Ford Chooses Michigan for Battery Plant Amid Anti-China Political Storm

Ford chooses Michigan to site its new battery plant utilizing CATL technology from China, a huge win for the UAW and Ford’s home state.

There is an old saying that it doesn’t matter if you are someone’s first choice as long as you are their last choice. That’s the case with the city of Marshall in west-central Michigan, which gained 2,500 jobs plus a $3.5 billion investment when Ford chose it to supply batteries for up to 400,000 battery-electric vehicles a year.

Ford’s tech partnership with Chinese battery company CATL has collided with the center of the U.S.’s divided politics for months. Since 2016, the U.S.’s economic and trade relationship with China has been hotly debated in every election. The result has been a war of tariffs between the two countries and much overheated rhetoric, especially in the past few weeks as Chinese “spy” balloons have been shot down by the U.S. military over the Southeast U.S., Alaska and Lake Huron.

Ford chose Michigan to site the new battery plant after Virginia’s Republican Gov. Glenn Youngkin took his state out of contention for the factory, publicly stating his belief that Ford's partnership with CATL would serve as a “Trojan Horse” for China, furthering Asian countries’ dominance of the EV battery market. It’s unknown how attractive Virginia would have been.

To combat resistance to the partnership with a Chinese company, Ford is setting up the factory as wholly owned by Ford and not a joint venture. And executives are stressing that Ford will be licensing CATL’s technology, thus hoping to limit the political impact of the deal. CATL does not have any factories in the U.S, though it does in Europe and Asia.

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“This will help us build more EVs faster,” William Clay Ford Jr., the company’s executive chairman, said Monday. “CATL will help us get up to speed, so we can build the batteries ourselves.”

Ford CEO Jim Farley says the automaker considered locations outside the U.S. for the factory, namely Mexico and Canada, but tax credits provided via the Inflation Reduction Act signed into law by President Biden last August made Michigan an attractive option.

Ford says the UAW will be free to organize the plant  via card-check.

"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," Bill Ford said. "I am also proud that we chose our home state of Michigan for this critical battery production hub."

Ford executives have taken great care to explain the deal, and how limited CATL’s participation is, in order to elude the political brickbats that have been aimed at China and China’s dominance of the rare-earth metals required by EV batteries. CATL is the largest supplier of EV batteries in the world.

Ford says it's on pace to produce 600,000 EVs annually this year and 2 million by 2026. The federal government has set a goal of having 40% of all new-vehicle sales be EVs by 2030. At the end of 2022, Ford was the No.2 seller of BEVs in the U.S. behind Tesla.

Ford is building two battery plants in Kentucky and a third in Tennessee with South Korean company SK On. General Motors recently started production at a battery plant in Ohio that it jointly owns with South Korean company LG Energy Solution, and those companies are building two more plants in Tennessee and Michigan.

Ford’s move to locate the plant in Michigan is a big win for the state and the UAW. Over the past two years, automakers have chosen Southern states for more than a half-dozen auto plants with foreign-owned automakers such as Nissan and Toyota still able to operate union-free in the U.S.