Ford announced Monday that it will invest $3.5 billion to build a plant in Michigan that will produce two types of batteries to expand its electric vehicle portfolio.
Located in Marshall, Michigan, the plant specifically manufactures both nickel-cobalt-manganese (NCM) and lithium iron phosphate (LFP) batteries. Ford confirmed earlier reports speculating about the partnership, saying it is working with the Chinese company Contemporary Amperex Technology Co, known as CATL. Under the arrangement, Ford’s wholly-owned subsidiary will manufacture battery cells using his LFP battery cell knowledge and services provided by CATL.
“We are committed to leading the electric vehicle revolution in America,” Ford executive chairman Bill Ford said in a statement. It means investing in technology and work that keeps us on the cutting edge. We are also proud to have chosen Michigan for this important battery production hub.”
The $3.5 billion factory is part of Ford’s plan to invest more than $50 billion in electric vehicles worldwide by 2026. in 2026.
The plant, called BlueOval Battery Park Michigan, will initially employ 2,500 people, according to the company. Production is he scheduled to start in 2026. Ford has the option to further expand its battery capacity plant.
Ford will add LFP batteries to its lineup this spring, starting with the Mustang Mach E, CEO Jim Farley said at a press conference Monday.
Ford’s decision to make LFP batteries in the United States is part of a trend for automakers to adopt this older, cheaper and safer technology. For example, Tesla already uses his LFP batteries in the EVs it manufactures and sells in China.
China has owned the LFP market for nearly a decade through an agreement with a consortium of US and Canadian universities that hold patents on the technology. But that’s poised to change as patent access opens up and the cost of battery materials rises.
New battery chemistries such as Nickel-Manganese-Cobalt (NMC) and Nickel-Cobalt-Aluminum (NCA) have the advantage of higher energy densities that improve battery range. However, because LFP does not use rare raw materials such as cobalt or nickel, it is cheaper and less likely to ignite. These perks are becoming more attractive to automakers looking to offer more affordable EVs while maintaining or improving profit margins.
