Ford Motor Co. on Monday is expected to detail a multi-billion-dollar investment with a Chinese company to build an electric-vehicle battery plant on a site in mid-Michigan, The Detroit News has confirmed.
The automaker is poised to unveil a project worth at least $2.5 billion that would create roughly 2,500 jobs in partnership with Contemporary Amperex Technology Co. Ltd., the world's largest producer of lithium iron phosphate batteries, according to four sources with knowledge of the project who were not authorized to discuss it ahead of Monday's announcement.
The project will land on the Marshall Megasite, a 1,900-acre property in southwest Michigan's Calhoun County that local and state officials have long been preparing for such a development. Under the plan, Ford would own the land, plant and manage the workforce; CATL would be the technology partner to develop and build LFP batteries for Ford's electric vehicles; and Ford would be the recipient of any state incentives, the scope of which are still taking shape.
Ford and the Michigan Economic Development Corp. declined comment. Gov. Gretchen Whitmer's office did not immediately respond to requests for comment. The automaker has scheduled a news conference in Romulus for Monday afternoon "to share news on how Ford, America's No. 2 EV company in 2022, is working to scale EVs quickly and, ultimately, make them more accessible to customers." The governor is scheduled to attend.
Momentum coalesced around Michigan as a finalist for the project after Virginia Gov. Glenn Youngkin, a Republican and possible 2024 presidential candidate, in December said he pulled Virginia out of consideration for the project due to his objections over the involvement of a Chinese partner and its alleged ties to China's ruling communist party.
In recent days, signs emerged that Ford was closing in on the Marshall site, which sits near the interchange of Interstate 69 and I-94 in an agricultural community just over 100 miles west of Detroit. Two Ford government affairs executives met with Calhoun County leaders Wednesday to brief them on details of the proposal, two sources familiar with the situation confirmed to The News earlier this week.
Bolstered by new federal incentives to support the buildout of domestic supply chains for EV components, Detroit's automakers are racing to establish domestic battery manufacturing bases. They have largely made these investments with partners based in Asia. Ford, for example, is building battery plants in Tennessee and Kentucky with South Korean partner SK On, and General Motors Co. is partnering with South Korean company LG Energy Solution on a trio of battery plants in Ohio, Michigan and Tennessee.
Over the past several weeks, the Marshall Area Economic Development Alliance, or MAEDA, has acquired more than 1,000 acres comprised of several properties to put them under a single owner. James Durian, CEO of the Marshall development alliance, wrote in a letter obtained by The News earlier this week that the company interested in the Megasite would create an estimated 2,500 "new high-paying jobs in the EV battery manufacturing industry."
"MAEDA is in the process of purchasing property and we have a company that is showing strong interest," Durian wrote. "The property purchases are with MEDC funding. The Township and City have meetings to transfer some Megasite property from the township to the City to advance the development process."
In an interview with The News, Durian added MAEDA so far has purchased more than 700 acres and is adding more this week. MAEDA has almost 2,000 acres under option agreements and is in the process of purchasing another 400 acres, he said: “As we get funding and permission from the state, we're purchasing properties."
Last year, Ford said it had reached a memorandum of understanding with CATL to explore a battery supply agreement. At that time, the Dearborn automaker also said it planned to localize LFP battery production in North America, though executives at the time declined to provide further information.
A privately held company with global operations and since 2018 a location in Auburn Hills, CATL is already one of Ford's battery suppliers. The automaker previously said that the Chinese company would supply full LFP battery packs for the Mustang Mach-E in North America starting this year, and for the F-150 Lightning starting next year.
Localizing battery cell production through partnerships with battery makers has been key to the strategies of Ford and other automakers to shore up their EV supply chains amid an increasingly competitive environment. Ford aims to produce 600,000 EVs globally by the end of this year and 2 million globally by 2026 as it chases market leader Tesla Inc.
Meanwhile, steps were taken in Lansing this week to replenish a business incentive program that could benefit the Ford-CATL project. The balance of Michigan's Strategic Outreach and Attraction Reserve, or SOAR, fund is roughly $890 million, with nearly $400 million of that committed to battery projects by Chinese-controlled Gotion Inc. and Novi-based Our Next Energy.
The Michigan House approved a bill Thursday that would divert about $500 million in corporate income tax revenue toward SOAR each year for the next three years, but only after corporate income tax revenue breaches $1.2 billion and $100 million is given to housing and community development efforts. The funding plan still requires the approval of the Senate and Whitmer's signature.
Whitmer also sought in her budget Wednesday an additional $800 million one-time deposit into the fund, but it's not clear when or if the Legislature would appropriate that funding.
The SOAR fund was established in December 2021 after Ford's selection of Kentucky and Tennessee for an $11.4 billion investment with SK On in an EV assembly plant and multiple battery plants shook Lansing political leaders and the business community. The fund has benefited Gotion, Our Next Energy Inc., as well as General Motors Co., which is making EV investments in Lake Orion and Delta Township.
U.S. Rep. Tim Walberg, R-Tipton, who represents the Marshall area in Congress, said neither Ford nor the governor's office communicated with him about the deal before it was secured. Having more than 2,500 "jobs come to the Marshall community is good news and reflects a local emphasis on creating conditions ripe for investment," he told The News via email. "However, it is concerning to have a Chinese battery manufacturer, especially considering recent provocations."
U.S.-China relations are considered to be at their lowest point in decades, as economic competition between the two superpowers ratchets up and political and diplomatic tensions remain high. Disentangling U.S. supply chains and protecting intellectual property from China is currently a rare area of bipartisan agreement in Washington. Less than a week ago, a U.S. fighter jet shot down a Chinese spy balloon over the Atlantic.
Whitmer has not expressed concerns about the Chinese battery maker's involvement. After Youngkin, a potential GOP presidential nominee, rejected the plant in his state, Whitmer used an interview with The News to call the move a "political determination," adding: "We are proud that Ford is an American company, Ford is a Michigan company. We are going to compete for every opportunity for the State of Michigan."
The MEDC has earmarked grants totaling more than $1.6 million for site preparation efforts and due diligence studies for the Marshall Megasite, according to the agency. Those funds have gone to Calhoun County and MAEDA.
“Assembling the land for a project like this is a long-term effort and something that we have over the last 18 months aggressively caught up with other states that I've been doing this for a decade or more,” Josh Hundt, MEDC chief project officer, said in an interview Thursday. “We needed to be able to move along with the speed of business to have these sites ready. And the businesses needed to see that they were able to access the land and that it was land that was available for their type of development.”
He added: “Site development is an important aspect of our overall economic development strategy here in the state, and it is a component to making sure that our economic development efforts are best in class and provide locations for projects that bring jobs to Michigan. Our role is really ensuring that we continue to partner with the community to develop this site and working with other communities across the state to develop other sites.”
