Ford to Start Making EV Batteries in Michigan

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 about 100 miles west of Detroit, would start making enough batteries to supply 400,000 vehicles per year in 2026, reports the AP. The factory near the city of Marshall would produce batteries with a lithium-iron-phosphate (LFP) chemistry, which is cheaper than the current nickel-cobalt-manganese 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. No word on prices yet.

Ford says a wholly owned subsidiary would own the factory and employ the workers. But China's Contemporary Amperex Technology Co. Limited, or CATL, which is known for its lithium-iron-phosphate expertise, would supply technology, some equipment, and workers. The announcement comes at a time when US-China relations are strained, and the Biden administration is offering tax credits for businesses to create a US supply chain for EV batteries. The structure of the deal allows Ford to take advantage of US factory tax credits in the Inflation Reduction Act. Because it's not a joint venture, it could stem criticism about the company doing business with the Chinese.

The company says that buyers initially would get at least $3,750 in tax credits because the vehicles are produced in North America. Over time, they could get the full $7,500 credit depending on sourcing of battery minerals. Lithium-iron-phosphate batteries would go into standard-range versions of Ford's EVs. Last summer, Ford announced CATL will make lithium-iron-phosphate battery packs for Mustang Mach-E electric SUVs in North America this year and for F-150 Lightning electric trucks early in 2024. The batteries at first would come from China, then be switched to the Michigan plant in 2026. Ford expects to be able to produce 600,000 EVs per year by late this year.

(More Ford stories.)