Ford said on Monday it is investing $3.5 billion to build a plant in Michigan that will produce two types of batteries for its growing portfolio of electric vehicles.
The plant, which will be located in Marshall, Michigan, will primarily produce nickel-cobalt-manganese (NCM) batteries and lithium iron phosphate (LFP) batteries. Ford said it is working with Chinese company Contemporary Amperex Technology Co, known as CATL, confirming previous reports that speculated about the partnership. Under the agreement, Ford’s wholly owned subsidiary would manufacture the battery cells using LFP battery cell expertise and services provided by CATL.
“We are committed to leading America’s electric vehicle revolution, and that means investing in technology and jobs that will keep us at the forefront of this global transformation in our industry,” Ford Executive Chairman Bill Ford said in a statement. “I am also proud that we have chosen our home state of Michigan for this important battery production center.”
The $3.5 billion factory is part of Ford’s plan to invest more than $50 billion in electric vehicles globally by 2026. Ford said it plans to deliver an annual production rate of 600,000 electric vehicles globally by the end of this year. year and 2 million globally by the end. from 2026.
The plant, called BlueOval Battery Park Michigan, will initially employ 2,500 workers, according to the company. Production is expected to begin in 2026. Ford will have the option to further increase its factory battery capacity.
Ford said it is adding LFP batteries to its lineup this spring, starting with the Mustang Mach-E, CEO Jim Farley said during a press conference on Monday.
Ford’s decision to manufacture LFP batteries in the United States is part of a trend among automakers to adopt this older, cheaper and safer technology. Tesla, for example, already uses LFP batteries in the electric vehicles it manufactures and sells in China.
China has owned the LFP market for nearly a decade due to an agreement with a consortium of universities in the United States and Canada that hold patents on the technology. But that is about to change as access to patents opens up and the cost of battery materials rises.
Newer battery chemistries such as Nickel Manganese Cobalt (NMC) and Nickel Cobalt Aluminum (NCA) have the benefit of higher energy density which improves the range of your batteries. However, LFP does not use scarce raw materials such as cobalt and nickel, making them cheaper and less likely to catch fire. These advantages have become more attractive to automakers as they look to offer more affordable EVs while maintaining or even improving profit margins.