been sharply critical of an earlier plan by Ford to build a small car factory in San Luis Potosi, that the company ultimately cancelled.
“They have to do what’s best financially and this electric vehicle is not going to be huge” in terms of sales volume, said Michelle Krebs, an analyst with car-shopping website Autotrader. “It’s not like they’re not putting money into the U.S.”
Redirecting electric-vehicle production south of the border is about more than shaving costs. The move will make room for the Flat Rock factory to serve as Ford’s “centre of excellence” for autonomous vehicles, Ford President of Global Markets Jim Farley said in an interview. The driverless car is to debut in 2021.
The SUV to be built in Mexico starting in 2020 will go 300 miles on a single charge and is the centerpiece of a planned $4.5 billion overhaul of Ford’s lineup to add 13 electric or hybrid models, including a gas-electric F-150. Ford has been viewed by Wall Street as playing catch-up to rivals such as Tesla Inc. and General Motors Co., which already sells the battery-powered Chevy Bolt and plans to introduce robot taxis in 2019.