In announcing its official battery plant plans for Marshall, Ford Motor Co. touted its status Monday as the first automaker to commit to building both nickel cobalt manganese and lithium iron phosphate batteries in the U.S. as the 120-year-old automaker transitions from gasoline-powered vehicles to electric.

This $3.5 billion project in Michigan for lithium iron phosphate (LFP) batteries — called BlueOval Battery Park Michigan — will be a wholly owned subsidiary as part of the company's $50 billion investment globally through 2026.

Initial production in Michigan on approximately 950 acres on the west side of the city is scheduled to begin in 2026 with 2,500 jobs to start, Ford said.

Ford confirmed it will collaborate with China-based Contemporary Amperex Technology Co. Ltd (CATL), the world's largest battery company. The Chinese company, which is not a government-owned enterprise, operates 13 plants in Europe and Asia and provides batteries to companies, including Tesla and Honda.

"It's really important to understand Ford controls the plant," Lisa Drake, vice president of industrialization for the Model e unit at Ford, told reporters Monday amid some recent criticisms in Congress and elsewhere of deals with Chinese companies. Tensions are high between the two countries.

Under the arrangement, Ford will manufacture the battery cells using LFP battery cell knowledge and services provided by CATL, Ford said in its news release. Ford engineers will integrate these LFP battery cells into vehicles, including the Mustang Mach-E and F-150 Lightning.

Previously, Ford announced collaboration with SK On (previously SK Innovation) and LG Energy Solution, both based in South Korea, Ford said in its release.

$210M state incentive for Ford

Also Monday, the Michigan Economic Development Corp., was scheduled to approve a “critical industry program grant request" and zone designation for Ford in the amount of $210 million, and a loan for the Marshall Area Economic Development Alliance in the amount of $36 million to "purchase, improve and convey Marshall site parcels in and around Calhoun County." In addition, Ford requested a 15-year reduction of certain property taxes.

The state grant application estimated the starting wage, which varies based on job title, will range from $20 an hour to $50 an hour at the plant.

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The Marshall site is comparable to the site size of Ford's joint venture battery plant developments in Tennessee and Kentucky. Plant design and construction plans are still evolving, Ford said.

U.S. wins against Mexico, Canada

As the No. 2 electric vehicle maker in the U.S., Ford is chasing Tesla and preparing for other competitors. Supply chain challenges have slowed Ford and all automakers in recent years, and all are working to bring more supply chain manufacturing to the U.S. Building batteries at home is meant to reduce costs of chemistry, freight and production.

Ford did consider building the plant outside the U.S. but the new bipartisan Inflation Reduction Act and its related incentives kept the project from going to Mexico or Canada, Drake told reporters. "A big win for the U.S."

She said the company expects to have personnel from the Chinese-owned company on-site in Marshall to help with setting up installation, and later on to help with operations. "We will operate the facility. It will be a Ford plant manager."

Why this battery in Michigan?

Ford highlighted these reasons for building this plant:

• Lithium iron phosphate batteries are less costly to make than are nickel cobalt manganese (NCM) batteries

• LFP batteries are exceptionally durable using fewer high-demand, high-cost materials

• LFP batteries tolerate more frequent and faster charging

• LFP batteries will be used in Mustang Mach-E this year and F-150 Lightning in 2024, before the new plant opens

The Michigan facility will add approximately 35 gigawatt hours per year of new battery capacity in the U.S. initially — capable of powering approximately 400,000 future Ford EVs, Ford said in its news release.

The company continues a stated goal of delivering an annual run rate of 600,000 electric vehicles globally by the end of this year and 2 million globally by the end of 2026 as part of its Ford+ plan, Ford said in its release.

“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,” said Bill Ford, executive chair, in a statement. “I am also proud that we chose our home state of Michigan for this critical battery production hub.”

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Ford predicted that the new plant would benefit consumers by reducing vehicle prices but said it's too soon to give details. Ford is not concerned about the threat of geopolitics affecting operations based on the contractual agreements between the two companies, Drake said.

'Generational investment'

Ford has yearslong orders for its vehicles from customers, and has struggled with supply chain issues.

“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," Gov. Gretchen Whitmer said in a news release Monday. "Let’s continue bringing the supply chain of electric vehicles, chips, and batteries home while creating thousands of good-paying jobs and revitalizing every region of our state. ... We’re on the move, so let’s keep our foot on the accelerator.”

At the event, Whitmer said, she wants to make Detroit the next Silicon Valley.

“This is a big deal,” she said. “It’ll make sure that production lines aren’t stalled by global shocks or shipping delays. We’re going to make electric vehicles top to bottom right here in the state of Michigan. I am grateful to Ford, an American icon, for believing in Michigan.”

The battery technology that will be used in Marshall helps reduce reliance on nickel and cobalt and other critical minerals, and "is in line with Ford’s work to create an EV supply chain that upholds its commitments to sustainability and human rights," Ford said in its release.

Preserving land in Marshall

Ford is ensuring that 245 acres at the southern edge of the battery site will be placed into a conservation easement, the company said. And the charitable Ford Fund will also be making contributions.

"This land, along the Kalamazoo River, will be preserved for generations to come and protected against future industrial development," Ford said in a news release. "Ford will work with government officials and community leaders to preserve natural resources and recreation near the facility, as part of its commitment to being a good neighbor."

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Marshall Mayor Jim Schwartz said in a news release that the city welcomed the partnership with Ford.

”This investment in the local community will lead to an influx of new jobs to Marshall and economic development throughout the area," he said. "We are especially excited to support Ford’s conservation easement, which will preserve Michigan’s natural beauty along the Kalamazoo River.”

Bill Ford said during the official announcement, "Marshall is a beautiful historic town and we don't want to change that. We're excited to partner with the community as we bring these new jobs to the future of the region. Being a good neighbor is something we take very seriously at Ford, and something that means a lot to me, personally."

'We have it all'

UAW President Ray Curry and U.S. Rep. Rashida Tlaib, D-Detroit, attended the announcement at Ford Ion Park in Romulus.

Curry said in a statement, “We supported the public investment into this facility as we know it will create good paying union jobs that will benefit the community and maintain strong wage and benefit standards in the auto industry.”

Ford CEO Jim Farley said, "We're so proud of this project. ... Now we have it all. Others don't, and won't."

Reaction to the project and partnership has an element of controversy due in part to the China connection.

“Having 2,700 jobs come to the Marshall community is good news and reflects a local emphasis on creating conditions ripe for investment. However, it is concerning to have a Chinese battery manufacturer, especially in light of recent provocations," U.S. Rep. Tim Walberg, R-Tipton, said in a statement to the Free Press.

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Free Press staff writers Clara Hendrickson and Todd Spangler contributed to this report.

Contact Phoebe Wall Howard: 313-618-1034 or phoward@freepress.com. Follow her on Twitter @phoebesaid

This article originally appeared on Detroit Free Press: Ford explains why it's building battery plant with China partner