A nickel cobalt manganese (NCM) battery and a lithium iron phosphate (LFP) battery. Ford, which uses NCM batteries in today’s electric vehicles, reported it is investing $3.5 billion in the country’s first automaker-backed LFP battery plant to offer customers a second battery technology. (Image courtesy Ford Motor Company)

The company said it is diversifying its domestic supply chain as the first automaker to commit to build NCM and LFP batteries in the U.S.

February 13, 2023

MARSHALL, Mich.—Ford Motor Company reported it is investing $3.5 billion to build the country’s first automaker-backed LFP (lithium iron phosphate) battery plant. The investment builds on Ford’s commitment to American manufacturing and will enable it to offer customers a second battery technology within its EV lineup, according to a release from the automaker.

“Ford is the first automaker to commit to build both nickel cobalt manganese (NCM) and lithium iron phosphate batteries in the U.S.,” the company said in the release.

The plant, called BlueOval Battery Park Michigan, will initially employ 2,500 people when production of LFP batteries begins in 2026. Ford will have the option to further grow its battery capacity at its Marshall, Michigan, plant, which will be part of a wholly owned Ford subsidiary, the company said.

“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,” said Bill Ford, Ford executive chair, in a statement. “I am also proud that we chose our home state of Michigan for this critical battery production hub.”

According to the automaker, diversifying and localizing Ford’s battery supply chain in the countries where it builds EVs will improve availability and affordability for customers while strengthening consumer demand. Ford is working to deliver an annual run rate of 600,000 electric vehicles globally by the end of this year, and 2 million globally by the end of 2026 as part of its Ford+ plan. Introducing batteries allows Ford to produce more electric vehicles and offer more choices to new EV customers, the company said.

NCM vs. LFP (Image courtesy Ford Motor Company)

Lithium iron phosphate batteries are reportedly durable and tolerate more frequent and faster charging. They also use fewer high-demand, high-cost materials and are less expensive to produce than NCM batteries. In addition, an LFP battery plant in America will reduce traditional shipping and import costs. Ford will also benefit from the Inflation Reduction Act by building LFP batteries in the United States. All of these factors, combined, will enable Ford to create one of the lowest-cost U.S.-produced batteries when the plant comes online in 2026, the company said.

Ford said that offering LFP as a second battery chemistry (in addition to nickel cobalt manganese) allows its customers to choose an electric vehicle with unique battery performance characteristics that are most aligned with their needs. This lower-cost battery, at scale, is expected to help Ford contain or even further reduce EV prices for customers. “These LFP batteries will power a variety of affordable, next-generation Ford EV passenger vehicles and trucks under development, most of which will be assembled in the U.S.,” the company said in the release.

“Ford’s electric vehicle lineup has generated huge demand. 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,” said Ford President and CEO Jim Farley, in the release. “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.”

Ford said that even before the new battery plant opens, it will introduce LFP batteries on Mustang Mach-E this year—and F-150 Lightning in 2024—to increase production capacity, with a goal of reducing wait times for customers.

The new battery production facility in Michigan will add approximately 35 gigawatt hours per year of new battery capacity for Ford in the U.S. initially, capable of powering approximately 400,000 future Ford EVs.

“Ford’s $3.5 billion investment, creating 2,500 good-paying jobs in Marshall building electric vehicle batteries, will build on Michigan’s economic momentum,” said Michigan Governor Gretchen Whitmer, in the release. “Today’s generational investment by an American icon will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification. Let’s continue bringing the supply chain of electric vehicles, chips, and batteries home while creating thousands of good-paying jobs and revitalizing every region of our state.”

As part of Ford’s plan to offer a new battery chemistry and source in key regions where it produces EVs, Ford has reached a new agreement with battery manufacturer Contemporary Amperex Technology Co., Limited (CATL). Under the arrangement, Ford’s wholly owned subsidiary would manufacture the battery cells using LFP battery cell knowledge and services provided by CATL, which has operated 13 plants in Europe and Asia. Ford engineers will integrate these LFP battery cells into its vehicles, the company said.

The new agreement with CATL adds to Ford’s existing battery capacity and available battery technology made possible through a series of key collaborations, including with SK On and LG Energy Solution (LGES).

Ford said that LFP battery technology helps reduce reliance on critical minerals, such as nickel and cobalt, and is in line with its “work to create an EV supply chain that upholds its commitments to sustainability and human rights.”

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