US carmaker Ford plans to overhaul its passenger car offering in Europe, making a factory in Germany the hub for its electric operations, the company said on Wednesday.

Ford's ambitious announcement comes as carmakers in Europe are under pressure to increase their electric offering and curb emissions amid new EU regulations.

What are Ford's plans?

Ford plans to spend $1 billion (€830,500) to revamp its factory in the western German city of Cologne, which is also the headquarters of Ford Europe.

The changes are slated to take place over the next two-and-a-half years.

According to the company, which has made less progress towards electrification than several of its competitors to date, its "first European-built, volume all-electric passenger vehicle for European customers will roll off the lines in Cologne starting in 2023."

For the European market, Ford wants to offer fully electric, plug-in hybrid or zero emissions-capable versions of its passenger cars by 2024. The ultimate goal is to have all its passenger vehicles in Europe be fully electric by 2030.

The changes are slated to take place over the next two-and-a-half years.

How does Volkswagen factor in?

To switch its European passenger models over to electric, Ford has signed an agreement with Volkswagen to use the German company's mechanical framework.

The MEB — modular electric toolkit — includes Volkswagen-produced electric batteries, axels and wheels that can be adjusted to produce different car models.

Why are carmakers switching to electric?

Last year, new regulations came into effect in the European Union that put pressure on OEMs to produce more climate-friendly models.

Under the new regulations, any marque's combined fleet should emit no more than an average of 95 grams of CO2 per kilometer. Should the range fail to do so, manufacturers face hefty fines.

rs/msh (AP, AFP, dpa)