Ford will own and run this EV battery facility. Credit: Ernest Ojeh / Unsplash.

Automobile manufacturer Ford Motor plans to construct a $3.5bn lithium iron phosphate battery facility in Michigan, US, reported Reuters.

Ford will own and run this electric vehicle (EV) battery facility, with Chinese battery company China-based Contemporary Amperex Technology Co Ltd (CATL) serving as a technology partner.

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Ford and CATL declined to comment on the plans, reported the news agency.

To be located in the Marshall area, the plant is expected to employ at least 2,500 workers once operational.

The 1,900-acre Marshall megasite, located approximately 100 miles west of Detroit, has been promoted by the US state as a site of economic opportunity.

Last August, Congress passed a $430bn Inflation Reduction Act (IRA) legislation to restructure electronic vehicles (EV) tax credits and ultimately stop credits in case EV battery components are produced or put together by an overseas entity of concern or if batteries featured critical minerals that were extracted, processed, or recycled by an overseas entity of concern.

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The legislation is designed to gradually stop the US dependence on China’s battery supply network.

Ford’s full ownership of the facility may help them avail of tax credits.

Last October, Michigan Governor Gretchen Whitmer announced that Chinese battery manufacturer Gotion High Tech plans to establish a new $2.36bn plant in Big Rapids.

This plant is expected to create 2,350 new jobs and manufacture up to 150,000 tonnes of cathode material and 50,000 tonnes of anode material yearly.

Last July, Ford announced it would localise 40GWh of battery capacity in North America beginning in 2026.