Ford has begun building a new $3.5 billion battery manufacturing plant in Marshall, Michigan that will produce lithium iron phosphate (LFP) batteries for its electric vehicles. The move will make the automaker the only OEM that manufactures both LFP and nickel cobalt manganese (NCM) batteries for its EVs domestically in the United States. 

The new factory, dubbed Blue Oval Battery Park Michigan, will employ 2,500 workers when it opens in 2026 and will be capable of adding approximately 35 gigawatt-hours of LFP battery capacity to Ford's portfolio. That's enough to power approximately 400,000 electric vehicles. Experts have predicted sourcing enough battery capacity to satisfy electric vehicle demand will be a challenge in the coming years, so more and more automakers are positioning themselves to have control over their supply.

Ford LFP and NCM Battery Comparison

Ford LFP and NMC Battery Comparison

Why is LFP important?

Most electric vehicles today employ nickel cobalt manganese battery cells because they provide extremely high energy density. However, there are serious problems with the nickel and cobalt supply chain, including shortages as well as human rights and environmental issues. Therefore, more and more EV manufacturers are looking at other solutions for battery supply and LFP batteries are currently the most desirable option. 

But those aren't the only reason why LFP cells have become the "battery de jour". LFP batteries also cost less to produce, tend to have a longer lifespan, and can be fully charged and discharged without causing accelerated degradation that happens when NCM cells are treated that way. 

“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, Ford executive chair. “I am also proud that wechose our home state of Michigan for this critical battery production hub.

But there are drawbacks to LFP cells. They don't have the same energy density as NCM cells, therefore more volume of battery is needed to achieve the same energy output. More battery volume typically means more weight which in itself necessitates more battery to propel the vehicle the same distance.

Another issue with LFP batteries is they typically don't perform as well in cold climates as NCM batteries do. However, progress has been made in improving cold weather performance in Tesla vehicles, so with further development, Ford may be able to overcome that challenge also.

Ford NCM pouch cells
Ford LFP Battery cells

Ford's NCM pouch cells compared to their new LFP prismatic cells

Ford will be using prismatic cell ford for its LFP batteries, as opposed to the pouch-style cells it employs for its NCM cells. A Ford representative explained to InsideEVs that the change in form is to help overcome the lower energy density issue of LFP cells. The larger, Prismatic cells mean there's more battery and less packaging in the same space, which will allow Ford to squeeze more kWh within the same battery footprint. 

Since LFP batteries can regularly be charged to 100%, Ford won't have to recommend its customers charge to 85% on a daily basis, as they currently do. Therefore, the LFP-equipped vehicles could theoretically have a greater daily driving range if Ford manages to squeeze the same amount of kWh in the pack as they do for the NCM variants.  

Agreement with CATL 

An integral part of Ford's new LFP battery plans is a new agreement that's in place with Contemporary Amperex Technology Company (CATL), the world's leading battery supplier. CATL will initially provide Ford with LFP cells which will begin to power all standard-range Mustang Mach-Es later this year. The extended-range Mach-Es will continue to use NCM battery packs. 

By next year, the standard-range F-150 Lightning will also come with LFP packs while the extended-range vehicles will continue to use NCM. CATL will continue to supply the Chinese-made LPF cells to Ford until such time that the new facility has the capacity to produce them. CATL has agreed to license its LFP battery technology to Ford and will have employees at the new Ford plant to assist with and oversee production.

Currently, Ford is the number two US automaker with regard to electric vehicle production and the company estimates it will be selling two million EVs annually by 2026. By comparison, Tesla hopes to sell two million vehicles this year, so even with an aggressive increase in EV production, Ford accepts that it won't be possible to surpass Tesla for quite some time. Unlike General Motors which claims it will be the leading EV manufacturer by 2025.  

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