Ford Motor Co. announced Monday plans to build BlueOval Battery Park Michigan, a $3.5 billion electric vehicle battery plant that would create 2,500 jobs in Marshall. But it wasn’t always destined for Michigan.
The Dearborn-based automaker will build the lithium iron phosphate, or LFP, battery factory on a 950-acre site in Calhoun County near I-69 and I-94, with room for future expansion, according to executives.
It is expected to begin production in 2026.
Ford will license technology and contract services from the world’s largest battery maker, Contemporary Amperex Technology Co. Ltd., which is based in China. Ford will wholly own the plant and employ the workers.
Ford is the first automaker to announce domestic production of LFP and nickel cobalt manganese (NCM) batteries, which it is doing with SK On in Kentucky and Tennessee.
“Producing these LFP batteries in the U.S. really diversifies our battery supply chain and expands our production capacity through yet another avenue,” Lisa Drake, vice president of EV Industrialization for Ford Model e, said on a call Monday with reporters.
The new LFP plant in Marshall marks a major advancement of EV battery manufacturing in the country and solidifies Michigan’s place in the electrified supply chain.
Quentin Messer, CEO of the Michigan Economic Development Corp., said the state began aggressively pursuing Ford investments in the wake of the automaker’s announcement in 2021 that it would invest $11 billion in EV plants and create thousands of jobs in Kentucky and Tennessee.
Ford had initially considered establishing a battery plant in the Windsor, Ontario, area before CATL entered the picture and Mexico became its likely home. Then, the federal Inflation Reduction Act passed in August, affording automotive companies lucrative tax credits for domestic manufacturing, and Michigan doubled down on its efforts to land the plant, Messer said.
Drake said the IRA steered Ford away from Canada and Mexico.
“The IRA was incredibly important for us, and frankly it did what it intended to do,” she said. “It allowed the United States to capture 2,500 fantastic technical jobs and all the indirect jobs that go with it, plus future growth. So, a big win for the U.S.”
Ford confirmed it was considering Virginia for the investment but declined to name other competitors.
Kentucky, Tennessee and Indiana are also believed to have been in play, Messer said, adding that the state is typically not told who else is competing.
“It didn’t mean it was going to come to Michigan,” Messer told Crain’s in a recent interview. “We still had to go out and fight for it because people still are aggressively calling Ford even today.”
The MEDC on Monday approved roughly $1 billion in cash and tax break incentives for the project, including a $210 million Critical Industry Program grant from the Strategic Outreach and Attraction Reserve (SOAR) Fund and a Renaissance Zone property and real tax exemption worth $772 million over 15 years. The package also included a $36 million loan.
While the state funneled dollars to accelerate efforts to make the Marshall megasite more development-ready, the Marshall Area Economic Development Alliance began triggering land purchase options late last year to bring the property under control of one entity.
Virginia Gov. Glenn Youngkin said earlier this month that he removed his state from consideration for the factory because it would serve as a “Trojan horse” for China into the U.S., helping the Far East bolster its EV battery dominance and spread its influence.
Critics have accused the Republican governor of putting his political ambitions ahead of new jobs. Others have said Virginia was never a realistic option for Ford given its assembly plants are not near Virginia.
“If others want to play political games with economic opportunity, that's their decision,” Messer said. “But my responsibility is to focus on economic development, and I’ll let the elected officials decide upon public policy, but there is nothing legally preventing the pursuit of this investment.”
Bill Ford, executive chair of the automaker, said he was “proud” to choose Ford’s home state for the new battery hub.
“We are committed to leading the electric vehicle revolution in America, and that means investing in the technology and jobs that will keep us on the cutting edge of this global transformation in our industry,” Ford said in a news release.
Gov. Gretchen Whitmer said winning Ford's investment is another example of the state securing future EV automotive jobs, like it has done recently with Gotion Inc. near Big Rapids, Our Next Energy Inc. in metro Detroit and General Motors Co. in Michigan.
“Today’s generational investment by an American icon will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification,” Whitmer said in the release.
Once running, the plant in Marshall will add approximately 35 gigawatt hours per year of new battery capacity for Ford in the U.S., which would power 400,000 future EVs.
LFP technology would give consumers a more affordable option than the traditional NCM chemistry. LFP is cheaper to make and easier to source then NCM, and it is more durable and charges faster. However, NCM battery chemistry allows for more power and range and performs better in low temperatures.
“The intent is to make these more affordable and more accessible to customers,” Marin Gjaja, chief customer officer for Ford Model e, said on the media call.