CATL and Ford: U.S. Battery Plant Goes Online — Why Ford Chose CATL Over SK On

*This content was translated by AI.

China's battery manufacturer CATL has officially begun operations at its battery plant established in partnership with Ford in the United States. Meng Xiangfeng, CATL's Vice Chairman, confirmed this fact directly at the annual meeting of the China Automotive Power Battery Industry Innovation Alliance. With the launch of this plant, CATL is shifting its overseas business strategy from a focus on product exports to a model that combines local investment and trade. CATL is also preparing to start operations at plants in Hungary and Indonesia by the end of the year. In its cooperation with Ford, the arrangement involves CATL providing technology and receiving royalties.

This project was first unveiled in February 2023 but encountered multiple setbacks due to political and economic issues. Under the initial plan, Ford was to invest $3.5 billion in Michigan to build a lithium iron phosphate (LFP) battery production facility with an annual capacity of 35GWh, supplying batteries for 400,000 electric vehicles. However, in July 2023, the project was temporarily halted after U.S. Republican Party lawmakers raised concerns that subsidies under the U.S. Inflation Reduction Act (IRA) could flow to CATL. Subsequently, in November 2023, the project resumed with a reduced investment scale of $2 billion and a downsized production capacity of 20GWh.

Following the change in the U.S. administration in 2025, the electric vehicle transition policy was canceled, and the EV tax credit was terminated early, leading Ford to record a loss of $19.5 billion related to its EV assets. Despite these challenges, the cooperation between CATL and Ford continued. Ford expanded its business scope by adding production of energy storage systems (ESS) at the plant. On June 17, Ford announced that it had completed the trial production of the first prismatic LFP battery cells at the facility. Currently, testing is underway for these batteries, which aim for a defect rate at the level of one in a billion, in accordance with CATL's stringent quality standards. The plant plans to ship its first automotive batteries by 2026, and the produced batteries will be installed in Ford's compact and midsize electric pickup trucks.

Vice Chairman Meng Xiangfeng stated that the cooperation process with Ford illustrates the complex realities faced by Chinese battery companies when entering overseas markets. He explained that with rising tariff barriers, increasing demands for local production, and tightening regulations on carbon emissions for batteries, simple exports alone have weakened competitiveness. Meng emphasized that battery companies expanding overseas must strictly comply with local laws and regulations and actively participate in the development of local standards and policies.

Additionally, CATL is reported to be pursuing LFP battery production in the United States by licensing its technology to General Motors (GM) in addition to Ford. Meanwhile, Ford had previously reorganized its U.S. battery joint venture established with SK On in May. For SK On, this restructuring aimed to maintain a North American production base while reducing the burden of debt and fixed costs.

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*This content was translated by AI.