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announced it will partner with a Chinese supplier on a new $3.5 billion electric vehicle (EV) battery plant in Michigan, despite US-China tensions.
The expected announcement of the deal between Ford and Contemporary Amperex Technology Co. (CATL), follows Virginia Gov. Glen Youngkin saying he is pulling the state out of a competitive process to attract the planned Ford plant because of its ties to the Chinese company.
Lisa Drake, Ford’s vice president of EV industrialization, said the automaker will own the new facility through a wholly-owned subsidiary rather than operate it as a joint venture with CATL, which several automakers, including Ford, have done with non-Chinese U.S. partners. “LFP is already here in the US. It’s in a lot of consumer electronics, it’s actually in another OEM product, but, unfortunately, it’s always imported,” Drake said. “This project aims to de-risk that by building the capacity to expand this technology in the US, where Ford has control.”
The plant is expected to open in 2026 and employ about 2,500 workers, according to the company. It will produce new lithium iron phosphate (LFP) batteries as opposed to the more expensive nickel cobalt batteries the company currently uses. The new batteries are expected to offer various benefits at a lower cost, helping Ford increase EV production and profit margins.
Ford follows EV leader Tesla, which uses LFP batteries in some of its vehicles, in part to reduce the amount of cobalt they need to purchase to make high-voltage battery cells and battery packs. Drake said Ford wasn’t necessarily worried about the Chinese government interfering in the deal, saying the companies “certainly thought about it and these are instructions.” Ford’s ownership may help it avoid further political criticism and the possibility of a federal vehicle tax credit.
Ford said it expects battery cell production to receive federal incentives of $35 per kilowatt-hour produced and $10 per module. The plant is expected to be able to produce 35 gigawatt hours (GWh) of LFP battery capacity. The new LFP plant adds to Ford’s collaborations with South Korea’s LG Energy Solution and SK, including a joint venture for twin lithium-ion battery plants in Tennessee and Kentucky. These factories are expected to come online in 2025 and 2026.
Ford plans to deliver an annual production rate of 600,000 electric vehicles worldwide by the end of this year and 2 million globally by the end of 2026. The company aims to achieve an 8% adjusted profit margin on its electric business by then.
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