Ford to build $3.5B EV battery plant
Ford Motor Co. said Monday that it plans to build a $3.5 billion electric vehicle battery factory in Michigan using technology licensed from a Chinese company that has become one of the most important players in the auto industry.
The plant, to be built in Marshall, a rural town about 100 miles west of Detroit, will be the latest in a growing list of new battery and EV factories that companies have announced in recent months. Ford expects to employ about 2,500 people at the plant and begin production in 2026.
The automaker said it would own 100 percent of the plant and make battery cells using technology and services from Contemporary Amperex Technology Ltd., known as CATL. The company, the world’s largest producer of batteries for EVs, has 13 factories of its own in Europe and Asia but none in the United States.
Just a quarter-century ago, Chinese officials were eagerly asking U.S. automakers to bring their investments and expertise to China. Today, the roles are reversed, with one of America’s most storied industrial giants asking China for the technology needed to survive in a rapidly changing global automotive landscape.
The alliance comes at a time of considerable tension between Washington and Beijing, after the U.S. shot down a Chinese surveillance balloon off the coast of South Carolina on Feb. 4. Secretary of State Antony Blinken abruptly canceled a trip to Beijing after the spy balloon was spotted above Montana.
Two more objects, which were unidentified, were shot down late last week, one over northernmost Alaska and the other over northern Canada. A fourth unidentified object was shot down Sunday over Lake Huron, off the eastern shore of Michigan.
China on Monday accused the U.S. of having sent high-altitude balloons through its airspace without permission more than 10 times since the start of last year.
The balloon dispute appeared to have interrupted efforts by China to attract more foreign investment after it ended nearly three years of “zero COVID” policies and began to reopen its borders. Many politicians in the U.S. remain wary of China and of Chinese investment.
Republican Virginia Gov. Glenn Youngkin last month withdrew his state’s bid for Ford’s venture with CATL. He described the planned project to Bloomberg Television on Jan. 20 as a “Trojan horse” for China’s Communist Party.
Ford is seeking to insulate itself from U.S.-China tensions by opting to own the factory entirely and only licensing technology from CATL, which supplies batteries to Tesla, BMW and other large automakers.
“This project is aimed at derisking that, by actually building out the capacity and capability to scale this technology in the United States, where Ford has control, over the manufacturing, over the workforce,” Lisa Drake, Ford’s vice president of EV industrialization, said in a conference call with reporters.
Ford’s contract with CATL includes provisions to work through difficulties that arise between the two countries. “Of course we’ve thought about it,” Drake said, without disclosing further details.
Ford, General Motors and other automakers are building other battery plants that are jointly owned with Korean partners. Ford is building two battery plants in Kentucky and a third in Tennessee, both with SK On. GM recently started production at a battery plant in Ohio that it jointly owns with LG Energy Solution, and the partners are building two more plants, in Tennessee and Michigan.
Ford’s new plant will produce batteries that include lithium, iron and phosphate, a combination known as LFP. These batteries are less expensive because they do not include expensive ingredients such as cobalt and nickel used in other batteries. LFP batteries also have the advantage of being more durable. But batteries that contain cobalt and nickel hold more energy, allowing EVs to go farther before needing to be charged.
Drake said Ford had looked at building the factory in Canada and Mexico but that it chose a U.S. site after the Inflation Reduction Act was signed into law last year by President Joe Biden. The act provided tax incentives to companies that build battery factories in the U.S. Car buyers are also eligible for tax credits for EVs made in North America that include batteries and raw materials from the region or another U.S. trade ally.
“The IRA was incredibly important for us, and frankly it did what it intended to do,” Drake said. “It allowed the United States to capture 2,500 technical jobs. It is a big win for the U.S.”
Ford’s decision is also a big victory for Michigan. Over the past two years, automakers have chosen Southern states for more than a half-dozen auto plants.
Ford said its plant would be able to produce enough batteries for 400,000 EVs a year. The company plans to use the LFP batteries in its Mustang Mach-E, an SUV, and the F-150 Lightning, a pickup, and other EVs. CATL will supply Ford with LFP cells until the Marshall plant begins production.
Ford and other automakers are ramping up production of EVs. Ford is the second-largest seller of them in the U.S. after Tesla. The company is hoping the move to LFP technology will allow it to make more affordable EVs.
Ford said vehicles with LFP batteries were better suited for commuting and local driving and could be fully charged quickly. Batteries with cobalt and nickel are better for longrange driving or towing but generally take longer to charge.
CATL has 100,000 employees around the world, mostly in China, and has been the world’s largest supplier of electric car batteries for the past six years. One-third of the electric cars now on the road around the world use CATL batteries.