Ford to build LFP lithium battery plant in Michigan

US automaker Ford will invest $3.5 billion to establish a lithium-ion electric vehicle battery plant in Marshall, Michigan, that will prioritize the production of batteries with lithium-iron-phosphate chemistries, it said Feb. 13.

The facility will be the first "automaker-backed" lithium-iron-phosphate, or LFP, battery plant in the US, according to Ford, and the project will allow the automaker to diversify the battery offerings in its EVs.

"We are committed to leading the electric vehicle revolution in America, and that means investing in the technology and jobs that will keep us on the cutting edge of this global transformation in our industry," Executive Chair Bill Ford said in a statement.

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Ford said production at the 35 GWh/year LFP plant is expected to begin in 2026 with options to subsequently expand output. Battery production at the Michigan facility will underpin the company's goal of achieving an annual global EV production run rate of 600,000 vehicles this year and 2 million vehicles by the end of 2026.

The automaker said it will continue to produce and offer nickel cobalt manganese batteries for its EVs, but the addition of LFP to its battery production portfolio will provide a second option for potential EV buyers that may prioritize longer battery lifespan, faster charging times and affordability.

LFP battery production will also benefit from lower costs and more stable supply chains since they do not utilize nickel or cobalt, metals that are critical to NCM, Ford added.

"To get as many Ford EVs to customers as possible, we're the first automaker to commit to build both NCM and LFP batteries in the United States," CEO Jim Farley said. "We're delivering on our commitments as we scale LFP and NCM batteries and thousands, and soon millions, of customers will begin to reap the benefits of Ford EVs with cutting-edge, durable battery technologies that are growing more affordable over time."

Furthermore, in the US, the decision to build the battery plant domestically aligns with priorities set forth by the US Inflation Reduction Act, Ford said.

The IRA will start providing tax credits this year to electric vehicle manufacturers and consumers based on the sourcing of battery raw materials and components. To qualify for the credit, a certain percentage of the materials and components in the vehicle's battery must be sourced from the US or its free-trade partners.

CATL partnership

To support its LFP production domestically and abroad, Ford said it also reached an agreement with China-based battery manufacturer Contemporary Amperex Technology, or CATL. Under the deal, CATL will provide Ford with LFP battery cell knowledge and services to assist the automaker with its operations.

A representative for CATL was not immediately available for comment Feb. 13.

Ford is already engaged in battery collaborations with SK On and LG Energy Solutions.

Ford's deal with CATL continues a trend of partnerships formed among automakers and battery manufacturers over the last several years. Major automotive producers have looked to form joint ventures with battery makers to leverage their expertise and bolster EV production targets. Meanwhile, battery manufacturers have been eager to establish market share in the burgeoning EV industry.

Government policies such as the IRA have also pushed companies in multiple industries to promote supply chains either domestically or with strategic trade allies. This has motivated both automakers and battery producers to team up and build battery operations, which are currently concentrated in Asia, in North America and Europe.

Notable US automaker-battery producer partnerships include the Ultium joint venture between General Motors and LGES and the Sparks, Nevada, gigafactory operated by Panasonic and Tesla.