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DAGENHAM, ENGLAND - JANUARY 13: An employee walks past a Ford logo in the yet-to-be-completed engine production line at a Ford factory on January 13, 2015 in Dagenham, England. Originally opened in 1931, the Ford factory has unveiled a state of the art GBP475 million production line that will start manufacturing the new low-emission, Ford diesel engines from this November this will generate more than 300 new jobs, Ford currently employs around 3000 at the plant in Dagenham.

Michigan Battery Plant

Ford and Contemporary Amperex Technology Co. Ltd. will build an EV battery plant in Michigan. Based on a report from Reuters, the plant costs $3.5 billion to build and will produce lithium-ion phosphate batteries. 

The battery plant is expected to be located in the Marshall, Michigan area with a total of 2,500 workers. The location was marketed by the state as a 1,9000-acre Marshall mega site. This factory can potentially bring more jobs and a larger investment for both companies. 

While Ford and CATL did not confirm or denied this news, the agreement could be announced next week.

While this may sound easy for a well-known company, Ford may struggle to process this project since there is uncertainty on how the United States Treasury Department will interpret the requirements in President Joe Biden's Inflation Reduction Act, especially since this law was designed to withhold consumer tax credits for EVs made with Chinese materials. 

"We've said that we're exploring batteries based on CATL's technology for Ford vehicles and that we plan to localize production in North America," Ford stated in a statement. Meanwhile, CATL did not release any details regarding this matter. 

China's CATL is known as the biggest maker of batteries for electric vehicles globally. This partnership with Ford has been weighing a novel ownership structure since last year. Despite owning the building and infrastructure, Ford workers would just build the batteries but CATL will own the technology to create the cells.

Through this arrangement, both companies may allow the facility to qualify for lucrative production tax credits under IRA, while at the same time, there will be no required direct financial investment from CATL. 

Previous Location

Both companies considered placing the plant in Virginia. Bloomberg reported that this option was scrapped due to a statement released by Virginia Governor Glenn Youngkin that called CATL a "Trojan Horse" for China.

Also Read: Ford Cuts Price on its Mustang Mach-E Electric SUV

Meanwhile, Michigan Governor Gretchen Whitmer stated a different position on this matter, as she called Youngkin's statement a political determination. Whitmer has been aiming to attract EV investments after Tennessee and Kentucky backed out on Ford's $11.4 billion Blue Oval City investment.

US News reported that Ford revealed its plans last July to localize 40 GWh of battery capacity in North America by 2026. An agreement with CATL is also aimed to explore supplying battery packs for Mustan Mach-E models for North America starting this year.

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