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Ford to use Chinese technology to build electric car battery plant in U.S.

Views: 2     Author: Site Editor     Publish Time: 2023-03-25      Origin: Site


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Ford to use Chinese technology to build electric car battery plant in U.S.


On Monday, Ford Motor Co said it plans to invest $3.5 billion in Michigan to build an electric vehicle battery plant using technology it obtained from a Chinese company, one of the most important players in the auto industry.

The plant will be built in the rural town of Marshall, about 160 kilometers west of Detroit. The plant will be the latest in a string of companies announcing new battery and electric vehicle factories in recent months. Ford expects the plant to employ about 2,500 people and start production in 2026.

The automaker said it will own 100% of the plant and use CATL technology and services to produce batteries. CATL, the world's largest producer of electric vehicle batteries, has 13 of its own factories in Europe and Asia, but none in the United States.

As recently as 25 years ago, Chinese officials were eager to ask American automakers to bring their investment and expertise to China. Now, the roles have reversed, and one of America's most famous industrial giants has turned to China for technology in order to survive in a rapidly changing global automotive environment.

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"This will help us produce more electric vehicles faster," Ford executive chairman William Clay Ford Jr. said on Monday. He also said CATL would "help us speed up so that we can make our own batteries".

The cooperation comes at a time of considerable tension between Washington and Beijing, after the U.S. shot down a Chinese surveillance balloon off the coast of South Carolina on Feb. 4. US Secretary of State Antony Blinken has resolutely canceled his trip to Beijing after the spy balloon was spotted over Montana.

Two more unidentified objects were shot down late last week, one over northernmost Alaska and another over northern Canada. A fourth UFO was shot down over Lake Huron on Michigan's eastern shore on Sunday.

On Monday, China accused the United States of sending high-altitude balloons into its airspace without permission more than a dozen times since early last year.

The balloon dispute appears to have stalled China's quest to attract more foreign investment after ending nearly three years of a "clearance" policy and reopening its borders. Many politicians in the United States remain wary of China and investment from China.

Virginia Gov. Glenn Yonkin, a Republican, withdrew the state's bid for the Ford-CATL plant last month. On January 20, he described the planned project to Bloomberg Television as a "Trojan horse" for the CCP.

In order to avoid the impact of Sino-US tensions, Ford chose to fully own the factory and only licensed technology from CATL. CATL supplies batteries to Tesla, BMW and other major automakers.

Ford said the contract with CATL included provisions on how to resolve difficulties that arise between the two countries. "We've certainly thought about it," Lisa Drake, Ford's vice president for the electric vehicle industry, said on a conference call with reporters, without giving further details.

Ford, General Motors and other automakers are also building battery plants they co-own with Korean partners. Ford is building two battery plants in Kentucky and a third in Tennessee, both with SK On. Production recently began at a battery plant jointly owned by GM and LG Energy Solutions, and the two companies are building two others in Tennessee and Michigan.

Ford's new plant will produce batteries containing lithium, iron and phosphate, a combination known as LFP. The batteries are cheaper because they don't use expensive components like cobalt and nickel like some batteries. LFP batteries also have the advantage of being more durable. But batteries containing cobalt and nickel can store more energy and thus travel farther on a single charge.

"The whole point of this program is to bring down the cost of electric vehicles," said Ford CEO Jim Farley. "LFP is the most affordable battery technology."

Ford considered Canada and Mexico, but opted for the U.S. after President Joe Biden signed the Inflation Cut Act last year. The bill provides tax incentives for companies building battery factories in the United States. Buyers are also eligible for tax credits for EVs built in North America with batteries and raw materials from the region or from other U.S. trade allies.

"That's the motivation behind the passage of the Inflation Cutting Act," Farley said of the Marshall plant.

Ford's decision is also a big win for Michigan. Over the past two years, some automakers have located plants in southern states.

Ford said the battery plant is capable of meeting the battery needs of 400,000 electric vehicles a year. The company plans to use LFP batteries in its Ford Mach-E sport utility vehicle, F-150 Lightning pickup and other electric vehicles. CATL will supply Ford with LFP batteries before production begins at the Marshall plant.

All automakers are trying to produce more electric vehicles, and sales of electric vehicles in the United States jumped 66% last year. Ford is second only to Tesla in U.S. electric vehicle sales.

Vehicles with LFP batteries are better for commuting and local driving, and it can be quickly charged to 100 percent, Ford said. Cobalt and nickel-based batteries are better for long-distance driving or towing, but they usually take longer to charge.

CATL has become the world's largest maker of electric vehicle batteries and is a supplier to the likes of Tesla and BMW.

CATL has become the world's largest maker of electric vehicle batteries and is a supplier to the likes of Tesla and BMW. QILAI SHEN FOR THE NEW YORK TIMES

CATL employs 100,000 people around the world, most of them in China, and has been the world's largest supplier of electric vehicle batteries for the past six years. One-third of the electric vehicles currently on the world's roads use CATL batteries.

The company is little known outside the auto industry. Its founder and chief executive, Zeng Yuqun, set up the company in 2011 in his hometown, the northern outskirts of Ningde between Shanghai and Hong Kong, a formerly impoverished area of fishing villages and rice fields.

CATL has hired thousands of engineers at low cost in a country that places a high value on math and science education. The transformation of Ningde's battery industry echoes the prosperity of Detroit and the Midwest during the heyday of the US auto industry.

One-third of Ningde employees are in Ningde City, including many blue-collar workers. Rows of high-rise apartments have been built, with real estate prices as low as one-tenth of those in cities like Beijing or Shanghai.

For nearly three years into the pandemic, China has almost completely closed its borders, basically preventing all foreigners from entering the country, and there have been many restrictions on the exit of Chinese citizens. Still, CATL negotiated a global deal during this time and began producing lithium-ion batteries at a factory in Germany in December.

CATL also recently opened an office in Detroit to promote its batteries. On the wall of the museum in the lobby of its headquarters, a giant Ningde era global business map recently added the marker of the Detroit office -- only the marker was mistakenly placed in what appeared to be southwestern Wisconsin.

During a rare tour of a huge CATL factory in the city of Ningde on Sunday, reporters saw the manufacturing process of the LFP batteries that Ford will use.

The manufacturing process starts with metal foil, which is only one-tenth the thickness of a human hair. Aluminum foil is coated with an extremely thin layer of lithium, iron, and phosphate, while copper foil is coated with an extremely thin layer of graphite. Large reels of two foils and a third reel of very thin interlayer are wound together in alternating layers to make the battery core. Then, in a gray machine the size of a city bus, the cells are clamped tightly together.

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A bright orange, 3-meter-tall robot — like the ones used on welding lines in car assembly plants — picks up rows of battery cells and places them in a cold press to compress them. The cells then pass through a furnace, where they are heated to 105 degrees Celsius to evaporate all the moisture. The workshop for making batteries is more than 270 meters long and maintains humidity drier than the Sahara desert.

After baking, the battery is twice injected with a liquid electrolyte, which consists of a solvent and a lithium salt. The battery is then hermetically sealed and delivered to the customer.

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