After much speculation, Ford announced its plans to build a US$3.5Bn lithium iron phosphate (LFP) battery plant in Marshall, Michigan. The move will elevate Ford as the only US automaker to build domestic production of both nickel cobalt manganese (NCM) and LFP batteries.

Ford’s newly announced LFP battery plant will operate as a wholly owned subsidiary and will form an important part of the company’s US$50Bn plus plans for electric vehicle (EV) growth through to 2026. The BlueOval Battery Park Michigan plant will employ more than 2,500 people and is set to begin LFP battery production in 2026. Battery cells will be manufactured using LFP knowledge and services provided by Contemporary Amperex Technology Co., Limited (CATL).

This announcement is not new news regarding Ford’s commitment to adding LFP battery technology to its future EV fleet. It has already committed to using CATL-manufactured LFP technology in its Mustang Mach-E, to be launched later in 2023, and the F-150 Lightning, which will be launched in 2024. In many ways, US EV-makers committing some of their range to LFP batteries is not new news at all, with Tesla already having a CATL-relationship in place supplying LFP batteries to service a significant chunk of its global production.

What is new news is that a large US EV-manufacturer has committed investment to build out domestic production of LFP batteries under its own "name plate". BYD/Toyota and CATL/Hyundi continue to build out joint ventures, but non-China LFP battery production has tended to be an expansion of Chinese company owned production up until now. A US company building a domestic LFP battery factory with 2,500 employees feels like new ground being broken, even if the knowledge and services are being “borrowed” from China.

Project Blue’s view is that this is a clear sign-post for LFP battery technology growth and the requirement for all global EV manufacturers to find a way to scale their access to a durable battery technology requiring fewer critical materials. The additional 35 GWh of LFP battery capacity is not going to fully achieve that, nor is it going to provide a secure, domestic supply to US EV manufacturers. However, as patent-based IP for LFP continues to fall-away – the technology is not new by any measure – gaining hands-on experience in the manufacture of and supply chain integration for LFP is an important step forward for non-China EV automakers.