Ford to build $3.5B EV battery plant in Mich.

DETROIT – Ford Motor Co. plans to build a $3.5 billion factory in Michigan that would employ at least 2,500 people to make lower-cost batteries for a variety of new and existing electric vehicles.

The plant, to be built on land being readied for industrial development about 100 miles west of Detroit, would start making batteries in 2026. It would crank out 35 gigawatt-hours’ worth of batteries, enough to supply 400,000 vehicles per year, Ford said.

The factory near the city of Marshall would produce batteries with a lithiumiron-phosphate chemistry, which is cheaper than the current nickel-cobaltmanganese chemistry now used in many EV batteries.

Consumers could then choose between a battery with lower range and cost, or pay more for higher range and power. The company wouldn’t give any prices just yet.

“The whole intent here is to make EVS more affordable and accessible to customers,” said Marin Gjaja, chief marketing officer for Ford’s electric vehicles.

Ford says a wholly owned subsidiary would own the factory and employ the workers. But China’s Contemporary Amperex Technology Co. Limited, or CATL, known for its lithium-iron-phosphate expertise, would supply technology, some equipment and workers.

The announcement comes as U.s.china relations are strained, and the Biden administration is offering tax credits for businesses to create a U.S. supply chain for EV batteries. To get a full $7,500 per vehicle U.S. tax credit to customers, EV batteries can’t have metals or components from China in them.

Ford is hoping the structure of the deal will defuse criticism of spending tax incentive money on a joint-venture factory that would be part-owned by a Chinese company. Last month Virginia dropped out of the race for the same Ford plant after Gov. Glenn Youngkin characterized the project as a “front” for the Chinese Communist Party that would raise national security concerns.

The company expects to take advantage of U.S. factory tax credits, and says that buyers initially would get at least $3,750 in tax credits because the vehicles are produced in North America.