In-House Ford EV Motor Production Will Cut Down On Costs

Ford CEO Jim Farley has long touted the benefits of moving the production of various EV components in-house, noting that such a move saves jobs versus sourcing those parts from suppliers, given the fact that it takes around 40 percent less labor to make an electric vehicle compared to an ICE model. Over the past couple of years, we’ve seen this concept in action, as the automaker has shifted the production of  certain Ford EV parts to its own plants – including Ford Mustang Mach-E drive units, which it’s building at the Irapuato Electric Powertrain Center (IEPC) in Mexico – a move that’s expected to also save on costs.

According to Automotive News, moving Ford EV motor production in-house should save the automaker a significant amount of money versus outsourcing that work to suppliers, in fact. “We believe we can be very efficient making drives ourselves,” said Kieran Cahill, Ford’s vice president for industrial operations in Europe. “We have a very high productivity per employee.” Cahill didn’t specify how much money this move would save The Blue Oval, but he did note that shipping these units from the UK to Turkey also reduces logistics costs versus sending them from the U.S., as is the case currently.

Along with Mach-E drive units, Ford has also begun building what it calls “three-in-one” units – consisting of an electric motor, transmission, and inverter – for the recently-revealed Ford Puma Gen-E and E-Transit Custom (set to replace the van’s U.S.-sourced unit) this month in the UK. The automaker invested around $483 million into its Halewood plant in that country to equip it for the production of these electric drives.

Ford’s decision to insource driveline production for the Mach-E did result in a lawsuit being filed by tier two supplier VCST Industrial Products against BorgWarner Inc. earlier this year, however. According to the lawsuit, BorgWarner contracted VCST to make pinions for its integrated drive module after it won the contract to produce drive units for the Mach-E. The company began supplying those units back in 2019, and in 2022, received a new contract to build an additional one million pinions each year for seven years. However, in late 2023, BorgWarner canceled its program with VCST “due to Ford’s ‘sudden’ in-sourcing of that program in house,” the lawsuit claims.