Feb 13, 2023 - Technology

Ford's $3.5B Michigan factory will build batteries using Chinese tech

Illustration of a car with a battery-shaped license plate with electricity symbols on it

Illustration: Sarah Grillo/Axios

Ford Motor is investing $3.5 billion in a Michigan factory that will make electric vehicle batteries using technology licensed from a major Chinese supplier.

Why it matters: The plant, which is expected to create 2,500 high-paying jobs, is part of a burgeoning U.S. supply chain for electric vehicles (EVs) — but it comes amid heightened geopolitical tensions between the U.S. and China.

Details: The plant in Marshall, a rural town about 100 miles west of Detroit, will make battery cells using technology from Contemporary Amperex Technology Co., Limited (CATL), the world’s largest producer of EV batteries.

  • The so-called LFP batteries (for lithium, iron and phosphate) are less expensive because they don't include minerals like cobalt and nickel. That will help bring down the cost of electric cars.
  • LFP batteries are also more durable, but they provide a shorter driving range, creating a tradeoff for consumers.

The intrigue: Virginia Gov. Glenn Youngkin, a Republican, last month withdrew his state's bid for Ford’s venture with CATL, describing the planned project as a "Trojan horse" for the Communist Party of China.

  • Because Ford will own 100% of the factory, it hopes to take advantage of lucrative tax credits offered by the Biden administration under the Inflation Reduction Act.
  • Michigan Gov. Gretchen Whitmer, a Democrat, applauded the "generational investment by an American icon [that] will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification."
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