Ford To Build Cheaper LFP Battery Packs At New Michigan Factory

Ford announced a $3.5 billion investment to build a new battery plant in Marshall, Michigan, today. The facility will produce lithium iron phosphate (LFP) batteries, giving the automaker a second battery chemistry in addition to the nickel cobalt manganese (NCM) one it already offers. The new battery technology should help lower costs for consumers and make Ford’s EVs more available.

The plant, called BlueOval Battery Park Michigan, won’t begin production until 2026. However, Ford will start installing the new batteries into the Mustang Mach-E later this year and the F-150 Lightning starting in 2024 with the goal of reducing wait times for customers. The LFP battery will become the standard-range offering, but the automaker didn’t detail any pricing information.

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LFP batteries use fewer high-demand and high-cost materials, offer exceptional durability, and feature faster DC charging capabilities. These benefits come at a cost, with NCM batteries providing more energy, more power, and better cold-weather performance by comparison. However, through anonymized data, Ford discovered that 95 percent of Mach-E owners start trips with ambient temperatures above freezing. The automaker also discovered that the median distance a Mach-E travels daily is 32 miles. 

Ford’s new battery plant will have an initial production capacity of 35-gigawatt hours. That’s enough to power approximately 400,000 Ford EVs a year while creating 2,500 new jobs. Ford reached a new agreement with Contemporary Amperex Technology Co., Limited (CATL) to use its LFP battery technology and services provided by the company, with the automaker manufacturing the battery cells through its wholly owned subsidiary.

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“To get as many Ford EVs to customers as possible, we’re the first automaker to commit to build both NCM and LFP batteries in the United States,” said Ford President and CEO Jim Farley.

Since 2019, Ford has announced $17.6 billion in EV and battery production investments in the US. The automaker hopes to reach an annual run rate of 600,000 EVs globally by the end of 2023 and 2 million by the end of 2026. Ford believes that localizing and diversifying the supply chain in countries where it produces EVs will improve their affordability and availability.