Ford Delays Its EV Investment In Spain

The company revised its outlook for the European market.

By: Mark Kane

Aug 25, 2022 at 12:57pm ET

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Ford has put on hold its EV-related investment plans at the manufacturing plant in Valencia, Spain, which was first announced a few months ago.

According to Reuters, the company revealed this week that it is delaying its production investments in Spain, explaining its decision as a "revised outlook for Europe."

The site in Valencia was selected in June, as the preferred site to assemble electric vehicles based on a "next-generation electric vehicle architecture."

We assume that Ford is worried about the business outlook for Europe, affected by the Russian invasion of Ukraine, and has decided to slow down and wait. The news comes after the announcement about significant layoffs (3,000 salaried and contract jobs, mostly in North America and India).

According to the report, Ford previously applied for Spain's EU pandemic relief funds to support the upcoming investment but withdrew its application.

"Ford had applied in May for Spain's EU pandemic relief funds and had been allocated 106 million euros in a first provisional allotment, but withdrew its application on Tuesday ahead of a deadline for potential changes, the Industry Ministry said."

We guess that the project will be delayed at least beyond 2025. By that time, Ford is expected to have 9 all-electric models on the market in Europe (passenger cars and commercial vans).

Because the company intends to switch to electric cars in Europe by 2030, the question about the future of the plant in Valencia remains open.

Even more interesting is the topic of the factory in Saarloius, Germany. According to media reports, Ford might even sell the plant to another OEM (currently it makes the Focus model).

What do you think?

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The other German plant in Cologne is secured thanks to two MEB-based electric models confirmed for production, starting in 2023 and 2024.

Overall, the business environment is challenging right now and makes the switch from internal combustion engine cars to battery-electric cars pretty difficult. Rising costs of materials and energy, combined with general uncertainty, make any planning difficult.