Yesterday Ford officially announced that it will build a battery factory with CATL in the vicinity of Marshall, Michigan, USA. The factory plans to invest 3.5 billion U.S. dollars and is initially scheduled to be put into operation in 2026, with a staff size of 2,500.
“Making (batteries) in the U.S. will bring us closer to battery independence,” Ford Chairman Bill Ford said at an event in Romulus, Mich., announcing the investment.
They believe that lower costs and faster charging will attract many customers and that more car dealers will accept the limitations of lithium iron phosphate (LFP) batteries, and they can also avoid political risks.
Of course, producing LFP batteries stateside also gives Ford access to subsidies that could help it meet its goal of an 8% profit margin in its EV business by 2026. Lisa Drake, Ford vice president, said the BlueOval Battery Park Michigan project is “an important step toward affordability and an 8% profit margin.”
Drake bluntly said that the IRA bill, which is tax-free up to $35 per kilowatt-hour, was “very important” to Ford’s decision to build a battery factory and 2,500 jobs in Michigan. Josh Hundt, a Michigan Economic Development Corporation official, said jobs at the Ford plant would pay $20 to $50 an hour.
In addition, the Michigan Strategic Fund on Monday approved grants of up to $210 million for the project, among other incentives.
She said that the initial start-up of the plant will bring a production capacity of 35GWh, which is enough to meet the annual production plan of 400,000 electric vehicles. The company will begin production in 2026, and the factory has room for further expansion.
Image source Pexels
The U.S. government enacted the Inflation Reduction Act (IRA) in August last year, which included a subsidy of 430 billion U.S. dollars (currently about 2.92 trillion CNY) to support electric vehicles, key minerals, production and investment in clean energy and power generation facilities, but nine of the tax incentives are based on the premise of production and sales in the United States or North America, so if a US company is 100% controlled, it can bypass this restriction.
In addition, according to the latest requirements, battery production materials must also be mainly sourced locally. For example, the production of electric vehicles in the United States can enjoy a federal tax credit of up to US$7,500 per vehicle, and battery production can receive a tax credit of up to US$35 per kWh.
