Ford may make its own battery cells as a way to preserve jobs

Ford Motor Co has reversed course and is now considering making its own battery cells as sales volumes of electric vehicles rise around the world, the automaker's top executive said on Friday.

"We are discussing (battery) cell manufacturing," Ford Chief Executive Officer Jim Farley said Friday at the Reuters Automotive Summit teleconference. "I think that's natural as (EV) volume grows."

As recently as last July, then-CEO Jim Hackett said there was "no advantage" to Ford making its own battery cells.

"The fact of the matter is electric vehicles have 40 percent less parts, and that means they're a lot easier to put together," Farley said. "We do have to solve for the reality that when electrification becomes 25 percent or 50 percent of our industry in the coming years, what are we going to do about the jobs? One of the obvious choices is going into cell production."

In the meantime, other automakers, including General Motors and Tesla, are investing billions of dollars in their own battery cell manufacturing plants to supplement production from suppliers. The batteries for Ford's first wave of EVs, such as the Mustang Mach-E, will come from outside suppliers.

Industry analysts have presented sometimes conflicting views on whether battery cell manufacturers will be able to keep up with an anticipated acceleration of demand for electric vehicles through 2025 and beyond.

While Ford's publicly announced electric vehicle production plans so far have remained relatively modest, GM and Hyundai Motor Co have said they plan to be building and selling one million electric vehicles a year by 2025, and Volkswagen AG has targeted annual sales of 3 million EVs by then for all its global brands.

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