Ford’s reportedly working on a $3.5 billion battery plant in Michigan

Ford’s gearing up to announce a $3.5 billion battery plant in Marshall, Michigan, according to a report from Automotive News. In an advisory obtained by the outlet, the automaker says it will reveal the news of the factory on Monday in partnership with China’s Contemporary Amperex Technology (CATL), a company that creates lithium iron phosphate batteries for electric vehicles (EVs), including the Mustang Mach-E.

While Ford still hasn’t confirmed these plans, Michigan reportedly offered $1 billion in incentives to attract the automaker. The factory’s expected to bring 2,500 jobs to the area.

The project is part of Ford’s efforts to comply with the strict rules set by the Biden administration’s Inflation Reduction Act (IRA), which lets EVs assembled in North America qualify for a $7,500 tax credit. Although the IRA also outlines battery sourcing requirements that discourage dealings with “foreign entities of concern,” like China, we still don’t know how the Treasury Department will interpret these rules until sometime next month.

Even still, Ford’s reportedly pushing ahead with the project. It could implement a “novel ownership structure” that would allow the automaker to work with the Chinese company and still qualify for the federal tax credit, according to a report from Bloomberg. This could involve Ford taking 100 percent ownership of the plant itself, while CATL controls operations at the facility and keeps the technology it uses to build the batteries.

Rumors about the new facility have been swirling for months, with a report from The Detroit News indicating that Ford initially wanted to bring the battery factory to Virginia. However, Governor Glenn Youngkin rejected its construction in the state over its ties to China, with his spokesperson noting at the time that it “would serve as a front for the Chinese Communist party, which could compromise our economic security and Virginians’ personal privacy.”

Ford later set its sights on Michigan, which recently began advertising a 1,900 “megasite” in the southwest portion of the state. If the rumors are true, the Michigan-based $3.5 plant would add to the $11.4 billion investment Ford made in partnership with South Korea’s SK Innovation to bring battery and EV factories in Tennessee and Kentucky. It could also help the company get closer to its goal of building over 2 million EVs per year by late 2026.