Ford Commits $2 Billion to Electrify Kentucky Plant for Affordable EVs
Ford Motor Company allocates nearly $2 billion to retool its Kentucky Truck Plant in Louisville for electric vehicle production. The investment targets creation of more affordable and profitable EVs to compete against rivals like Tesla and Chinese imports. The facility currently assembles the ‘F-150’ and ‘Super Duty’ trucks, with EV output slated to begin in 2026.
The retooling will introduce assembly lines for next-generation electric trucks and SUVs on Ford’s modular EV platform. This platform supports battery packs from 40 kWh to 132 kWh, enabling ranges from 300 to 500 miles. Production capacity will reach 500,000 units annually, focusing on models priced under $40,000 before incentives.
The move responds to softening EV demand after the $7,500 federal tax credit expired in September 2025. U.S. EV sales dropped 15 percent in October 2025, with market share falling to 7.2 percent from 9.6 percent in Q3. Ford’s EV sales declined 12 percent year-over-year in Q4, prompting a shift toward cost-efficient manufacturing.
Kentucky operations employ 8,500 workers, with the upgrade preserving 4,000 jobs while adding training for 1,200 in battery assembly and automation. The plant’s expansion includes installation of 800-volt charging architecture for faster production testing. Local suppliers will receive $500 million in contracts for components like inverters and thermal management systems.
Rivals face similar pressures. General Motors paused production of the ‘Bolt EUV’ due to low uptake, while Stellantis idles its Windsor plant for ‘Pacific’ EV retooling. Tesla reports a 5 percent sales dip in November 2025, attributing it to Model 3 price cuts eroding margins. Chinese brands like BYD gain ground with sub-$30,000 imports, capturing 3 percent U.S. market share.
Ford’s strategy emphasizes vertical integration, with 70 percent of battery materials sourced domestically through partnerships with Redwood Materials. This reduces reliance on overseas supply chains vulnerable to tariffs, which rose 25 percent on EV components in 2025. The company projects EV profitability by mid-2026, targeting 600,000 annual sales.
Environmental benefits include reduction of 2 million metric tons of CO2 emissions yearly from electrified output. The plant will incorporate solar arrays generating 10 megawatts, offsetting 20 percent of energy needs. Kentucky’s governor highlights the investment as bolstering the state’s $10 billion auto sector, which supports 100,000 jobs.
Challenges persist in scaling. Industry-wide battery shortages limit output to 80 percent capacity through 2027. Consumer surveys show 45 percent cite charging access as a barrier, with only 168,000 public stations nationwide. Ford plans to deploy 50,000 home chargers via dealer incentives in 2026.
The initiative aligns with broader industry pivots. Volkswagen invests $1.5 billion in its Tennessee plant for ‘ID. Buzz’ production, while Rivian secures $800 million for ‘R2’ SUV lines. These efforts aim to recapture 20 percent market share lost to hybrids, which surged 25 percent in sales post-tax credit elimination.
Ford executives stress adaptability, with hybrid variants sharing the new platform for transitional models. This dual approach addresses 60 percent of buyers preferring plug-in options amid infrastructure lags. The Kentucky project positions Ford to launch three new EVs by 2027, including a compact truck rivaling the ‘Rivian R3T’.
