Ford Motor Company and Contemporary Amperex Technology (CATL) are reportedly gearing up to announce a $3.5 billion battery plant in Marshall, Michigan. The announcement of the factory is expected to be made on Monday, February 14, in partnership with CATL, which creates lithium iron phosphate batteries for electric vehicles (EVs). The company has scheduled a press conference on Monday to share its plans to “rapidly scale EVs and make them more accessible to customers.”
The state of Michigan reportedly offered $1 billion in incentives to attract the battery factory, which is expected to bring 2,500 jobs to the area. This new project is part of Ford’s efforts to comply with the strict rules set by the Biden administration’s Inflation Reduction Act (IRA), which lets EVs assembled in North America qualify for a $7,500 tax credit. However, the IRA also outlines battery sourcing requirements that discourage dealings with “foreign entities of concern,” like China. The Treasury Department is expected to interpret these rules next month.
Even though there is uncertainty around how the US Treasury Department will interpret the rules, Ford is reportedly pushing ahead with the project. The automaker is reportedly considering a “novel ownership structure” that would allow it to work with the Chinese company and still qualify for the federal tax credit. This could involve Ford taking 100 percent ownership of the plant itself, while CATL controls operations at the facility and retains the technology it uses to build the batteries.
Rumors about the battery plant have been circulating for months. Initially, Ford was reported to be interested in bringing the battery factory to Virginia, but Governor Glenn Youngkin rejected the construction over its ties to China. Ford then set its sights on Michigan, which recently began advertising a 1,900-acre “megasite” in the southwest portion of the state. If the rumors are true, the Michigan-based $3.5 billion plant would add to the $11.4 billion investment Ford made in partnership with South Korea’s SK Innovation to bring battery and EV factories to Tennessee and Kentucky. It could also help the company get closer to its goal of building over 2 million EVs per year by late 2026.
The multibillion-dollar facility is expected to create about 2,500 jobs and is located about 100 miles west of Detroit. Ford is moving ahead with the project despite the uncertainty around the interpretation of the Inflation Reduction Act. CATL is the world’s largest maker of batteries for EVs, and the companies are reportedly considering a novel ownership structure under which Ford would own 100% of the plant, including the building and infrastructure. Ford workers would build the batteries, while CATL would own the technology to create the cells. This arrangement may allow the facility to qualify for production tax credits under the Inflation Reduction Act while requiring no direct financial investment from CATL. The site for the new factory has room to grow, potentially bringing more jobs and a larger investment.
In conclusion, Ford and CATL’s $3.5 billion battery plant in Michigan is expected to bring 2,500 jobs to the area and is part of Ford’s efforts to comply with the Biden administration’s Inflation Reduction Act. Despite the uncertainty surrounding the interpretation of the act, Ford is reportedly pushing ahead with the project and considering a “novel ownership structure” that would allow it to qualify for the federal tax credit. The battery plant is expected to help Ford reach its goal of building over 2 million EVs per year by late 2026.