Ford Motor Co. plans to produce an electric car in Mexico rather than make it in the U.S., a move that could allow the company to convert a suburban Detroit factory into a manufacturing hub for driverless vehicles, a top company official said.
The auto maker in January had said it would spend $700 million on its Flat Rock, Mich., assembly plant to serve as its main electric-vehicle production site. Instead, Ford plans to create a dedicated assembly line for electric vehicles at its plant in Cuautitlán, Mexico, with production to begin in 2020.
Moving production of electric vehicles to Mexico will likely improve the business case for battery-electric vehicles by producing them in a lower-cost country. Electric vehicles remain a niche vehicle and most auto companies lose significant amounts of money on each one they build. Redirecting electric-vehicle production south of the border is about more than shaving costs. The move will make room for the Flat Rock factory to serve as Ford’s “center of excellence” for autonomous vehicles, said Jim Farley, Ford’s president of global markets, in an interview.
The move could be risky, however, as President Donald Trump has in the past criticized auto makers for making vehicles in Mexico and shipping them to the U.S. Ford earlier this year canceled plans for a new factory in Mexico after pressure from Trump.
An expanded version of this report appears on WSJ.com.
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