Ford Invests $3.5 Billion in Michigan Battery Plant With Chinese Partner’s Technology, Wall Street Journal, Feb. 13, 2023.
By Ryan Felton and Nora Eckert
The facility will help the auto maker reach a goal of producing 2 million electric vehicles annually later this decade
Ford Motor Co. F 4.22%increase; green up pointing triangle is investing $3.5 billion to build a battery plant in Michigan with help from China’s Contemporary Amperex Technology Co. 300750 0.38%increase; green up pointing triangle Ltd., a win for the auto maker’s home state, which has seen many recent automotive projects head elsewhere.
The facility, which will be built in Marshall, Mich., about 100 miles west of Detroit, is expected to create about 2,500 jobs, Ford said Monday. The auto maker said a wholly-owned subsidiary would manufacture the battery cells using technology and expertise provided by CATL, the world’s largest maker of batteries for electric vehicles.
Ford is seeking to boost its domestic EV-making supply chain to help it produce two million electric vehicles a year globally by the end of 2026. The company has secured about 70% of the battery capacity needed to reach its 2026 goal, it has said.
Auto makers are working to secure key minerals and build battery factories as they rush to produce more electric vehicles. Financial incentives for North American production of battery cells and materials included in the federal Inflation Reduction Act passed last year has accelerated those efforts, executives and analysts say.
Ford considered sites for the battery plant in Mexico and Canada, but ultimately settled on Michigan in part because of the federal subsidies available under the new law, executives said Monday.
“The IRA was incredibly important for us and frankly it did what it intended to do,” said Lisa Drake, vice president of EV industrialization for the company’s electric vehicle division.
Ford in 2021 completed plans to locate its largest EV-related project farther south: three battery-cell factories and an electric-truck plant being developed in Tennessee and Kentucky. Many of the auto industry’s battery factories and other EV investments have gone to southern states and away from the sector’s traditional Great Lakes stronghold.
Ford’s planned Michigan factory will produce lithium-iron-phosphate battery cells, a type commonly used in China. So-called LFP chemistry is generally lower cost than the nickel-and-cobalt combination widely used in North America and Europe.
Ford said last summer that it planned to add LFP as a way to reduce the cost of its EVs, and disclosed that it planned to work with CATL on that effort. The move allows Ford to reduce its reliance on nickel-and-cobalt-based batteries, prices of which have risen over the past year.
CATL will begin supplying LFP battery packs to be used on Ford’s Mustang Mach-E electric SUVs starting this year and F-150 Lightning EV pickups in 2024, the company has said.
Several other car manufacturers have said they plan to expand their use of LFP batteries. Those battery cells have less energy density, which previously dissuaded auto makers from their use in Europe and North America, where driving distances are a greater consideration.
Auto makers in recent years have been able to boost the driving range of LFP-based EVs, which also have the benefit of greater durability and reduced fire risk compared with nickel-and-cobalt-based chemistries, analysts and executives have said.
“These batteries will give our customers who often tow and haul to get the range they need to get the job done,” Ms. Drake said.
Ford executives said Monday that CATL employees will be stationed at the factory and that some materials for construction will be shipped from China. But the company will control all aspects of the plant’s operations, the executives said.