As Ford Authority previously reported, Blue Oval supplier LG Energy Solutions will be moving production of some batteries – including NCM units used in Ford Mustang Mach-E extended range models – from Poland to Holland, Michigan this year. That move was made in an effort to make vehicles like the Mach-E qualify for federal tax credits and adhere to more restrictive rules on countries of origin, though the tax credit is now going away at the end of September. Regardless, Ford EV rival Tesla has now inked a deal of its own to procure a share of LG’s American-made batteries.
According to Reuters, Tesla has signed a $4.3 billion dollar deal with LG that will result in the automaker receiving lithium-iron phosphate (LFP) batteries built in Michigan that will be used in energy storage systems. According to the same report, Tesla is making this particular move as a way to circumvent tariffs on imported batteries, which have had a substantial impact on its costs already. “We will also be working on securing additional supply chain from non-China-based suppliers, but it will take time,” said Tesla Chief Financial Officer Vaibhav Taneja.
LG is one of very few companies building LFP batteries in the U.S. at the moment, as that technology has long been dominated by Chinese entities. In fact, Ford will begin building its own LFP batteries at the under-construction BlueOval Battery Park Michigan site, but it will do so using technology licensed from China-based battery maker CATL. As for why that was necessary, it all boils down to legal issues, according to the automaker.
“We don’t misappropriate [intellectual property] at Ford,” said Lisa Drake, Ford’s vice president of Technology Platform Programs and EV Systems. “You just can’t use it without that. You’ll be in violation of a piece of paper that has passed across the globe. It’s just a means to get that back.” Drake noted that the entire project “got caught up in the political storm,” adding that licensing the LFP battery tech is “the right thing to do” for both jobs and Ford’s future EV projects.”
Not much of a looker, but it runs and drives.
The previous owner sunk $310k into the build.
Bronco and Bronco Sport moved more than 39K units.
With an estimated 400 miles of range and a $60k price tag.
A key cost savings measure for the automaker.
View Comments
American made means made in the Americas, which includes every nation from Canada to Chile. Many of those nations have lower labor costs than in the U.S. So if LG Chemicals makes then in Mexico, they will cost much less than in Michigan, yet still be American made.