Ford, China to partner in $3.5 billion battery plant in Michigan

DETROIT, Michigan: Media reports have stated that Ford Motor Co. could announce as early as this week that it plans to build a $3.5 billion lithium battery plant in Michigan.

Ford will own and operate the plant, in partnership with Chinese battery company China’s Contemporary Amperex Technology, with the aim of jointly developing a variety of batteries.

The plant is expected to be located in the 1,900-acre Marshall "megasite," about 100 miles west of Detroit, Michigan, and create some 2,500 jobs.

To generate stable capital without taking large risks and making significant investments, CATL signed technology licensing agreements with Hyundai MOBIS in 2021 and Arun Plus in 2022.

To wean the US off the Chinese battery supply chain, in August Congress passed the $430 billion Inflation Reduction Act legislation to restructure EV tax credits and eventually bar credits if any EV battery components were manufactured or assembled by a "foreign entity of concern" or if batteries contain critical minerals extracted, processed, or recycled by a foreign country of concern.

However, as Ford will own the plant outright, the batteries manufactured in Michigan could qualify for tax credits.

Meanwhile Ford earlier said that it plans to localize 40 GWh of battery capacity in North America by 2026, and announced an agreement with CATL to supply battery packs for Mustang Mach-E models for North America starting in 2023, adding that the two companies will discuss cooperation in supplying batteries for Ford vehicles sold around the world.