Ford’s plan to build new, ultra-efficient batteries in partnership with Chinese giant means EVs will be getting much, much cheaper: ‘This is a big deal’

In February, Ford announced that it will build a factory in Michigan to produce affordable lithium iron phosphate (LFP) batteries for its electric vehicles in partnership with Chinese battery maker CATL, per the MIT Technology Review.

Most lithium batteries use additional metals, like nickel and cobalt, to help them store energy. But most of these metals are rare and expensive. LFP batteries use ordinary iron instead — a much more affordable alternative. According to MIT, batteries of this type are about 20% cheaper on average.

Iron-heavy lithium batteries have been around for a long time, MIT says. But they have been previously overlooked as an option for EVs because batteries made with the metal could not store as much energy as other lithium batteries of the same size. Companies were focused on achieving a greater range for their vehicles, so they favored the smaller, lighter batteries.

However, as demand for EVs increases, the cost and scarcity behind procuring rare metals is becoming a bigger problem. Cobalt is especially problematic because mining it is dangerous, as the New Yorker reports.

EV manufacturers like Tesla have switched to using LFP batteries for some models, such as the Model 3, and MIT says that these batteries have already been popular in China for a few years. Ford has announced it will use LFP batteries in the 2023 Mach-E starting in the 2023 and 2024 F-150 Lightning models, but for now, it will need to import them, as there are currently no LFP manufacturers in the U.S. However, MIT reports that several are in the works in addition to Ford’s factory.

Ford’s new facility is due to open in 2026 and will use technology licensed from CATL, MIT says. It represents a $3.5 billion investment in the EV market and will be the first factory of its type in the U.S. “This is a big deal,” said Michigan governor Gretchen Whitmer at the press conference announcing the plan.

The deal with CATL has come under scrutiny in the U.S. House of Representatives, with the House Energy and Commerce Committee sending a letter to Ford in September requesting more information about the nature of the partnership.

“While Ford has labeled this project a ‘commitment to American manufacturing’ and asserts it will create 2,500 new American jobs,” the letter states, “we are concerned that Ford’s partnership with a Chinese company could aid China’s efforts to expand its control over United States electric vehicle supply chains and jeopardize national security by furthering dependence on China.”

Ford has maintained that CATL won’t have an active stake in the deal and won’t receive U.S. tax dollars.

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