Ford India Comeback Update: To Build Electric Cars In Second Innings

Ford Motor Company is finally returning to India, after a three-year hiatus. Upon its re-entry, it seems to have plans of focusing on electric vehicles, specifically with export intents. It wishes to utilize India’s potential as a low-cost manufacturing hub to scale its global EV business.  This marks a significant shift from Ford’s previous operation strategies in India, which were centred around domestic sales of internal combustion engine (ICE) vehicles.

Ford’s Plans For India

Ford will likely do domestic business with CBU or CKD units of ICE vehicles. The rest of the focus will be on manufacturing EVs for exports. Experts say that the American giant will have its priority set on EV exports and there will likely be caps on the ICE imports.

The manufacturer is trying to be future-ready with the sharp shift towards EVs. Ford EVs are currently being sold in countries like the UK, Spain, Turkey, Tennessee, America etc- broadly speaking, the European And American markets. A knowledgeable source reportedly told the media “Ford has realised that 2025 will be the turning point for the EV market in India. Building petrol or diesel vehicles will not be a profitable venture anymore, which is why Ford is revamping its Chennai plant to create a dedicated assembly line for battery-driven models.”

This means that the Chennai plant, which has an annual production capacity of 200,000 vehicles and 340,000 engines, will soon be converted into an active EV factory. It had stopped operations in July 2022 following Ford’s exit and had since produced only car parts. Ford has submitted a letter of intent to the Tamil Nadu government, for restarting the plant and further to repurpose it for EV exports. The company’s leadership reportedly met Tamil Nadu CM MK Stalin regarding the same.

Ford will first work towards establishing a strong supplier network for EV components, including battery parts. Once this is in place, the local production of EVs for export will begin. In the later stages, these will be considered for sale in India. Details of the type of manufacturing and retail business will be out in the coming months.

Ford’s exit from India in September 2021 was seen as a misstep, given the country’s status as the world’s third-largest automotive market. The reasons for its piling losses were obvious. The new world-class production facility and poorly executed finances together with low sales led to rising debts for the company.

Industry experts believe that Ford’s decision to focus on EVs is a well-considered move that could ensure long-term success here. India currently has a very potent market for electric vehicles. Multiple new manufacturers are waiting to step in with new products as well.

Ford was one of the few OEMs that mastered localisation in India. Their previous portfolio which included the Figo, EcoSport and Aspire, was proof of this. They could take up a similar route with BEVs as well. This will also enable them to price these products properly.

The decision to emphasize BEVs aligns with Ford’s global sustainability goals. It had previously announced to go all-electric in the future. However, in more recent news, Ford ditched these plans and said that they would focus on hybrids instead.

However, Ford is working towards reducing carbon emissions from its manufacturing plants and transitioning to renewable energy sources across all facilities by 2035. Additionally, it is collaborating with suppliers to ensure they meet stringent environmental standards, enhancing the sustainability of the entire supply chain.

Jobs And Manpower

Ford currently has around 12,000 employees working in its Global Business Operations in Tamil Nadu. It plans to add 2,500 to 3,000 more jobs over the next three years. India represents Ford’s second-largest salaried workforce globally, and the new focus on BEVs is expected to play a crucial role in the local economy and exports. Even before making its market exit, Ford employees were paid best-in-business salaries.

Product Plans

Ford is taking a cautious but strategic approach upon its India return. Initially, the focus will be on exporting EVs while in the long run, they will be sold in the Indian market. In the ICE space, the Ford Everest will be the first to launch in India. The manufacturer could also launch the Ranger pickup in the future.

Ford’s EV Sales Plunging Globally!

Yes, stats indicate that the manufacturer’s EV sales have lately been on the decline. Even though the US numbers remain strong, Ford’s EV sales in the UK are relatively low. It has plans to introduce multiple new models in the European market in the not-so-distant future. The Chennai factory will mostly have a big role to play in this expansion.

The EV slowdown isn’t just limited to Ford alone. The general market winds in many first-world countries now favour hybrids more than electric vehicles. Many tend to say no to electric vehicles due to their usability limitations. Hybrid cars, on the other hand, are finding more takers. It is thus logical to expect that the Chennai factory will not just produce pure EVs but hybrids as well, in the future.