- Ford is “on track” to obtain federal funds for its giant lithium iron phosphate battery manufacturing plant in Michigan.
- It could mark a serious win for the automaker, as it prepares to launch multiple next-generation affordable EVs, developed by its “skunkworks” teams.
- The LFP supply chain has long been dominated by China. But American manufacturing of automotive-grade LFP cells marks a pivotal moment for the industry.
Ford’s upcoming electric vehicle battery plant in Michigan should still qualify for production credits under the Trump administration’s newly enacted legislation, the automaker said on Tuesday. If that happens, it could mark a major win and a turning point for the Dearborn automaker’s EV plans. The federal funding could help offset manufacturing costs for Ford’s next-generation affordable EVs.
“Ford is committed to making the best, most cost-effective batteries for the next generation of electric vehicles in the United States,” Ford said in a statement. “The BlueOval Battery Park Michigan is on track to qualify for the production tax credit—a win for our customers and a win for American competitiveness,” the automaker added. Reuters reported the news first.
The $3 billion BlueOval Battery Park Michigan is already 60% complete and slated to begin producing lithium iron phosphate (LFP) batteries next year. These batteries, which are cheaper and more durable than traditional lithium-ion packs (but less power-dense), will power Ford’s upcoming affordable EVs. The Marshall, Michigan, facility is the first in the U.S. to make automotive LFP batteries.
20
Source: Ford
The LFP supply chain has for years been dominated by China. But LFP tech is now going global. Auto executives increasingly see it as key to making affordable, mass-market EVs.
“This is an opportunity for Ford to lead in this space and bring the technology back to the U.S.,” Lisa Drake, Ford’s vice president of Technology Platform Programs and EV Systems, told InsideEVs in an interview in June during a tour of the BlueOval Battery Park Michigan.
The Trump administration’s “One Big Beautiful Bill,” now signed into law, dramatically undercuts federal support for clean energy. The clean vehicle tax credit is being phased out far earlier than expected, fuel economy rules have been rolled back and the Environmental Protection Agency is reportedly preparing to loosen its Multi Pollutant Emissions Criteria—again.
Still, incentives for domestic battery manufacturing remain intact, at least in some capacity. The rules are now stricter, requiring a higher share of raw materials to be sourced from within the U.S. But projects that were already under construction by the end of 2024, such as Ford’s LFP plant, are not affected under Section 45X of the advanced manufacturing credit, and therefore do not need to meet the tougher requirements.
Ford broke ground on the LFP plant back in 2023 and seems relatively shielded from the new restrictions under the newly passed spending bill. That’s a relief for the company, as the plant has drawn scrutiny from Republican lawmakers over Ford’s licensing agreement with Chinese battery giant CATL, which some have alleged has ties to forced labor over in China.
But the automaker said the plant is key to bringing affordable EVs to the masses and to bring back LFP tech—which was invented at the University of Texas at Austin—to the U.S. It will support 1,700 manufacturing jobs when complete.
Plus, Ford has long maintained that the new battery plant is “Ford-owned” and “Ford-operated.” The CATL collaboration is merely a “legal fact” because of who owns the patents and the licensing deal which will allow for the technology to truly proliferate in the U.S.
Have a tip? Contact the author: suvrat.kothari@insideevs.com