Ford Abandoned Its Quest to Outperform China in Battery Production and Opted for a Partnership Instead | Carscoops
A new battery plant in the US will produce storage cells using Chinese technology after significant EV partnerships were terminated and political tensions nearly jeopardized the project.
Ford is constructing a battery facility in Michigan using CATL's technology, with licensed Chinese LFP cells powering energy storage systems. The company claims that replicating this technology on their own would require a decade.
Ford is not only reducing its electric vehicle (EV) initiatives but is also reevaluating its battery strategy. This month, the automaker canceled two significant EV battery agreements: a joint venture with South Korea’s SK On worth $11.4 billion and a $6.5 billion supply deal with LG Energy Solution.
While Ford is temporarily slowing its EV aspirations, it is increasing focus on a different type of battery designed for entire energy grids.
The automaker signed a licensing agreement in 2023 with Chinese battery giant CATL to utilize its lithium iron phosphate (LFP) technology. Initially, the plan was to produce EV batteries using CATL’s chemistry, allowing for in-house production with advantages from one of the world's largest battery manufacturers. However, this strategy has now shifted.
Instead of integrating CATL’s LFP chemistry into vehicles, Ford will use it to create large-scale batteries intended for energy storage. These batteries will be manufactured en masse for utility companies and grid operators.
"Considering we already held a license to produce that technology in the US, combined with our extensive manufacturing experience over the past century, it naturally aligns with our goals," Ford’s vice president of technology platform programs and EV systems, Lisa Drake, stated to Bloomberg.
Ford has navigated a complex political landscape to establish its agreement with CATL. Virginia’s governor declined Ford’s proposal to construct a battery plant there citing its Chinese connections. The company is now setting up its plant in Michigan, which is expected to open next year.
As the Trump administration aims to lessen America's dependency on Chinese products, Ford believes its strategy is more favorable than continuing to import batteries from China, which have become prevalent in the US energy sector.
Ford contends that in light of the ongoing needs of US energy providers, it is logical to support efforts to produce batteries domestically rather than relying on imports from China.
The car manufacturer has also discussed with potential customers to gauge interest in purchasing energy storage cells and received strong positive feedback. LFP cells are advantageous not just for EVs but also for energy storage, which justifies Ford's decision.
Ultimately, Ford aims to create its own cost-effective batteries, utilizing insights gained from its partnership with CATL. According to Drake, without this collaboration, it would have taken Ford ten years to develop competitive LFP technology independently.
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Ford Abandoned Its Quest to Outperform China in Battery Production and Opted for a Partnership Instead | Carscoops
A new battery facility in the US will produce storage cells utilizing Chinese technology following the cancellation of significant electric vehicle agreements and the political tensions that nearly jeopardized the project.