Ford’s 2023 announcement that it would build the first automaker-backed lithium iron phosphate EV battery plant in the US was touted as an example of the Inflation Reduction Act’s success.
Two years later, the future of major IRA provisions is uncertain amid wrangling over the federal budget in the Republican-controlled Congress. And a House version of the controversial budget bill would nix credits for batteries that use Chinese tech—Ford’s exact model for the plant, per a licensing agreement with Chinese battery giant CATL.
But Ford executives say the company is staying the course on its $3 billion BlueOval Battery Park Michigan, which is now more than halfway complete—even as the project stands to lose major federal incentives, namely the IRA’s 45X Advanced Manufacturing Production Tax Credit, which subsidizes investments in domestic battery manufacturing and could represent hundreds of millions of dollars in tax credits for Ford.
“When we invest, we stick behind our investments,” Lisa Drake, Ford’s VP of technology platform programs and EV systems, told reporters this week during a tour of the Marshall, Michigan, site. “Ford is a company that will weather the storm until we get there. But there’s a great opportunity to help not only Ford, but all of the auto sector stay in this game and keep these battery jobs here. Now it’s going to just be up to the administration.”
Ford
Gearing up: Ford broke ground on the plant in early 2023, and is slated to start production on prismatic LFP battery cells and packs next year. The automaker will soon start installing the equipment, now en route from China. Drake confirmed Ford had to pay tariffs on the equipment.
“It’s a long-term play,” she said. “Even with the tariffs, this is still the right thing to do.”
Ford plans to have about 1,700 employees at the plant, which spans 2 million square feet and will have an annual production capacity of 20 gigawatt hours.
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Ford is now producing C-sample cells—the final prototype versions—at an offsite “equipment supplier location” and will soon use them for “design-confirmation sign-off in our next-generation electric vehicle program,” according to Drake.
Chemistry: Ford aims to have three battery chemistries in its EV portfolio: nickel manganese cobalt, or NCM, today’s dominant chemistry; LFP, the cheapest option; and the emerging LMR chemistry.
The automaker has three other battery plants in the US: two in Kentucky and one in Tennessee, all joint ventures with South Korean battery maker SK On, and all focused on NCM.
Drake said that Ford leaders faced a choice on LFP: continue to pour resources into R&D or license the tech and bring it to market faster.
“It probably would have taken us a decade to catch up and have LFP technology on our own with our own R&D,” she said. “We didn’t have time. And that’s not where you want to spend the investment. If Ford has capital, we want to spend our investment creating the manufacturing jobs here.”
Under its licensing agreement with CATL, Ford controls the equipment, plant, and workforce; CATL employees will train BlueOval Battery Park workers on the equipment.
Though the policy landscape has shifted dramatically, Drake said Ford executives still see this as the right choice, in part because it gives the company more control over its supply chain—but they’re still lobbying for federal support.
“When EV adoption slowed, it just became a huge headwind to us. It’s going to pick up; we believe we’ll ultimately be there by the end of the decade” she said. “In this interim period where that adoption slowed, but we still made this big capital investment, the [production tax credit] will allow us to keep on that path and keep going.”