Ford's New $3.5 Billion Battery Factory Will Help Lower EV Prices

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The lithium-iron-phosphate batteries will soon be found in the Mustang Mach-E and F-150 Lightning.

Ford has announced it is partnering with China's Contemporary Amperex Technology Limited (CATL) to build a new $3.5 billion battery plant in Marshall, Michigan, that will produce lithium-iron-phosphate (LFP) batteries for future electric vehicles. These LFP battery packs will become standard on the base Select trim of the Mustang Mach-E later this year and the XLT F-150 Lightning next year.

The new facility, called BlueOval Battery Park Michigan, won't begin production until 2026, and the automaker will utilize technology licensed from CATL. Until that happens, Ford will buy these batteries directly from CATL.

This will be Ford's second battery type. It currently uses nickel cobalt manganese (NCM) batteries, but the new technology will allow for two things: faster EV production rates and lower prices.

2021-2023 Ford Mustang Mach-E Front Angle View CarBuzz
2021-2023 Ford Mustang Mach-E Rearward Vision CarBuzz
2022-2023 Ford F-150 Lightning Front Angle View CarBuzz
2022-2023 Ford F-150 Lightning Side View CarBuzz

Ford did not provide updated pricing information. LFP batteries require less high-demand, high-cost materials. The multi-billion dollar investment will directly lead to the creation of 2,500 new jobs, and Ford says it has the option further grow the plant's battery capacity. The facility itself will be a wholly owned Ford subsidiary.

"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. "I am also proud that we chose our home state of Michigan for this critical battery production hub."

This is the same battery plant Ford and CATL were looking to build in the state of Virginia, but its governor rejected the plan due to concerns over Chinese government influence.


However, CATL is not owned by the Chinese government and already operates 13 facilities in Europe and Asia. Among its customers are Honda and Tesla. Virginia's loss is Michigan's gain, according to Michigan Governor Gretchen Whitmer.

"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," she said. 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."

Ford understands that diversifying and localizing its battery supply chain in countries where it builds EVs is critical, primarily as it works towards its goal of delivering an annual rate of 600,000 electric vehicles globally by the end of this year and 2 million by the end of 2026.


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