After Tesla, Ford Cancels Plan To Make Electric Cars In India; Plans To Sell Both Gujarat & Chennai Factories

Ford has changed course and will not be making EVs in India for the global markets.

Communication With Plant Workers

It communicated its decision to employees in the Chennai plant earlier on Thursday.

The Chennai plant has about 2,700 associates ( permanent workers) and about 600 staff.

The company management will discuss with the union regarding compensation for the workers upon plant closure.

Compensation talks were halted earlier when Ford decided to use the plant for EV exports.

PLI Application To Be Withdrawn

To that end it had applied and qualified for the Production Linked Incentive Scheme but may withdraw its application now that it will no longer invest in India.

A spokesperson said that the decision was made after careful review and that Ford remains grateful to the Government for approving its proposal for the PLI scheme.

After announcing its exit last September, it continued to sell its high-end global models such as the Mustang and Mustang Mach-E electric SUV through CKD and CBU routes.

Indian Car Owners To Receive Continued Support

Owners of the Figo, EcoSport, Aspire, Freestyle and Endeavour in India will continue to receive parts support from Ford service depots in Delhi, Chennai, Mumbai, Sanand and Kolkata

As part of its business restructuring in India, it had continued to explore possible alternatives for its plants, including applying for the scheme.

The PLI scheme would help it make use of one of its plants as a potential EV manufacturing base.

Sale Of Both Plants

The company will likely go back to its original plans of selling both its factories in Sanand, Gujarat and Chennai.

Talks for the Sanand plant sale to Tata Motors is advancing and it is entertaining multiple suitors for its Chennai factory.

A Ford union official said that the Chennai plant will start to close from June onwards.

Impact Mitigation

The plant currently rolls out EcoSport for the export market.

The employees want the future buyer of the plants to hire them.

The spokesperson said that the company will work closely with unions and other stakeholders to formulate an equitable and balanced plan to mitigate the impacts of restructuring.