Ford gives diesel plant lease of life as electric vans loom

Ford Motor Co.’s last diesel engine facility in Europe will stay open for years to come as the automaker gives its commercial vehicle business a longer leash to continue using combustion powertrains.

Dagenham Engine Plant - one of Ford’s two remaining factories in the UK - will manufacture diesels for the next-generation Transit Custom vans going into production in early 2023, according to a statement Tuesday. The news is reason for relief at the facility east of London after Ford’s announcement a month ago that it plans to go almost entirely electric in Europe by the end of the decade.

While Ford Otosan, Ford’s Turkish venture half-owned by Koc Holding, will start making all-electric, plug-in hybrid and mild-hybrid versions of the Transit Custom, diesel engines will have longer staying power in commercial vehicles. By 2025, as much as 60% of Dagenham’s output will go into the 1-ton vans Ford Otosan builds in Kocaeli, Turkey, which will include a next-generation Volkswagen AG vehicle as part of an alliance formed in 2019.

Ford Otosan shares rose 10% in Istanbul after the company said in a stock-exchange filing that it will invest 1.4 billion euros ($1.67 billion) over the next five years to raise production capacity of the Transit Custom to 405,000 units.

Work vehicles like the Transit Custom are a strength of Ford’s business and priority for Chief Executive Officer Jim Farley. By the end of the decade, the company expects roughly two-thirds of its commercial vehicle sales in Europe to be all-electric or plug-in hybrids.

Ford ended more than a century of vehicle making in the UK in 2013 when it closed a factory that was making Transit vans in Southampton, England. The carmaker closed an engine plant in Bridgend, Wales, last year, leaving Dagenham and a transmission factory in Halewood as its only remaining manufacturing facilities in the country.