Ford Will Build Electric Cars in Mexico, Shifting Its Plan

Ford Will Build Electric Cars in Mexico, Shifting Its Plan


Sherif Marakby, Ford’s vice president for autonomous vehicles and electrification, said Thursday that the company had altered its plans for the Michigan plant — in Flat Rock, 25 miles southwest of Detroit — because it now expected the market for self-driving cars for taxis and delivery fleets to grow rapidly after it rolls out its first model in 2021.

“We want to make sure we have the capacity at Flat Rock when we launch,” he said in an interview. “We are very optimistic that we will grow the volume in the autonomous business.”

Ford now plans to invest $900 million in the Flat Rock location, up from $700 million. The company said the retooling for autonomous vehicles would create 850 jobs there, 150 more than it previously expected.

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Producing electric cars in Mexico will enable Ford to take advantage of lower labor costs and improve the “fitness” of that business, Mr. Marakby said.

Ford’s change in plans was reported by The Wall Street Journal and later confirmed by the automaker.

Electric vehicles tend to be expensive to build and generate thin profit margins or even lose money because batteries remain costly and sales volume low. Auto wages in Mexico rarely exceed $10 an hour, compared with about $29 an hour in the United States.

“If you’re worried about your margins on your E.V., moving production to Mexico is not a bad idea,” said Mike Ramsey, an automotive analyst at Gartner.

Ford plans to begin assembling a small, battery-powered sport-utility vehicle in a plant in Cuautitlán, north of Mexico City, in 2020. The vehicle is supposed to go 300 miles before needing to recharge its battery, giving it a greater range than any electric cars now on the market.

Ford plans to follow that model with at least 12 electric vehicles as part of a broader, global strategy. Ford and other automakers expect sales of electric cars to take off in the years ahead as China, European Union countries and others push automakers to cut tailpipe emissions.

Ford’s shift drew no immediate public comment from President Trump. While campaigning last year, he criticized the company repeatedly for its plan to build a small-car plant in Mexico. He also criticized G.M. for importing Chevrolet hatchbacks from a Mexican plant.

In January, in the days leading up to Mr. Trump’s inauguration, Ford announced that it was canceling the new plant and investing in Flat Rock instead. That drew compliments from the president-elect.

In May, however, Ford ousted its chief executive, Mark Fields, and replaced him with Jim Hackett. Under Mr. Hackett, Ford seems to have taken a different tack. In one of his first moves, he set a plan to import Focus compacts into the United States from a plant in China.

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