Michigan Scores The $3.5 Billion Ford Battery Factory Virginia Didn’t Want
Virginia Governor Glenn Youngkin is dancing with joy today. The 3,500 jobs that would have come to Virginia as the result of Ford building a battery factory in Old Dominion will now go to Michigan, and Youngkin couldn’t be happier. Late last month, he told Ford to take its battery factory and shove it because CATL, the largest battery manufacturer in the world, would operate the factory. The governorator wants no godless communists polluting his state. He has gotten his wish.
Following his State of the State annual address to the Virginia General Assembly in January, Youngkin told reporters, “We felt that the right thing to do was to not recruit Ford as a front for China to America.” He made the comment in response to questions about a section of his speech that dealt with the dangers of the Chinese Communist Party, or CCP, which he called “a dictatorial political party that only has one goal — global dominance at the expense of the United States.” Youngkin told legislators he is leading Virginia “out of darkness,” according to the Washington Post. “Virginians also should be wary of Chinese communist intrusion into Virginia’s economy,” he added.
Subsequently, Richard Cullen, Youngkin’s chief legal counsel, pontificated in an interview with the Washington Post that the proposed battery plant involved “national security risk-type technology and he stopped that. They were looking for land and incentives to build something and I think that was the nucleus” of the evolving concern about farmland, he said. Last month, conservative news outlet Daily Caller reported that Youngkin was removing Virginia from consideration over concerns that the Chinese company would have control over the primary battery technology.
Virginia’s Loss Is Michigan’s Gain
Reuters is reporting that Ford may announce as soon as Monday that it plans to build a $3.5 billion lithium-iron-phosphate battery plant in Michigan. Ford has alerted the automotive press corps — including CleanTechnica — that it will make a major announcement about its future on February 13 at 11:00 am. Could this be the topic?
As with the Virginia plan, Ford will own the factory and the land while CATL will operate the factory itself. The factory is expected to be located in the Marshall, Michigan area, and employ at least 2,500 workers when full production is achieved. The state has identified a 1,900 acre “megasite” for commercial development in Marshall, which is about 100 miles west of Detroit.
The arrangement between Ford and CATL is expected to satisfy the requirements of the Inflation Reduction Act regarding the sourcing of battery materials and components from within the US or from favored trading partners — basically anywhere except China. It would be silly to build a new battery factory if its products were excluded from the generous incentives included in the IRA. Ford announced last July that it was seeking to use LFP batteries in some of its electric vehicles in the future, particularly the Mustang Mach-E.
So far, everyone involved — Ford, CATL, and the states of Michigan and Virginia — have all declined to comment on the Reuters report. In January, Michigan Governor Gretchen Whitmer told the Detroit News that Youngkin’s decision was a “political determination.” Last October, she announced that Gotion High Tech, another Chinese battery manufacturer, would construct a new $2.36 billion plant in Big Rapids, Michigan. The facility is expected to employ 2,500 workers and produce up to 150,000 tons of cathode material and 50,000 tons of anode material annually.
In July, Ford said it plans to localize 40 GWh of battery capacity in North America starting in 2026. It also announced an agreement with CATL to explore supplying battery packs for Mustang Mach-E models for North America starting in 2023 and said they would discuss cooperation with CATL for batteries in Ford vehicles worldwide.
CATL Teams With Ford
CATL has been trying to find a way to become involved in battery manufacturing in America for some time. Last fall, we reported that the company was exploring the possibility of building a US battery factory in either South Carolina or Kentucky but was also considering sites in Canada and Mexico.
Even taking IRA subsidies into account, it would reportedly cost CATL more to produce batteries in the US than in China. However, automakers need batteries built here for their EVs in order for consumers to qualify for the full $7500 tax credit.
The “Chinese Menace”
Not all the concerns about China and its aggressive policies toward other nations is just xenophobia, although it is reminiscent of the Yellow Peril fears that began in the late 18th century. China hasn’t helped itself by sending spy balloons over the US and other nations, actions that serve to exacerbate the fears of many Americans.
Similar fears bedeviled Japanese manufacturers at one time and then later manufacturers in South Korea. Today, no one has a second thought about buying a Japanese or Korean car, appliance, or electronic device, but that was not always the case. Now China is poised to use the electric car revolution to create an opening in foreign markets. Europe has been quite receptive to Chinese-made cars, but the US has been much less welcoming.
The US also needs to take a hard look at itself when it accuses other nations of pursuing hegemony over other sovereign nations. It has 750 military bases in 80 countries. China has 5. The US also has a record of promoting regime change in many parts of the world — from the Middle East, to the Congo, to most of Central and South America. One should always take a hard look at oneself before accusing someone else of skulduggery.
Right now, it appears that China is not welcome to do business in the US. One can only speculate how that attitude may evolve over the coming years.
CleanTechnica has reached out to Governor Glenn Youngkin and Ford with questions on some of the maters above. We will update this article if we receive responses.