DETROIT—Ford Motor Co.'s broad investment in electrification includes money for a slew of hybrids, plug-ins and battery-electric vehicles, but nothing in one area where its biggest rivals are spending billions: battery production.
Even with the Mustang Mach-E coming this year and the F-150 EV and Transit EV expected in 2022, Ford executives say they're content to source batteries from suppliers instead of making their own.
It's the latest fork in the road for auto makers as they steer toward an electric future.
Tesla poured $5 billion into the Nevada Gigafactory that churns out lithium ion batteries for its entire lineup in partnership with Panasonic. General Motors this year started construction on an Ohio plant to make its proprietary Ultium battery cells through a $2.3 billion joint venture with LG Chem. Volkswagen and Daimler also are investing in battery facilities.
Ford executives insist their plan allows for more flexibility if EV demand falters or a chemistry breakthrough makes today's battery technology obsolete. They also note that suppliers have boosted capacity to meet the wave of EVs arriving in coming years.
"The supply chain has ramped up since Elon (Musk) built his Gigafactory, and so there's plenty there that does not warrant us to migrate our capital into owning our own factory," outgoing Ford CEO Jim Hackett said on the company's second-quarter earnings call. "There's no advantage in the ownership in terms of cost or sourcing."
The divergent strategies have huge financial implications. Tesla's stock jumped last week after CEO Musk hinted that the auto maker would reveal improved battery capacity in September. Wall Street analysts have spoken glowingly about GM's Ultium technology and its potential to support a spinoff EV business.
Sam Abuelsamid, a principal e-mobility analyst at Guidehouse Insights, says both strategies have advantages.
"I don't know that there is a definitively better path," he said. "If you source your own, you'll have a guaranteed supply, but you're potentially stuck with that supply if you can't sell them. If you source from suppliers, if there's a technology breakthrough, you've left yourself flexibility and haven't made a big investment in something that may be prematurely obsolete. It's a bit of a crapshoot either way you go."
Ford's strategy is largely dictated by the size of its EV ambitions.