Ford announced the creation of Ford Energy, a subsidiary focused on battery energy storage, converting its Kentucky electric vehicle (EV) battery plant to use licensed technology from China’s Contemporary Amperex Technology Co., Limited (CATL), building on a partnership at its Michigan facility.
According to the Financial Times, Ford is enhancing lithium iron phosphate battery production in the United States to bolster energy security and support American workers. The conversion of the Kentucky plant into an energy storage facility using CATL technology follows a 2023 agreement for a similar project in Michigan. This expansion has led to congressional scrutiny over potential risks related to supply chain independence due to reliance on Chinese suppliers.
Michigan Advance reports that Kentucky has provided Ford with a $250 million loan and land for battery plants, aiming to enhance local manufacturing capabilities. However, the decision to repurpose the Kentucky facility for energy storage has resulted in layoffs affecting approximately 1,500 workers who must reapply for their positions. This development has raised concerns among state officials and workers regarding the economic impact of such shifts in projects involving foreign partners.
Norton Rose Fulbright highlights that the United States currently imports 100% of its graphite needs, with 37% sourced from China, and relies heavily on China for nearly three-quarters of its lithium-ion batteries. CATL and BYD are identified as Foreign Entities of Concern by the US Treasury, which limits tax credit eligibility due to national security risks associated with dependence on Chinese critical minerals for EV batteries. This situation underscores broader vulnerabilities in global supply chains where China dominates the processing of key minerals like lithium and cobalt.
Ford Motor Company, established in 1903 by Henry Ford, is headquartered in Dearborn, Michigan. It develops and delivers a range of vehicles including trucks, sport utility vehicles, commercial vans, cars, Lincoln luxury vehicles, and connected services. Additionally, Ford provides financial services through Ford Motor Credit Company and maintains joint ventures in China alongside partnerships for electric vehicle battery production.
