At an event in Detroit on Friday, Ford chairman Bill Ford announced the company’s plan to spend $11.4 billion on the development of electrified vehicles over the next four years — including a $2.5 billion investment in a new battery and electric drivetrain plant in China.
“We’re going to put Ford and Michigan at the epicenter of the electric car revolution. This global investment will create the capacity for 1 million EV models globally by 2023, triple the number we’re building today,” Ford said in a statement.
The investment announcement comes just days after Ford reported a 46% year-over-year drop in 2018 operating profit to $2.9 billion.
“The next chapter of Ford’s transformation includes providing more compelling products for the mass market that connect people to the world and their destinations. This includes enabling electrified vehicles with fast charging, longer ranges and better range per charge,” Bill Ford said.
Ford reported results just days after the company warned that “the worldwide auto industry is facing tremendous challenges” and warned it would miss profit goals in 2019. Ford Motor Company shares have declined by almost 7% in 2019, but overall the stock is up a whopping 400% over the past five years.
Ford also said it would reallocate resources and money to its pickup truck business, but wouldn’t give any specifics on where those resources would be brought.
Chinese investment in Ford’s SUV projects was a major step in China’s ambitious campaign to reduce the nation’s dependency on fossil fuels. The Chinese government introduced an accelerated plan last year to phase out high-emission vehicles as part of its “Vision 2025” industrial strategy.
The proposed Ford plant is expected to be in Zhengzhou, the largest city in the central province of Henan. Henan is a hotbed of SUV production, but also places heavily on production of electric vehicles. Other automakers are also pouring resources into China as part of their electrification plan there.