Ford invests up to £230m to make electric vehicle parts at British factory

Deal includes financial support from UK government as country ramps up automotive electrification

Ford's plant in Halewood, Merseyside. The company plans to transform the Halewood plant to build electric power units for future Ford vehicles. PA

Car maker Ford will invest up to £230 million ($316m) to produce components for electric cars at its existing plant in Merseyside, England, after the British government pledged financial support to accelerate automotive electrification.

The Halewood factory near Liverpool will be repurposed to build electric power units from mid 2024 that will gradually replace the manufacturing of combustion-engine transmissions.

The factory will become the first European in-house location to make electric vehicle parts for Ford, protecting 500 jobs at the site, which was facing uncertainty as the car maker moves towards electrifying vehicles.

“This is a very important announcement for Halewood as it will secure the future of the facility along with introducing new technology for Ford vehicles in Europe,” said Stuart Rowley, president of Ford's European operations.

The US car manufacturer pledged earlier this year to only sell fully electric cars, vans and lorries in Europe by 2030, putting its electrification plans ahead of some of its larger competitors in the region.

The investment at Halewood is a boon for the UK’s automotive industry and comes at a time that Britain faces a wave of shortages amid the supply chain crisis, including semiconductors, that has hampered car production.

Only 37,000 cars were manufactured in August in Britain, a 27 per cent decline on the same month a year ago, because of the shortage.

While a large portion of the investment in Halewood is being made by Ford, an undisclosed amount is coming from the government’s Automotive Transformation Fund, set up to encourage investment in electric vehicle manufacturing.

The British government tends to provide about 10 per cent of the total investment value for automotive companies.

Other manufacturers to receive financial aid from the fund include Nissan, which said in July it would expand vehicle production at its car plant in Sunderland.

Meanwhile, Nissan’s partner Envision AESC plans to build a £400m battery gigafactory in Sunderland.

Britain has attracted about £6 billion of green investment since UK Prime Minister Boris Johnson unveiled his 10-point plan for “a green industrial revolution" in November last year.

More than £5.8bn of that figure is from foreign investment in green projects, with total capital helping to create at least 56,000 jobs in the UK’s clean industries, the Department of International Trade said.

Business Secretary Kwasi Kwarteng said Ford’s investment was “further proof that the UK remains one of the best locations in the world for high-quality automotive manufacturing”.

“In this highly competitive global race to secure electric vehicle manufacturing, our priority is to ensure the UK reaps the benefits,” he said.

Ford will produce about 250,000 electric power units at the plant, adding to a growing trend among car makers to manufacture electric car components themselves, rather than relying on suppliers.

“This is a part of the plan to in-source strategic parts of the value chain of electric vehicles,” said Mr Rowley.

He said the plans were a “huge vote of confidence in the workforce”.

Ford is one of the UK's largest exporters, exporting engines and transmissions from its factories to more than 15 countries on six continents – with overseas sales generating about £2.5bn annually.