Ford is expanding production of large trucks in Canada

DETROIT – Ford Motor will expand production of its Super Duty large trucks at a Canadian plant that was previously slated to become an all-electric hub.

The new plans include an investment of about $3 billion to expand Super Duty production, including $2.3 billion at Ford’s Oakville Assembly Complex in Ontario, Canada, Ford said Thursday. The remaining investment will be used to increase production at supporting facilities in the US and Canada, the company said.

Ford currently produces Super Duty trucks – the larger siblings of the full-size F-150 pickup that are used heavily by commercial and business customers – at plants in Ohio and Kentucky.

Ford said the Canadian plant, which is expected to be operational in 2026, will add capacity of about 100,000 units a year.

“The Super Duty is a vital tool for businesses and people around the world, and even with our Kentucky truck plant and Ohio assembly plant running out of capacity, we can’t keep up with demand,” said the CEO. of Ford, Jim Farley. “This move benefits our customers and benefits our Ford Pro commercial business.”

Investors responded favorably to the news, sending Ford stock to a new 52-week high before shares fell later in the day amid a broader market decline.

UBS’s Joseph Spak was among analysts who applauded the additional investment in the highly profitable Super Duty models compared to money-losing electric vehicles amid slower-than-expected adoption of electric cars and trucks.

“We believe this demonstrates management’s confidence in more sustainable demand for Ford Pro vehicles,” he said Thursday in an investor note. “THE [internal combustion engine] Investments on top of EV investments should be viewed positively.”

Ford had previously announced plans to invest $1.3 billion in the Canadian plant to produce EVs. Those plans included a new three-row SUV, which the company recently delayed until 2027.

The announcement comes weeks after Farley said fully electrifying “big, huge, huge” vehicles like Ford’s Super Duty trucks “will never make money.”

Ford said it has plans to “electrify” its next-generation Super Duty trucks, but declined Thursday to reveal additional details.

The company said the move supports Farley’s Ford+ plan for profitable growth, including maximizing Ford’s manufacturing footprint. It’s the latest withdrawal for the restructuring plan that includes electric vehicles, but the automaker said it still plans to produce the three-series EV at an unspecified plant starting in 2027.

The Ford+ plan initially focused heavily on electric cars when it was announced in May 2021 during the company’s first investor day under Farley, who took the helm of the automaker in October 2020.

At the time, there was considerable optimism about the adoption of all-electric vehicles and the potential profitability that did not materialize as quickly as many expected.

Ford’s original plan called for nearly half of its global sales to be electric by 2030, fueled by an investment of more than $30 billion in EVs by 2025. It’s unclear how much capital the company has spent on electrics to date. Its plans have changed several times, and the “Model e” EV unit lost $4.7 billion in 2023.

While Ford’s EV unit is losing billions of dollars, its Ford Pro commercial business, including Super Duty trucks, earned $7.2 billion before interest and taxes in 2023.

The Ford+ plan also included a target of an 8% earnings before interest and tax, or EBIT, margin for the EV unit by the end of 2026. Ford withdrew that target earlier this year. It would be a huge rebound from a roughly negative 40% profit margin in 2022.

Ford said the new Super Duty production will initially provide about 1,800 jobs in Canada at the Oakville Assembly Complex, 400 more than would initially be needed to produce the three-series EV.