Ford to Move Electric SUV Production to Mexico

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Ford (NYSE:F) plans to produce a future electric auto in Mexico rather than in the USA, reversing its January announcement that the Flat Rock, Mich., assembly plant would serve as its main electric vehicle production site, WSJ reports.

All the major automakers make some of their cars for the US market in Mexico, and all depend on Mexican parts suppliers for cars built at USA plants.

The automaker then made plans to build autonomous and electric vehicles at Flat Rock Assembly alongside the Ford Mustang and Lincoln Continental.

The news was celebrated by the incoming Trump administration, which claimed that it had convinced US automakers to bring jobs home. It scrapped plans for a new small auto plant in Mexico because demand for them is so weak, not to shift any manufacturing back to the U.S. The driverless auto is to debut in 2021.

Likewise, moving the electric crossover to the company's Cuautitlan, Mexico plant will likely enhance already-low margins on the vehicle.

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Ford originally earmarked US$700 million for the EV in its MI plant, which would have created about 700 new jobs, but it now plans to invest even more for its autonomous development there.

GM unveiled plans last week to introduce its own on-demand ride-sharing service in several United States cities in 2019, using self-driving versions of the battery-powered Chevrolet Bolt.

The company, along with every other automaker, is making a major push into self-driving auto technology. But it also entails the risk that the Trump administration could put steep taxes on new cars built in Mexico as it seeks to renegotiate the NAFTA trade deal.

According to Alan Hall, a Ford spokesman, the Detroit-area plant that was set up to manufacture EVs is being revamped to produce the first autonomous vehicle in MI. The automaker will begin testing the vehicle in an unnamed city next year.

Earlier this year Ford confirmed plans to introduce a fully electric SUV in 2020. Ford's autonomous business will "serve leading companies, such as Lyft, in the movement of people and goods".

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