- Ford has announced that it will open a plant in Marshall, Michigan, specifically to produce lithium-iron-phosphate (LFP) batteries for future electric vehicles.
- By offering this second battery chemistry in addition to nickel cobalt manganese (NCM) batteries, the automaker will boost EV production and lower costs.
- Ford is teaming up with China’s CATL to offer the lithium-iron-phosphate cells — by first buying them and then starting to build them in Michigan in 2026 — in the Mach-E and F-150 Lightning, then other EVs
Ford announced this afternoon that it will offer a second type of battery chemistry, known as lithium iron phosphate, or LFP, in two electric vehicles on sale now. The LFP battery packs will become standard on the base Select trim of the Mustang Mach-E electric crossover this year, and the base XLT version of the F-150 Lightning full-size pickup next year, as Ford announced last July.
The company has now announced that it will build a dedicated battery plant in Marshall, Michigan to manufacture LFP cells starting in 2026, at a cost of $3.5 billion. This plant will use technology licensed from the world’s highest volume cell manufacturer, Contemporary Amperex Technology Limited (CATL) in China. Until that plant comes online, Ford will buy cells directly from CATL to use in the base models of those two EVs and others.
New battery, same series
Using a second battery type allows the company to ramp up production of EVs more quickly, and it will also lower the cost of batteries to make EVs more affordable for more buyers, said Lisa Drake, vice president of EV industrialization for Ford Model E. its EV unit, said. . The company expects to build EVs at a rate of 600,000 per year by the end of this year and two million per year by the end of 2026.
Consumers won’t immediately notice much difference in the base Mach-E and F-150 Lightning models with the new battery. Both models will retain the same EPA-rated range, according to Marin Gjaja, chief customer officer for Ford Model E. For the Mach-E Select, that’s 224 miles combined; for the rear-wheel-drive F-150 Lightning XLT, it’s 230 miles. Other versions of both models will stick with their current nickel-cobalt-manganese cells, supplied by Korean firm SK Innovation.
LFP cells have at least one advantage: they recharge easily from 0 to 100 percent, so drivers can use the full range of those batteries and then quickly charge them to full with confidence. Ford’s anonymous user data suggests that the average Mach-E covers 32 miles per day, with an average trip length of 5 miles—though American buyers frequently ignore the average usage and buy for their most extreme use case.
More challenging is the lower performance of LFP cells in cold weather. Ford notes 89 percent of F-150 Lightning trips and 95 percent of Mach-E trips started in ambient temperatures above freezing. That suggests the LFP cells in the base models of each EV may be better suited to Sun Belt buyers than those in states that get snowfall — perhaps including his home state of Michigan.
Big cash on the horizon
It’s too early to tell the new batteries’ effect on base EV prices, Gjaja said, but their use of commonly available materials—iron and phosphate—insulates the cells from the rising costs of cobalt, nickel- and manganese metals used in EV. batteries up to date.
“Adding large-scale LFP to the mix will be important for Ford and other OEMs because the critical minerals are so much more readily available compared to nickel-rich chemistries,” explains Sam Abuelsamid, lead e-mobility analyst at Guidehouse Insights. “Expanding the production of nickel and cobalt for the kind of vehicle production that these companies are targeting is just not realistic by 2030.”
More importantly, though, a provision of the federal Inflation Reduction Act signed last year funds 10 years of production credits for manufacturing battery cells in the US from materials sourced from a limited list of countries. Called Section 45X, its subsidies of up to $45 per kilowatt-hour are expected to make US-built EV batteries so cheap that large parts of Western cell and battery manufacturing will rush to locate in North America.
Asked if she expected the planned LFP plant in Michigan to fully qualify for those incentives, Ford’s Drake responded in one word: “Absolutely!”
The China issue
Licensing battery technology from a Chinese company carries significant political risk. That’s especially true right now: Last month, Virginia Gov. Glenn Youngkin ended his state’s bid to land the Ford cell plant now slated for Michigan. His administration previously characterized the plant as a “front” for the Chinese Communist Party.
But tight supplies of other battery metals and its goal of 2 million EVs a year by 2026 have seemingly left Ford with no other option. In the words of old China hand Michael Dunne, CEO of consulting firm ZoZo Go: “Ford has declared it is going to the LFP dance, and it needs a date. The only dates available are from China: either CATL or BYD.
“It’s a reality check on where Ford and the burgeoning U.S. electric vehicle industry are today,” Dunne added. “They can’t get LFP technology without China.”
A Ford subsidiary will build and operate the Marshall battery plant and license the CATL technology, with a planned annual output of 35 gigawatt-hours at full capacity, or enough for 400,000 EVs per year. That suggests the plant could provide 20 percent of Ford’s 2026 EV production, though continued purchases of LFP cells could push that percentage higher.
The creation of a separate company to build batteries mirrors previous arrangements between General Motors and Korean cell maker LG Energy Solutions for two cell plants announced in previous years. Prototype cells are now coming out of the first, in Warren, Michigan; production should begin at the second, in Spring Hill, Tennessee, by the end of the year.
Ford follows Tesla
But Ford remains the only US automaker to have announced it will fit LFP cells to its EVs and build an American plant to supply them. The Tesla Model 3 Standard Range sedan, its base trim, has been using LFP cells since last year, but those battery cells are imported (as Ford’s will be initially). Tesla has no announced plans to set up US production of LFP cells.
Other automakers, including Volvo, Stellantis and VW Group, have announced their intention to use LFP in addition to nickel chemistry, Abuelsamid pointed out, but none have announced product launches or plans to build those cells in the US.
The only other US LFP plant to date is a smaller 20.0-GWh cell factory announced by Our Next Energy, a Michigan battery company. Chinese cell maker Gotion plans to produce battery materials at a Michigan factory, but its expected announcement of a deal with a major automaker has yet to appear.
