Why is Ford betting on LFP cells and modular assembly?

Ford is pivoting its electric vehicle strategy toward lower-cost components and a reengineered manufacturing flow after steep losses in its EV division. The company is targeting faster builds, tighter quality, and more affordable models to regain momentum against competitors.

At the center of the plan are lithium iron phosphate batteries to reduce pack costs and a modular three-line assembly that breaks the vehicle into major subassemblies before joining. Ford believes the combined approach can trim complexity, improve throughput, and sharpen pricing power.

What is modular three-line assembly?

Instead of a single, long assembly line, Ford will produce the front module, rear module, and battery pack and cab on three separate lines. Each subassembly can be built and validated in parallel, then brought together for the final join.

This method aims to reduce bottlenecks and boost first-time quality by isolating major systems earlier. Ford targets roughly a 15 percent cut in assembly time for pickups once the new flow is fully implemented and stabilized on the factory floor.

Did you know?
Lithium iron phosphate batteries avoid nickel and cobalt, often enabling longer cycle life and lower cost per kWh, which is why they are increasingly used in mainstream EVs and energy storage systems.

Why LFP batteries now?

Lithium iron phosphate packs are generally cheaper because they avoid nickel and cobalt, enabling a lower bill of materials. That can translate into more accessible sticker prices or stronger margins in cost-sensitive segments.

LFP is well suited to mainstream EVs that prioritize cost, durability, and predictable range over maximum energy density. Ford expects the chemistry shift to support the economics of its next wave of electric models.

The product cadence: mid-size now, big truck later

A new mid-size, four-door electric pickup is planned for 2027, designed to hit a broader market with a lower cost base. The company is delaying a larger electric pickup by about a year until 2028 to align the product with the new cost and manufacturing playbook.

Sequencing a more affordable truck first gives Ford time to scale LFP supply, refine the modular build, and lock in supplier economics before launching the higher-cost flagship model.

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Retooling Louisville for the next phase

Ford will reconfigure its Louisville, Kentucky, plant to host the modular assembly for future EVs. The facility will shift away from current internal combustion production as the company transitions its footprint to support the new process.

The investment includes new tooling, line layouts, and quality systems tuned for parallel subassembly and rapid final integration. Ford expects the move to shorten learning curves for subsequent vehicle launches.

Lessons from recent EV setbacks

The company’s EV unit has absorbed heavy losses amid slower demand growth and price competition. The reset emphasizes unit economics over rapid expansion, with a focus on cost discipline and scalable designs.

By dialing back near-term complexity and prioritizing cost-down technologies, Ford is attempting to de-risk future programs while preserving the flexibility to respond as the market evolves.

Competitive pressure and differentiation

Rivals leaned on standardized batteries and tightly integrated supply chains to manage costs. Ford’s answer blends manufacturing redesign with a chemistry pivot that favors affordability and durability across high-volume nameplates.

If the modular approach delivers consistently shorter build times and better first-pass yield, Ford can pass savings to buyers or bank margins, improving its standing in price-sensitive segments.

What success looks like

A successful rollout would show lower factory hours per vehicle, improved warranty performance, and competitive transaction prices without eroding contribution margins. Early evidence would include on-time launches and stable supplier ramps.

If the mid-size pickup lands on cost and quality targets, it could anchor a lineup of more attainable EVs, setting the stage for profitable scale when the larger electric truck arrives in 2028.

Ford is betting that engineering out costs at the battery and factory level is the clearest route back to competitiveness. With modular assembly and LFP packs as the core levers, the company aims to turn its EV program from a drag on earnings into a durable growth engine.