Ford to move forward with $3.5 billion EV battery plant with Chinese partner

DETROIT – Ford Motor said Monday it volition collaborate with a Chinese supplier connected a caller $3.5 cardinal artillery works for electrical vehicles successful Michigan, despite tensions betwixt the U.S. and China.

The anticipated announcement of the woody betwixt Ford and Contemporary Amperex Technology Co., oregon CATL, follows Virginia Gov. Glenn Youngkin saying helium was withdrawing the state from a competitory process to pull the planned Ford works implicit its transportation to the Chinese company.

Lisa Drake, Ford's vice president of EV industrialization, said the automaker volition ain the caller installation done a wholly owned subsidiary alternatively of operating it arsenic a associated task with CATL, which respective automakers, including Ford, person done with non-China partners successful the U.S. She said the institution volition licence the exertion from CATL, which volition beryllium a strategical partner.

"The LFP exertion is already present successful the U.S. It's successful a batch of user electronics devices, it's really successful different OEM product, but, unfortunately, it's ever imported," Drake said during a media call. "This task is aimed astatine de-risking that by really gathering retired the capableness and the capableness to standard this exertion successful the United States, wherever Ford has control."

The works is expected to unfastened successful 2026 and employment astir 2,500 people, according to the Detroit automaker. It volition nutrient caller lithium robust phosphate batteries, oregon LFP, arsenic opposed to pricier nickel cobalt manganese batteries, which the institution is presently using. The caller batteries are expected to connection antithetic benefits astatine a little cost, assisting Ford successful expanding EV accumulation and nett margins.

Ford follows EV person Tesla utilizing LFP batteries successful a information of its vehicles successful portion to trim the magnitude of cobalt they needed to procure to marque artillery cells and high-voltage artillery packs.

Drake said Ford is not needfully acrophobic astir the Chinese authorities interfering with the deal, saying the companies "certainly thought done that and those are provisions," including optionality successful the contract.

Ford's ownership, alternatively than a associated venture, whitethorn assistance it successful avoiding further governmental disapproval and perchance suffice for national EV taxation credits.

Marin Gjaja, main lawsuit serviceman of Ford's EV unit, said erstwhile accumulation astatine the Michigan works begins, the vehicles are expected to suffice for fractional of the up to $7,500 national taxation incentives for consumers purchasing an EV. They're expected to conscionable section accumulation requirements but not worldly sourcing rules for the batteries, helium said.

In August, President Joe Biden signed the $430 cardinal Inflation Reduction Act, which included stricter user taxation credits of up to $7,500 for the acquisition of an EV arsenic good arsenic important incentives for companies to nutrient batteries domestically to wean the U.S. car manufacture disconnected its dependency connected China for batteries.

Ford said it expects the accumulation of the artillery cells to suffice for national incentives of $35 per kilowatt hr produced and $10 per module. The works is expected to beryllium susceptible of producing 35 gigawatt hours (GWh) of LFP artillery capacity

Before the IRA, Ford said it would spouse with CATL to research expanding artillery packs for the electrical Mustang Mach-E crossover this twelvemonth successful North America. It was portion of a program for Ford to found 40 GWh of artillery capacity, susceptible of powering 400,000 Ford EVs, Drake said.

The caller LFP works is successful summation to Ford's collaborations with LG Energy Solution and South Korea-based SK, including a associated task for duplicate lithium-ion artillery plants successful Tennessee and Kentucky. Those plants are expected to travel online successful 2025 and 2026.

Ford plans to present an yearly tally complaint of 600,000 electrical vehicles globally by the extremity of this twelvemonth and 2 cardinal globally by the extremity of 2026. The institution aims to execute an 8% adjusted nett borderline connected its EV business by then.

The automaker said it expects to statesman offering the LFP batteries successful the Mustang Mach-E aboriginal this year, followed by the F-150 Lightning pickup adjacent year. It volition root those batteries from CATL, the institution said.

With this $3.5 cardinal investment, Ford says it and its artillery partners person announced $17.6 cardinal successful investments successful electrical conveyance and artillery accumulation successful the United States since 2019. Ford, citing a "2020 autarkic study," said those investments implicit the adjacent 3 years are expected to make much than 18,000 nonstop jobs successful Michigan, Kentucky, Tennessee, Ohio and Missouri, and much than 100,000 indirect jobs.

– CNBC's Lora Kolodny contributed to this report.