Ford to announce EV strategy amid tariff hit forecasts from automakers. What to know
Ford Motor Co. is expected to outline its future electric vehicle strategy Aug. 11 at its Louisville plant.
And it’s likely that announcement is going to benefit Kentucky.
CEO Jim Farley said the company’s next big announcement of what will likely involve an electric vehicle line and cheaper batteries is its next “Model T moment.” During its second-quarter earnings call at the end of July, Farley, who joined the company in 2007, was making a reference to the early Ford’s model that then became one of the first vehicles to be mass produced.
“Aug. 11 will be a big day for all of us at Ford,” Farley said. “We will be in Kentucky to share more about our plans to design and build a breakthrough electric vehicle and a platform in the US.”
The Louisville Assembly Plant as the announcement’s backdrop follows agreements from Ford to make changes and upgrades to its production lines. Documents filed with Louisville Metro Government June 2 show Ford is in the process of renovating the facility to better suit electric vehicle (EV) production.
Ford and South Korean company SK On began building a nearly $6 billion, 1,500-acre campus in 2022 an hour south of Louisville where — in two plants estimated to employ 2,500 people each — workers are making batteries for electric vehicles.
Farley said during the earnings call Ford’s new EV strategy is the result of consumer demand trends while regulations change. He said the company may begin to offer a few different styles, such as hybrids, range-extended EVs and some partial zero emission vehicles.
“We’ve definitely moved out launches, we’ve canceled some products, we’ve made the right choices in terms of battery chemistry change, like our (lithium iron phosphate battery cells) in Michigan,” Farley said.
“I think we’re very well-positioned for the reality of the EV market with the customers today.”
The automaker is continuing to delay launching new-generation electric vehicles in favor of smaller, affordable and profitable models, according to the Detroit Free Press. Ford has yet to make money on electric vehicle sales and projected it would likely lose up to $5 billion in related software operations this year.
During its second quarter, the company reported its Model e lost $1.3 billion, slightly more than the same time period last year. Model e is one of Ford’s all-electric vehicle.
In his weekly Team Kentucky update Thursday, Gov. Andy Beshear also hinted at yet another economic development announcement. Beshear didn’t say it was related to Ford’s Monday strategy release, but indicated another wave of good economic news for the commonwealth was on the horizon.
On Aug. 5, Beshear was in Paducah to celebrate the lease signed on a $1.5 billion facility at the US Department’s former Gaseous Diffusion Plant. And on Aug. 6, Apple said it would make a $2.5 billion investment in Harrodsburg where, soon, all glass covers for iPhones and Apple Watches sold around the world will be made.
“A $4 billion week doesn’t happen all that often, it’s actually only happened once before in the commonwealth of Kentucky’s history,” Beshear said Thursday.
“Wait until you see next week. I know it feels like a chaotic world, but there are good things happening, and when those good things happen, let’s make sure we celebrate them.”
Finance authority to hear new business
Ford’s announcement is taking place in Louisville at the same time the Kentucky Economic Development Finance Authority hears new business in Frankfort through the state’s Jobs Retention Act. The state program hands out performance-based tax credit agreements to companies based on cumulative investments and annual job targets.
The jobs retention policy has been on the books for almost two decades and has been amended several times since then. Local automotive industry projects have been supported in part by agreements through the state’s program over the years.
When Ford said in 2022 it would expand its Louisville presence with a $700 million investment and 500 new jobs to produce its F-Series Super Duty truck, the state’s finance authority approved an agreement for up to $430 million in tax incentives for the company.
This past December, an agreement between the state and Toyota provided that company with up to $267.5 million in tax credits based on its more than $920 million investment and 8,950 job promise for an advanced paint facility at its existing Georgetown plant. Last February, the same automaker entered an agreement with the state following an increase in future investments across the state.
GE Appliance’s June announcement it would move its washer and dryer production lines to the US at its Appliance Park in Louisville was approved for up to $113.5 million in tax incentives.
Automakers forecast tariff hits
On Thursday, Japan’s Toyota Motor Corp. said it anticipates a nearly $10 billion hit from President Donald Trump’s new tariff hikes as it deals with rising costs from levies on steel, aluminum and other car parts. The company’s estimate includes some of the financial fallout its suppliers face.
“It’s honestly very difficult for us to predict what will happen regarding the market environment,” the car maker’s head of finance, Takanori Azuma, said recently.
Toyota’s forecast is the highest estimate of any company, Reuters reported.
General Motors Co. projected its tariff hit would be somewhere between $4 billion and $5 billion for the year. Ford Motor Co. expects a $3 billion hit. Stellantis NV, the maker of Jeep, Chrysler, Ram, Dodge and others, said tariffs would add nearly $2 billion to its expenses this year.
Import tariffs are expected to make shopping for a new car more difficult as auto manufacturers look for ways to offset the higher manufacturing cost.
Recent investor calls, that include billions of dollars worth of projections for how much tariffs will cost automakers, have included some discussion of whether customers will begin to foot the bill.
It’s not clear yet how the impact of tariffs might impact some auto-making factories across Kentucky.
The commonwealth is the No. 1 producer of cars, light trucks and SUVs per capita, according to the state. In 2023, Kentucky’s automotive-related exports totaled $6 billion. There are more than 550 automotive-related companies in Kentucky employing more than 106,000 people.
Toyota Motor Manufacturing Kentucky in Georgetown, about 30 minutes outside Lexington, is the automaker’s largest vehicle manufacturing plant in the world where it produces 550,000 vehicles and 600,000 engines annually.
Since operations began in May 1988, more than 14 million vehicles have rolled off the factory’s assembly lines. Full-time employment there is 9,950, according to Toyota officials.
About an hour from Lexington in Louisville, Ford’s Kentucky Truck Plant employs 9,201 people. The same automaker’s Louisville Assembly Plant employs 3,330 people.
In April when the president unveiled his aggressive tariff and trade agenda, about 900 United Auto Workers members were laid off at five U.S. Stellantis plants, according to CNN. Their jobs producing car parts for plants in Canada and Mexico had been “temporarily idled” due to tariffs.
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