Ford plans $3.5 bn electric vehicle battery plant in Michigan

By Editor


Ford Motor announced plans to invest $3.5 billion to build an electric vehicle battery plant in Michigan, United States.

Ford’s plan to build the battery plant near Marshall, Michigan, hinges on a judgment that lower cost and faster recharging will attract many customers, including commercial fleet buyers, to accept the limitations of lithium-iron-phosphate, or LFP batteries.

Ford is counting on its decision to manufacture LFP batteries in the United States at the plant to take the political risk out of relying on a Chinese technology partner.

“Manufacturing in America will bring us closer to battery independence,” Ford Chairman Bill Ford said during an event in Romulus, Michigan, to announce the investment.

Building LFP batteries in Michigan gives Ford a shot at significant U.S. battery manufacturing subsidies that could help it hit a goal of 8 percent profit margins on its EV operations by 2026.

The BlueOval Battery Park Michigan project is a “substantial step in the path to affordability and the path to 8 percent” margins, Ford Vice President Lisa Drake said during a media call ahead of the event.

Ford announced plans last year to begin using LFP batteries made in China by CATL in certain Mustang Mach-E electric SUVs and the Ford F-150 Lightning pickups offered in North America and Europe.

Ford has studied the driving habits of Mach-E and Lightning owners, and found half of Mach-Es are driven 32 miles or fewer a day, said Marin Gjaja, chief customer officer for Ford’s electric vehicle operations.

Lisa Drake said the IRA “was incredibly important” to Ford’s decision to locate its fourth battery plant and its 2,500 jobs in Michigan. Michigan Economic Development Corp official Josh Hundt said the Ford jobs at the plant will pay $20 to $50 an hour.

States are offering hefty incentives to compete for battery plants.

Michigan approved over $1 billion in incentives over 15 years to win the project including “Critical Industry Program” grants of up to $210 million and $772 million to designate the project as a “Renaissance Zone” that will significantly reduce both real and personal property taxes, Reuters news report said.

Ford has agreed to recognize the United Auto Workers (UAW) at the plant if a majority of workers sign cards, the automaker and union said. Under the “card check” process, a majority of hourly workers could simply sign cards supporting the union, and once certified an election would not be necessary.

The Marshall plant is scheduled to launch with 35 gigawatt-hours of capacity – enough for 400,000 EVs a year – and production should start in 2026. The site has room for expansion, Drake said.

The Marshall factory is one of four battery plants Ford has announced plans to build in North America and Europe.

CATL would license technology to Ford to produce lithium iron phosphate batteries in Michigan, and would provide the U.S. automaker with technical assistance, Ford said.

Ford last year agreed to form a joint venture with South Korean battery maker SK Innovation to build EV battery factories in Tennessee and Kentucky.

Ford has a goal of building 600,000 EVs a year by the end of 2023.

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