Ford reportedly plans to build a $3.5 billion EV battery factory in Michigan

Ford is reportedly days away from sharing a plan to increase its supply of US-made electric vehicle batteries. According to Reuters, the automaker could announce as early as Monday that it’s partnering with China’s Contemporary Amperex Technology Co (CATL) to build a $3.5 billion iron phosphate battery plant outside of Marshall, Michigan, a small town about 100 miles west of Detroit. Once completed, the facility is expected to employ at least 2,500 workers.

As Bloomberg points out, Ford is moving forward with the project despite uncertainty around how the Treasury Department will interpret President Biden’s landmark climate change bill. Specifically, the Inflation Reduction Act includes language that seeks to prevent automakers from taking advantage of consumer EV tax credits if they make vehicles with batteries made by a “foreign entity of concern.” Congress designed the rules to incentivize automakers to build a domestic supply chain for EV parts instead of relying on China for critical components.

According to Bloomberg, Ford has considered an ownership structure that would see it own the entire plant and nearby infrastructure. Ford employees would also work at the facility. CATL would only own the technology used to create the batteries. It’s an arrangement that could allow batteries made at the facility to qualify for the Inflation Reduction Act-related tax credits. “We’ve said that we’re exploring batteries based on CATL’s technology for Ford vehicles and that we plan to localize,” a Ford spokesperson told Bloomberg.

In July, Ford said it would begin sourcing batteries for US-bound 2023 Mustang Mach-E models from CATL. That same month, the company announced it had plans to produce 40 gigawatt hours of battery capacity in North America starting in 2026.