Ford Motor Co is Investing $1 Billion to Modernize its Factory in Germany, Will Only Sell Fully-Electric Passenger Vehicles in Europe by 2030

author: Eric Walz   

Ford's factory in Cologne Germany will be converted to produce electric vehicles.

U.S. automaker Ford Motor Company is ramping up its plans for electrification in Europe. The automaker announced on Wednesday that its entire European passenger model lineup will be 100% electric by 2030, which is one of the most ambitious goals of any of the world's automakers.

Leading up to 2030, the automaker said that all of its vehicles on sale in Europe will at least have a one zero-emissions option, which includes a fully-electric or plug-in hybrid version (PHEV) by 2026. 

To achieve its goals, Ford is investing $1 billion to modernize its vehicle assembly facility in Cologne, Germany, which is one of its largest vehicle manufacturing factories in Europe. The facility also serves as the headquarters to Ford of Europe. 

The $1 billion investment will transform the existing vehicle assembly operations into the Ford Cologne Electrification Center dedicated to the manufacturing of fully-electric vehicles. It will be Ford's first dedicated EV factory in Europe. 

A significant part of Ford's investments also be to electrify roughly two-thirds its commercial vehicles, such as delivery vans. Ford said its entire commercial vehicle range will be zero-emissions capable, all-electric or plug-in hybrid, by 2024, with two-thirds of Ford's commercial vehicle sales expected to be fully-electric or plug-in hybrids by 2030.

The news comes after Ford reported a profitable fourth quarter for 2020 in Europe. 

"We successfully restructured Ford of Europe and returned to profitability in the fourth quarter of 2020. Now we are charging into an all-electric future in Europe with expressive new vehicles and a world-class connected customer experience," said Stuart Rowley, president, Ford of Europe.

2020 marked the sixth successive year that Ford was the leading commercial vehicle sales brand in Europe. Ford said that growth in its commercial vehicle business is key to its European profitability.

Ford's plans in Europe are much more aggressive than its current plans in the U.S., where the EVs make up around 2% of the millions vehicles sold each year. However, in Europe there is a much bigger push to get drivers to switch from internal engine powered models to electric vehicles in order to meet the goals of the Paris Climate Agreement. 

Ford is investing at least $22 billion globally in electrification through 2025, nearly twice the company's previous EV investment plans. Ford's U.S. rival General Motors has also committed to investing up to $27 billion to develop electric models for its global portfolio.

With electric automaker Tesla Inc. now the world's most valuable car company, the auto industry's rapid switch to EVs is putting legacy automakers like General Motors and Ford in a position where they are scrambling to catch up to Tesla, or risk losing sales over the next decade as the rest of the world's automakers electrify their model lineups.

Central to Ford's transformation of its operations in Europe were a $1 billion investment over the past two years to  improve structural costs, addressing underperforming markets, as well as the creation of a more targeted vehicle line up within three customer-focused business groups aimed at the commercial markets, the company said.

To accelerate its commercial vehicle business growth in Europe, Ford will build an entire ecosystem around connected services. The services will be co-developed with customers to ensure that their business needs are fully met.

Services include productivity services, including FordPass Pro, a dedicated smartphone app to manage for fleets of up to five vehicles. Ford launched FordPass Pro in 2019 to help small business customers keep their fleets running efficiently. With Ford Pass Pro, customers can remotely lock, check vehicle health, book maintenance services and view the locations of up to five vehicles from the app.

Ford is also launching a new service called "Ford Fleet Management" which was created by Ford and French fleet management company ALD Automotive last year to help fleet customers maximize productivity when their vehicles are on the road.

Ford and U.S. tech giant Google also announced the establishment of a new collaborative group called Team Upshift. The group's mission is to drive disruptive, data-driven opportunities for Ford's future connected vehicles.

Team Upshit will combine Ford's in-house capabilities to transform the ownership experiences and services for both the company's commercial and passenger vehicle customers.

"We will offer an exceptional range of electrified vehicles, supported by customer-centric digital services and experiences, allowing our customers to come with us on the journey to a fully electric future, starting right now with the launch of the all-electric Mustang Mach-E. In combination with our leading commercial vehicle business, this will form the basis of a sustainably profitable Ford business in Europe."

Ford also confirmed that its first fully-electric passenger vehicle for European customers will be produced at the Cologne facility from 2023, with the potential for a second all-electric vehicle built there under consideration.

"Our announcement today to transform our Cologne facility, the home of our operations in Germany for 90 years, is one of the most significant Ford has made in over a generation. It underlines our commitment to Europe and a modern future with electric vehicles at the heart of our strategy for growth," Rowley said.  

Ford said it will share additional details of the transformation of the Cologne site into an electric vehicle factory over the coming months.  

Eric Walz

Originally hailing from New Jersey, Eric is a automotive & technology reporter covering the high-tech industry here in Silicon Valley. He has over 15 years of automotive experience and a bachelors degree in computer science. These skills, combined with technical writing and news reporting, allows him to fully understand and identify new and innovative technologies in the auto industry and beyond. He has worked at Uber on self-driving cars and as a technical writer, helping people to understand and work with technology.