by Ford’s Michigan plant is finally operational
Construction of Ford’s controversial battery plant in Michigan has been completed, and production is already underway. The facility is now manufacturing batteries using technology licensed directly from Chinese giant Contemporary Amperex Technology Co, better known as CATL.
CATL’s role in production
CATL Vice Chairman Meng Xiangfeng confirmed earlier this week that work at the site is complete and battery production started in June. The company not only provided Ford with technology for lithium-iron-phosphate batteries but also helped build the plant and supports its daily operations.
A difficult path to launch
Achieving this milestone was not easy for either Ford or CATL. The joint plant and licensing agreement were first announced in February 2023, during Joe Biden’s presidency and before the current President Trump repealed the Inflation Reduction Act with his law “One Big Beautiful Bill” last year.
This agreement drew criticism from the start. House Republicans initially sought to bar any batteries involving Chinese companies from receiving federal tax incentives. The manufacturing credit was removed in early versions of the bill, but the final law retained it for batteries and preserved Ford’s existing arrangement with CATL. As early as January, the Republican chairman of the House committee wrote a letter to CEO Jim Farley, questioning Ford’s plan to build energy storage batteries using CATL’s technology.
Changes in plans and new directions
Under the initial terms, the plant would have entitled Ford to a government subsidy of $45 per kilowatt-hour of batteries produced. The plant was originally designed for an annual capacity of 35 gigawatt-hours (GWh), enough to supply up to 400,000 electric vehicles.
Later, Ford scaled back its plans for the plant, reducing investments to $2 billion and lowering the expected production volume to 20 GWh.
Perhaps more importantly, Ford moved away from its original plan to use licensed LFP batteries from CATL solely for electric vehicles. The company now intends to use them for energy storage as well. This shift is already being implemented at the joint Ford and CATL plant in Kentucky. Ultimately, Ford plans to use at least 20 GWh of such batteries annually in energy storage systems.
The launch of the Michigan plant is a significant step for Ford as it seeks to reduce reliance on imported components for electric vehicles. However, political pressure and the company’s shifting strategy—now betting not only on electric vehicles but also on energy storage systems—indicate that the “green” technology market remains volatile. Cooperation with a Chinese partner, despite all the controversy, allows Ford to access advanced technology, but it also makes the company vulnerable to political risks. The reduction in initial production capacity ambitions suggests the automaker is cautious amidst uncertainty in the electric vehicle market.
