Ford said Monday it is investing $3.5 billion to build a factory in Michigan that will makes two kinds of batteries for its growing portfolio of electric vehicles.
The factory, which will be located in Marshall, Michigan, will notably build both nickel cobalt manganese (NCM) and lithium iron phosphate (LFP) batteries. Ford said it is working with Chinese company Contemporary Amperex Technology Co, known as CATL, confirming previous coverage that speculated on the partnership. Under the arrangement, Ford’s wholly owned subsidiary would manufacture the battery cells using LFP battery cell knowledge and services provided by CATL.
Production is expected to begin in 2026. The factory, called BlueOval Battery Park Michigan, will initially employ 2,500 workers, according to the company. Ford will have the option to further grow its battery capacity plant.
Ford said it is adding the iron-based batteries to its lineup this spring, starting with the Mustang Mach-E, CEO Jim Farley said during a press conference Monday.
Ford’s decision to manufacture LFP batteries in the United States is part of a trend among automakers to adopt this an older, cheaper and safer technology. Tesla, for instance, already uses LFP batteries in the EVs it makes and sells in China.
China has owned the LFP market for nearly a decade due to an agreement with a consortium of universities in the U.S. and Canada that hold patents on the technology. But that is poised to change as access to patents open up and the cost of battery materials rise. LFP doesn’t use scarce raw materials like cobalt and nickel, and are less likely to catch fire, two benefits that automakers have homed in on as EV portfolios grow.
The $3.5 billion factory is part of Ford’s plan to invest more than $50 billion in electric vehicles globally through 2026. Ford said it plans o 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.
“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 Ford executive chair Bill Ford said in a statement. “I am also proud that we chose our home state of Michigan for this critical battery production hub.”