Ford Motor Co. says it will invest $273 million to convert its plant in Irapuato, Mexico, to the production of primary drive units for the company’s Mustang Mach-E electric vehicles.
The plant in Irapuato previously produced transmissions for gasoline-powered vehicles. The switch to producing the primary drive units for the Mustang Mach-E includes manufacturing the electric motor and the transaxle of the vehicle’s propulsion system.
“This new stage allows us to create synergy between plants and drive development in the country,” Ricardo Anaya, director of manufacturing at Ford of Mexico and Latin America, said in a news release.
The Mach-E is an electric mass-produced vehicle made in Mexico that is exported to about 40 countries in Europe and the Americas, as well as Australia, Ford said.
Ford (NYSE:F) sold 40,771 units of the Mustang Mach-E in the U.S. in 2023, a 3.3% year-over-year increase.
From January through July 2024, sales of the Mach-E have totaled 26,826 units in the U.S., compared to 17,977 during the same period last year.
Electric cars accounted for around 18% of all cars sold in 2023, up from 14% in 2022, according to the International Energy Agency (IEA).
“Electric car sales in 2023 were 3.5 million higher than in 2022, a 35% year-on-year increase,” the IEA said in a recent study on global EV trends.
Related: Can Mexico capitalize on US automakers’ pivot to electric vehicles?
In February, Ford renamed its plant in Irapuato to the Irapuato Electric Powertrain Center. The plant opened in 2017 and employs 700 workers. Irapuato is in central Mexico in the state of Guanajuato, which has one of the largest automotive production clusters in the country.
The Mustang Mach-E is manufactured at the Ford plant in Cuautitlan, Mexico, just outside Mexico City.
Ford joins a growing number of global automakers and parts suppliers making EV production moves in the southwestern U.S. and Mexico.
In January, American Battery Factory announced plans to build a $1.2 billion lithium iron phosphate battery factory in Tucson, Arizona.
BMW began construction in May of an $860 million electric battery-assembly facility at its factory in San Luis Potosi, Mexico. The batteries will be used for BMW’s next generation of electric cars.