Monday, March 27, 2023
News Ford to Invest $3.5 Billion in a New Battery Plant in Michigan

Ford to Invest $3.5 Billion in a New Battery Plant in Michigan

Ford announced it will build a new battery factory in Michigan to supply its EVs with LFP cells.

  • This factory will manufacture LFP batteries which are more durable, more affordable, and more sustainable than current types.

  • These batteries will begin to be used in the Mustang Mach-E later this year.

  • Beginning in 2026, this factory will add 35 gigawatt hours of annual battery capacity for Ford.

As part of its $50 billion global electrification efforts, Ford will invest $3.5 billion in Michigan for a new factory that will produce LFP batteries starting in 2026.

This plant will begin construction shortly in Marshall, a small town located about 100 miles west of the automaker’s home in Dearborn.

The batteries that will be produced there will be the LFP type, a technology that currently holds about 31% of the EV market due mainly to Tesla and Chinese NIO.

Lithium Iron Phosphate (LFP) batteries present a number of advantages over the Nickel Cobalt Manganese (NCM) batteries currently used by Ford, mainly their durability and their lower cost.

Indeed, this chemistry is able to better tolerate frequent and faster charging than the current type used in the Mustang Mach-E and the F-150 Lightning, while also being more sustainable and cheaper to manufacture due to its reduced reliance on rare-earth minerals.

On the other hand, the current NCM units provide more power and energy and they are less affected by cold temperatures.

This is why the automaker chose to continue using both battery types in parallel instead of replacing NCM entirely.

Ford LFP battery | Photo: Ford

According to Ford, the lower cost of the LFC technology will allow it to introduce a number of affordable electric passenger vehicles and trucks which are currently under development.

Despite the new factory only coming online in 2026, the Mustang Mach-E will receive LFP batteries starting this year and the F-150 Lightning will have them in 2024.

Since Ford says its current goal is to reduce waiting times, LFP and NCM batteries will most likely be used in specific trim levels and versions of both EVs.

The automaker benefited from an agreement with CATL, the world’s leading EV battery supplier, to gain expertise in the area of LFP batteries.

Making the batteries in Michigan will allow the company’s vehicles to be eligible for federal incentives in the United States as well as qualify the automaker for subsidies that could help lower its production costs.

With a planned capacity of 35 gigawatt hours annually, this factory should be able to provide the batteries for around 400,000 electric vehicles each year.

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