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Ford (F) to Ramp Up EV Game in Europe, Invest in Spain Plant

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Ford (F - Free Report) recently announced that it will build the new 2.5-litre Duratec hybrid engine at its Valencia Engine Plant in Spain from late 2022. The automaker further noted plans of investing an additional 5.2 million euros in the plant in order to enhance its battery pack assembly capacity.

The 2.5-litre Duratec hybrid engine will be developed for the European market and integrated into the Kuga plug-in hybrid model, along with the Kuga, Galaxy and S-MAX full-hybrid models. The 2.5-litre Duratec hybrid engine is currently imported into Europe from Mexico, where it is built at Ford’s Chihuahua Engine Plant. From late 2022, it will be manufactured in Valencia, along with the 2.0-litre and 2.3-litre EcoBoost petrol engines.

Also, Ford’s investment of 5.2 million euros to support the increased battery pack assembly capacity at Valencia is in addition to the initial investment of the 24 million euros announced in January 2020. The extra capacity will aid in meeting the rising demand for electric vehicles (EV).

Ford Outlines Electrification Plans in Europe

Amid the heightening climate-change concerns and tightening government regulations on carbon emissions, automakers like Tesla (TSLA - Free Report) , General Motors (GM - Free Report) , Volkswagen (VWAGY - Free Report) and many others have been rapidly shifting gears to EVs.

Amid this transforming scenario, Ford recently announced that it would invest $22 billion in electrification through 2025, nearly twice the amount it had previously committed to EVs. Additionally, the company has vowed that by mid-2026, its entire passenger vehicle range in Europe will be carbon-neutral (all-electric or plug-in hybrid) and fully electric by 2030.

European consumer preferences are evolving with customers getting more inclined toward sport utility vehicles (SUVs) and crossovers. In 2020, 39% of Ford’s passenger vehicle sales were SUVs and crossovers compared with the 31% seen in 2019. Moreover, customers are more intrigued by the green transportation solutions, with more than 50% of Kuga owners opting for a hybrid option.  

Resultantly, Ford has planned to phase out the production of its Mondeo sedan, its flagship sedan once upon a time, in Europe by end of next March. Mondeo was launched in the U.K. in 1993 and since then, its sales have reached five million units, backed by its popularity with both families and businesses.

This decision to halt the Mondeo production comes in as the U.S. auto giant is streamlining its European product portfolio in a bid to shift toward electric models and SUVs.

Additionally, the company is set unveil fresh EV models in Europe, with the all-electric Mustang Mach-E just being rolled out and the Mustang Mach-E GT scheduled for later this year.

Furthermore, with the latest investment in the Valencia Engine Plant, Ford has showcased its commitment to advancing the company’s passenger vehicle line-up in Europe with the focus being on all-electric and hybrids models of the Kuga, Puma and Explorer. This represents another milestone for the company in its electrification journey as the European market is crucial to its growth and success.

Recently, Ford announced that its next-generation Ford Transit Custom range for the European market will go into production in Turkey in the first half of 2023. The range will include an all-electric model in addition to hybrid, mild hybrid and conventional engine versions.

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