According to reports, Ford plans to build a $3.5 billion EV battery facility in Michigan

According to reports, Ford is just a few days away from announcing a strategy to boost its supply of US-made electric vehicle batteries. The automaker and China’s Contemporary Amperex Technology Co (CATL) are working together to build a $3.5 billion iron phosphate battery plant outside of Marshall, Michigan, a small town about 100 miles west of Detroit, according to Reuters. The announcement could come as early as Monday. It is anticipated that the facility will employ at least 2,500 people when it is finished.

Bloomberg points out that despite the uncertainty surrounding how the Treasury Department will interpret President Biden’s landmark climate change bill, Ford is continuing with the project. In particular, there is language in the Inflation Reduction Act that aims to stop automakers from using consumer EV tax credits if they make cars with batteries made by a “foreign entity of concern.” The regulations were created by Congress to encourage automakers to establish domestic supply chains for EV components rather than relying on China for crucial components.

According to report, Ford has thought about establishing a structure of ownership in which it would own the entire plant as well as the infrastructure in the area. The facility would also employ Ford workers. Only the battery-making technology would be owned by CATL. It’s a deal that could make batteries made at the facility eligible for tax credits related to the Inflation Reduction Act. According to a Ford, “We’ve said that we’re exploring batteries based on CATL’s technology for Ford vehicles and that we plan to localize.”

Ford announced in July that it would begin procuring batteries from CATL for the 2023 Mustang Mach-E models that will be sold in the United States. The company announced in the same month that it would begin producing 40 gigawatt hours of battery capacity in North America in 2026.