The EV Battery of the Future is Already Here, and It’s Made in the USA

The high cost of lithium-ion batteries is one of the obstacles standing between electric vehicles (EVs) and the mass market. Supply chain issues can raise that barrier even higher. Fortunately, innovative new energy storage formulas that solve both problems are beginning to emerge — and Ford Motor Co. is among the automakers ready to jump on the opportunity.

Ford and the EV battery of tomorrow, today

The typical lithium-ion EV battery deploys a cathode made with nickel, cobalt and manganese (NCM). These materials provide a longer range and faster charging speeds. On the downside, conventional EV batteries can be susceptible to overheating and fire. The global supply of nickel and cobalt comes primarily from Russia and the Democratic Republic of the Congo, making it fraught with human rights abuses as well.

Researchers have been working on an alternative cathode based on a lithium-iron-phosphate formula — also known as an LFP, the acronym for the chemicals that are involved in its production. These batteries are more stable and less costly than the NCM formula, but they fall short on energy density. That means LFP batteries take up more space to deliver the same range. Finding the right balance between size and range has been one of the challenges holding LFP batteries back from competing with the NCM formula.

Nevertheless, those challenges seem to have been met. Tesla introduced the LFP formula to its U.S. lineup last year, and now Ford is following suit.

Ford announced on Monday that it will build a new $3.5 billion EV battery factory in Michigan dedicated exclusively to manufacturing LFP batteries. “This plant — called BlueOval Battery Park Michigan — initially will employ 2,500 people when production of LFP batteries begins in 2026,” Ford said in a statement.

The new EV battery won’t replace conventional batteries in all Ford electric vehicles — at least not yet. The automaker says it will continue to utilize the NCM formula as part of its strategy to sell 2 million electric vehicles worldwide by the end of 2026.

“As the company rapidly scales EV production, introducing LFP batteries allows Ford to produce more electric vehicles and offer more choices to new EV customers,” the company explained.

“Ford’s electric vehicle lineup has generated huge demand," Jim Farley, president and CEO of Ford, added in a statement. "To get as many Ford EVs to customers as possible, we’re the first automaker to commit to build both NCM [nickel-cobalt-manganese] and LFP batteries in the United States."

A big EV battery win for Democratic lawmakers

Ford credited the Inflation Reduction Act of 2022 with maximizing the savings for electric vehicle buyers in its press announcement for  the new EV battery plant. It was left unsaid that Congressional support for the bill came solely from members of the Democratic caucus. In fact, it received a thumbs-down from every Republican in both the House and Senate.

If the bill were to come up for a vote this year, it would die in the House — thanks to the slim majority Republicans picked up in the 2022 midterm elections. Fortunately, the Inflation Reduction Act came up for a vote last year when there were more Democrats than Republicans in both Houses of Congress. 

Ford also credited the Inflation Reduction Act with reducing EV battery costs. For the automaker's part, the new LFP battery is less expensive to manufacture, and the Michigan location will save on shipping and import costs. “Building in Michigan, Ford will benefit from the Inflation Reduction Act — creating one of the lowest-cost U.S.-produced batteries when the plant comes online in 2026,” Ford stated.“LFP batteries are very durable and tolerate more frequent and faster charging while using fewer high-demand, high-cost materials” 

Global connections persist in domestic manufacturing

Although Ford will manufacture the new EV battery in the U.S. through a wholly owned subsidiary, the new factory is still closely entwined with overseas energy storage innovators. Leading Chinese battery innovator CATL (Contemporary Amperex Technology Co., Ltd.) will provide the EV battery technology and services.

Ford’s collaboration with CATL comes after agreements with other overseas battery manufacturers, including the two Korean firms SK On and LG Energy Solution.

Let’s hear it for ESG

In addition to affirming its support for the Inflation Reduction Act, Ford also took a swipe at foes of the corporate ESG (environmental, social and governance) movement. The company noted that the LFP formula is “in line with Ford’s work to create an EV supply chain that upholds its commitments to sustainability and human rights.”

In that context, it is interesting to note that Virginia was also in the running for Ford’s new EV battery factory. However, the Republican governor of Virginia, Glenn Youngkin, took credit for halting the effort last December.

“Youngkin told reporters in a gaggle following his State of the Commonwealth address last week that his administration ‘felt that the right thing to do was to not recruit Ford as a front for China to America,’” Center Square, a state-level news organization, reported last month.

“Chinese influence in the U.S. has become an increasingly popular talking point among GOP political leaders, including Florida Gov. Ron DeSantis and Texas Gov. Greg Abbott, who are both considered potential candidates for the Republican presidential nomination,” news outlet Virginia Business observed, implying that Youngkin also has his sights set on the 2024 election cycle.

Youngkin’s objections ring hollow, however, considering his track record of doing business with China in the private sector. In 2021, the Associated Press reported that Youngkin had “amassed a personal fortune estimated at more than $300 million as a senior executive at the giant private equity firm known as the Carlyle Group.”

“As an executive at the private-equity firm the Carlyle Group, Glenn Youngkin oversaw investments that moved thousands of American jobs offshore,” added the Communications Workers of America (CWA), a labor union dedicated to media and communications workers. “With Youngkin at the helm, the Carlyle Group bought a controlling stake in a call-center outsourcing company based in China called VXI Global Solutions.”

According to CWA, that outsourcing company displaced U.S. jobs when it staffed a call center for AT&T in the Philippines⸺ which could explain why the opportunity to gain thousands of jobs from Ford failed to register with Youngkin. 

Meanwhile, Virginia taxpayers have spent 15 years and $200 million to ready a potential site for industrial development ⸺ but now, it sits vacant, reports the Richmond Times-Dispatch. Ford’s $3.5 billion EV battery plant would have created an estimated 2,500 jobs in an area that has been described as “one of the poorest” in the state. 

The Inflation Reduction Act, which aims to create new manufacturing jobs, is showing promising results considering how early on it is in its inception. However, with the 2024 presidential election cycle already heating up, states with high-profile Republican politicians like Gov. Youngkin are at risk of letting the opportunity pass them by.  

Images courtesy of Ford Motor Co.