Ford Secures Major £1bn Boost as UK Backs EV Expansion Plans

The UK Government has unveiled plans to support a £1 billion loan to Ford UK as part of a broader effort to accelerate the company’s transition to electric vehicle production and secure thousands of jobs across its British operations. The funding will be backed by an export development guarantee, with UK Export Finance agreeing to cover 80% of the total facility. That amounts to £800 million underwritten by the government.

Citi is leading the deal along with a syndicate of commercial lenders. The funds will be used to bolster Ford’s engineering and manufacturing capabilities for electric and connected vehicles. This includes continued investment in the company’s Halewood facility, which is being retooled to produce electric motors, as well as expanded support for its research and development centre in Essex.

Ford employs more than 5,500 people across the UK and has already committed over £450 million toward EV-related upgrades since 2020.

This latest government-backed financing marks the third such agreement between Ford and UK Export Finance in just four years. Combined, the total value of these loans now reaches nearly £2.4 billion. Previous support packages included a £625 million loan for global R&D work in Essex and a £750 million facility to scale up production of EV power units.

Chancellor Rachel Reeves said: “Ford has been the pride of Essex since 1911, over a century of innovation and industry. The R&D centre in Basildon employs thousands of people in well-paid, highly skilled jobs.

“This £1bn loan guarantee is a major boost for Britain’s auto sector. It will help develop world-leading products, open new export markets, and secure jobs. This is our Plan for Change in action – delivering growth and putting more money in people’s pockets.”

Ford Britain’s chair Lisa Brankin added: “Recent investments in the UK have proved crucial to our European operations and have expanded our UK export capability, on top of supporting Ford’s investment in an all-electric product line-for Europe.

“This new UKEF facility will play an important role in supporting our UK exporting footprint, especially amid the continued uncertainty in the trade landscape and the disconnect between EV targets and customer demand.”

The timing of this new loan coincides with the UK automotive sector's mounting challenges. While regulations continue to push toward electrification, consumer demand has been softening. Rising costs, infrastructure delays, and shifting government incentives have further complicated the landscape.

Even major manufacturers are adjusting their expectations. Volvo recently revised its goal of becoming fully electric by 2030, now allowing for up to 10 per cent of its sales to come from plug-in hybrids. The company cited slow progress in public charging availability and a reduction in incentive programmes as major factors behind the pivot.

In response to industry concerns, the UK Government has rolled out new initiatives aimed at encouraging both production and adoption. These include the Electric Car Grant and updates to the Zero Emission Vehicle mandate, which requires manufacturers to steadily increase the proportion of zero-emission vehicles in their total sales.

Last year, Nissan warned the Government that the market shift to EVs is not keeping pace with expectations, citing weak consumer demand and increasing regulatory burdens. “The reality is that the customer is not moving at the same pace as we had expected,” the company said.

Looking further ahead, the government has pledged £2 billion in capital and R&D support for the EV sector through 2030. An additional £500 million has been earmarked to extend that support window to 2035.

The push to transform the UK’s automotive sector is not limited to domestic policy. Officials have also been working to improve international market access for British-made vehicles. A recent trade agreement with the United States has significantly lowered tariffs on UK car exports, cutting them from 27.5 per cent to just 10 per cent.

This reduction is expected to save UK manufacturers hundreds of millions of pounds annually and could play a crucial role in making British EVs more competitive abroad.

Together, these developments paint a picture of a sector in flux. The UK is navigating a difficult transition, balancing the urgency of climate targets with the economic realities facing manufacturers. Ford’s new loan package is just one example of how the public and private sectors are working in tandem to build a greener, more resilient automotive industry for the years ahead.