Ford Motor Company recently announced plans for a $3.5 billion investment into a new battery plant in Marshall, Michigan using technology licensed from the Chinese battery giant CATL. The Ford factory will produce lithium iron phosphate (LFP) batteries, which are a cheaper alternative to the nickel cobalt manganese (NCM) the company already produces. The lower cost is expected to help lower EV costs to help with mainstream adoption.
The plant, named BlueOval Battery Park Michigan, won’t become operational until 2026. However, Ford will begin implementing the new battery chemistry almost immediately, installing the new batteries in the Mustang Mach-E later this year before they move to the F-150 Lightning starting in 2024. It’s thought the LFP will become Ford’s standard battery offering with NCM batteries offered as upgrades.
LFP battery chemistry uses fewer high-demand materials and offers more durability and faster charging times compared to NCM chemistry. Unfortunately, LFP batteries provide less energy, and less power, and are more susceptible to cold weather. Ford says its own internal data suggests 95 percent of Mach-E owners start their trips when ambient temperatures are above freezing with 32 miles being the median distance for daily travel. It’s unclear if the new battery chemistry will become standard in the Northern States and Canadian provinces where the cold weather deficiency will certainly have more impact.
The new plant will offer Ford enough batteries to power approximately 400,000 EVs a year. It’s expected 2,500 new jobs will become available as well. This officially makes Ford the first automaker to commit to building LFP and NCM batteries in the United States and brings the company’s total investment in EV and battery production to $17.6 billion since 2019.
Ford says it hopes to achieve an annual production rate of 600,000 EVs globally by the end of this year and hopes to be cranking out 2 million EVs by the time the new battery plant comes online in 2026. The automaker says it is committed to localizing and diversifying its EV supply chain in order to improve affordability and availability.
Chinese Involvement With Ford Battery Plant Draws Political Ire
Shortly after Ford announced a new $3.5 billion battery plant in Michigan which will use technology from Chinese battery company CATL, U.S. Senator Marco Rubio called for the Biden administration to review the deal. Rubio, wrote to Treasury Secretary Janet Yellen, Energy Secretary Jennifer Granholm, and Transportation Secretary Pete Buttigieg, on behalf of the Senate Intelligence Committee. The Republican Senator called for an immediate committee on Foreign Investment in the U.S. and a review of the licensing agreement between Ford and CATL.
Moreover, Michigan appeared to be a backup plan for the Ford-CATL battery plant. Originally, Virginia threw its name in the hat to get the facility built within its borders. Finding out just who else was involved, Republican Governor Glenn Youngkin axed his state’s bid for Ford’s new battery plant over concerns about Chinese involvement.
A spokesperson for the Governor told The Detroit News, “While Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist Party, which could compromise our economic security and Virginians’ personal privacy.”
The interagency committee is led by the U.S. Treasury and is designed to review proposed transactions to ensure they do not harm national security. Granholm tweeted that “bringing advanced manufacturing capabilities from overseas to the United States is key to our competitiveness, will stimulate our economy, and create good-paying American jobs.”
Gretchen Whitmer, Democratic governor of Michigan, called the plant investment “thrilling.”
Never mind that American jets are dropping Chinese spy balloons out of the sky at the moment. It would appear questioning the involvement of CATL is a taboo, if you ask Biden’s Department of Energy chief.
According to Automotive News, Rubio said Ford’s deal “will only deepen U.S. reliance on the Chinese Communist Party for battery tech, and is likely designed to make the factory eligible for Inflation Reduction Act (IRA) tax credits.”
The $430 billion IRA applies restrictions on battery sourcing with the intent to move the U.S. away from the Chinese supply chain for EVs. In a provision aimed at China, the IRA will bar credits if any EV battery components were manufactured by a “foreign entity of concern.”
Ford says the technology agreement with Chinese CATL will help the automaker get up to speed on LFP chemistry which will then allow the company to build the batteries itself. CATL is already one of Ford’s suppliers, and the Chinese firm is scheduled to supply full LFP battery packs to American plants producing the Mustang Mach-E and Ford F-150 Lightning electric pickup truck.