A Status Report on the Inflation Reduction Act (IRA) and the Future Prospects for a New EV Battery Plant in Michigan
Ford had considered sites outside the US for this battery plant but settled on the Michigan location in part due to the tax credit rules, Lisa Drake, Ford’s vice president of EV industrialization, said in a press conference.
In August, the Inflation Reduction Act was passed into law to restructure how EV tax credits are allowed. Under the new law, consumers buying an electric vehicle will be eligible for tax credits of varying amounts, depending on whether the vehicle itself, as well its batteries and battery components, were manufactured and the battery minerals extracted in the US.
She said the IRA did what it was supposed to do, and that it was important for them. The United States got 2,500 fantastictechnical jobs and all the indirect jobs that go with it plus the future growth.
There will be a plant that makes batteries called LFP (lithium ferro-phosphate). This is a type of battery that uses no nickel or cobalt, elements that can be difficult and expensive to extract from the earth.
Ford is the first carmaker to make a commitment to developing two different battery chemistries for its EVs at the same time. Vehicles with LFP batteries are being produced byTesla.
Most of today’s EV use batteries with NCM chemistries. NCM has a lot of baggage due to the fact that it was once mined in a way that was harmful to children and the environment, making it known as the “blood diamond of batteries.”
“They are exceptionally durable and they tolerate more frequent and faster DC fast charging,” Lisa Drake, vice president of EV industrialization at Ford model e, the company’s EV division, said during a briefing with reporters Monday. “And they actually perform best when they’re being charged from zero to 100 percent regularly. That is ideal for customers who would like to get all the way to empty and then get back to 100 percent in no time.
The vehicles with LFP batteries will also be more affordable than Ford’s current lineup — though how much more affordable, the company wasn’t prepared to say
Reducing costs is certainly top of mind for the automaker, which had a particularly rough earnings this past quarter. Ford left $2 billion in profits on the table because of poor executing and deep issues in the industrial system, according to Ford CEO Jim Farley.
Rumors of the new factory have been swirling for months. Ford originally pitched building it in one of the poorest parts of Virginia, part of a swath of new battery plants across the South. The project would have created between 2,500 and 4,000 new jobs. The project was rejected by the Republican governor because of the involvement of China’s communist government.
We are suspending production at the Rouge Electric Vehicle Center through at least the end of next week. During a standard Lightning pre-delivery quality inspection, one vehicle displayed a battery issue. We think we have identified the problem’s root cause. It will take a few weeks to apply what we learn from the investigation to the battery production process for the truck. We will hold previous-produced vehicles while we update our processes.
Battery issues have been cited in several recalls of electric vehicles over the past few years, ranging from software glitches to more serious fire risks. Chevy notably recalled its entire Bolt EV lineup after several fires were reported, resulting in a multi-month production halt.