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US Needs To Make Batteries On A Large-Scale To Avoid Chip-Like Shortage, Says Ford CEO

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US Needs To Make Batteries On A Large-Scale To Avoid Chip-Like Shortage, Says Ford CEO

Ford Motor Company (NYSE: F) CEO Jim Farley said that the United States must begin making batteries for electric vehicles to avoid supply disruptions like the ones caused by semiconductor shortages, Bloomberg reported.

What Happened: Farley, speaking at the Wolfe Research Auto Conference on Wednesday, said, “We need to bring large-scale battery production to the U.S., and we’ll be talking to the government about [that].” 

“We can’t go through what we’re doing with chips right now with Taiwan. It’s just too important,” he added.

See also: How to Buy Ford Stock

Global chip shortages have led to erosion of automotive earnings by one-third at Ford and rival General Motors Co (NYSE: GM), noted Bloomberg.

Why It Matters: This month, Ford battery supplier SK innovations received an adverse ruling in a dispute over trade secrets with fellow South Korean firm LG Energy Solution.

SK Innovation will be banned from importing certain batteries and components to the U.S for a period of five years, according to the ruling by the U.S. International Trade Commission.

Ford has been given an exemption and will be allowed to import battery components for its F-150 EV for a period of four years.

Segment leader Tesla Inc (NASDAQ: TSLA) has plans to make its new battery cell known as 4680 by itself but experts are of the view that it would be difficult for the company to handle production by itself. 

Panasonic (OTC: PCRFY) said last year it is not worried about Tesla starting its in-house manufacturing facility for batteries. 

There is an EV wave expected in the U.S. as President Joe Biden said last month that the entire federal fleet of vehicles would be replaced by electric vehicles.

On Wednesday, Oshkosh Truck Corp (NYSE: OSK) beat Workhorse Group (NASDAQ: WKHS) to win a 10-year contract to build delivery vehicles for the U.S. Postal Service.

See Also: Ford Could Get A Piece Of Oshkosh USPS Contract As Engine Supplier: Detroit Free Press

Price Action: Ford shares closed nearly 5.6% higher at $12.27 on Wednesday and fell 0.33% in the after-hours session. 

Click here to check out Benzinga’s EV Hub for the latest electric vehicles news.

Image: Jared Murray via Unsplash

 

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