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It’s been a big year for Ford as the automaker’s electric vehicle rollout continues to build momentum. Ford is now considering adding additional EV battery cell operations in the US. According to a new report, Ford is considering an EV battery factory in the US with China’s CATL that includes a unique arrangement to collect tax benefits.
Ford is mulling additional US EV battery capacity
Sources familiar with the matter say Bloomberg Ford could choose its home state of Michigan or Virginia. However, the arrangement will not be common.
To take advantage of the new tax benefits provided by the Inflation Reduction Act, Ford will reportedly own 100% of the US facility. At the same time, CATL will run operations using its technology to develop battery cells. The ownership structure will prevent the bill’s strict domestic production requirement.
The IRA bill provides a substantial tax credit for domestic EV battery cells, equal to $35 per kWh of capacity. Meanwhile, US-made battery packs can get a credit of up to $10 per kWh of electricity.
The new EV battery plant will supply lithium iron phosphate batteries to support Ford’s expected electric vehicle push in the coming years.
Ford said in July that it has secured 70% of the EV’s battery minerals needed to achieve its target of 2 million run rates from 2026 after partnering with SK Innovation and CATL. In addition, the automaker broke ground on its BlueOval SK Battery Park earlier this month, which is set to play a key role in Ford’s EV ramp-up.
In November, Ford expanded its electric vehicle market share in the US by about 2%, maintaining its position as the number-two EV maker. Meanwhile, Ford CEO Jim Farley insists they’re aiming for the top.
Ford added a third shift at its Rouge electric vehicle center in November to ramp up production of its high-demand F-150 Lightning EV pickup and work on its massive backlog.
Electrek’s Take
To close the gap with current leader Tesla, building a reliable EV supply chain will be critical for Ford and any automaker looking to scale up production and compete in the new EV era.
That said, I expect more details of the deal between Ford and CATL to emerge soon. CATL has just signed an agreement with Honda to supply 123 GWh of batteries to power more than 1 million electric vehicles to support its EV expansion.
As the race to grab EV market share heats up, automakers are rushing to lock up critical battery minerals. And with the tax benefits provided by the IRA bill, the US has become a hot spot for EV battery investment.
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