DEARBORN, Mich. — In a bold move to strengthen Ford Motor Company’s position in the rapidly evolving electric vehicle (EV) market, CEO Jim Farley announced in early 2022 a strategic shift toward increasing in-house production of key EV components. The decision is designed to give Ford tighter control over its supply chain, lower production costs, and improve manufacturing efficiency as global demand for electric vehicles continues to surge.
This initiative represents a major milestone in Ford’s broader transformation plan, as the automaker ramps up investment in electrification and pivots from its traditional internal combustion roots to a high-tech, sustainable future. By bringing the production of essential EV parts—such as batteries, motors, and power electronics—under its direct management, Ford aims to ensure quality, secure component availability, and accelerate innovation timelines.
Farley pointed to the early success of Ford’s flagship electric models, the Mustang Mach-E SUV and the F-150 Lightning pickup, as evidence of the company’s momentum in the EV sector. The Mach-E has received strong reviews and robust sales since its launch, while the F-150 Lightning, an all-electric version of America’s best-selling truck, has generated considerable demand, with reservations exceeding initial production capacity.
“These vehicles are proof points that we can lead in electric and connected technology,” Farley said in a statement. “To win in the EV era, we need to control our own destiny by developing key capabilities internally.”
Central to this strategy is Ford’s decision to invest in vertically integrated manufacturing systems, which includes building new production facilities and upgrading existing plants. The company has committed more than $50 billion globally through 2026 toward EV development and production capacity, a figure that places it among the most aggressive legacy automakers in the EV race.
One major pillar of this effort is BlueOval City, a $5.6 billion mega-campus in Tennessee set to begin operations in 2025. The facility, developed in partnership with South Korean battery manufacturer SK On, will produce electric trucks and batteries, supporting Ford’s goal of delivering 2 million EVs annually by the end of 2026. Additional battery plants are being constructed in Kentucky as part of the joint venture, BlueOval SK.
Farley’s emphasis on vertical integration comes amid widespread supply chain challenges that have impacted the entire auto industry, particularly in the availability of semiconductors and lithium-ion batteries. By internalizing more of the production process, Ford hopes to mitigate risks tied to third-party suppliers and respond more nimbly to market fluctuations.
The shift also reflects a deeper transformation in Ford’s organizational structure. In 2022, the company split its operations into two distinct business units: Ford Model e, which focuses on EVs and software, and Ford Blue, which continues to manage internal combustion vehicles. This division is designed to foster innovation within the EV division while maintaining profitability in Ford’s traditional business.
Analysts view the move as a crucial step in maintaining competitiveness against rivals like Tesla, General Motors, and Hyundai, all of whom are making significant inroads into electric mobility. “Ford’s in-house strategy is about control and speed,” said Michelle Krebs, executive analyst at Cox Automotive. “If they can execute, it gives them a significant advantage in cost and agility.”
Ford’s efforts are aligned with broader trends in the industry as automakers worldwide seek to reduce dependency on global supply chains and localize production. The Biden administration has also encouraged domestic EV production through incentives in the Inflation Reduction Act, which benefits companies that build EVs and batteries in North America.
Looking ahead, Farley has signaled that Ford’s ambitions are not just about vehicles but about creating a software-driven, service-oriented company that leverages connected technology. The future Ford EV lineup is expected to feature more over-the-air updates, driver-assist features, and integrated digital services that extend beyond traditional vehicle ownership.
As consumer preferences evolve and regulatory pressure for zero-emission vehicles intensifies, Ford’s pivot to in-house EV production marks a decisive moment in its century-long history. With Farley at the helm, the company is betting big on its ability to innovate and lead in a fast-changing automotive landscape.
