Ford goes again on Catl JV with capacity slashed

Politically controversial project is latest Ford battery initiative to be reduced in scope

Ford goes again on Catl JV with capacity slashed
The new facility will be located in Marshall, MI

Legacy US OEM Ford will restart a battery production joint venture (JV) with Chinese firm Catl that has attracted significant US political scrutiny. But planned cell production capacity has been reduced by more than 40pc.

“While we remain bullish on our long-term strategy for electric vehicles, we are re-timing and resizing some investments,” Ford says, reflecting on a third quarter in which already sizable EV losses grew by another 15pc and after the firm delayed $12bn in EV investment.

The relaunch of the Battery Park Michigan project in Marshall, MI will see production capacity reduced from the initially planned 35GWh to just 20GWh. Ford describes the scale-back as “rightsizing”, echoing CEO Chris Farley’s positive spin on the company’s pushing out of EV targets and investment as “adjusting future capacity to better match market demand” on his firm’s recent third quarter results call.

“We are rightsizing as we balance investment, growth, and profitability. The facility will now create more than 1,700 good-paying American jobs to produce a planned capacity of approximately 20GWh,” Ford says.

In 2021, Ford calculated that its global EV plan called for 240GWh of battery cell capacity by 2030, which the firm estimated at “roughly 10 plants’ worth”.

The 15GWh reduction now announced at the Catl JV comes on the back of the cancellation of the company’s recent battery joint venture in Turkey, which wipes out another up to 45GWh. The second of two planned gigafactories in partnership with South Korea’s SK On in Kentucky has also delayed by an as yet undefined period, meaning Ford looks to be well off these battery production goals.

Clearly, though, if Ford’s estimates of how many EVs it will be producing by the end of the decade has been revised, its battery capacity needs will also move. And there are potentially more moving parts than just revised production expectations.

Ford CFO John Lawler mentioned on the Q3 call that the company is considering battery re-designs to find an efficiency sweet spot while meeting performance targets. “It is a combination of the battery size and the efficiency of the vehicle to get the lowest watts possible to hit the ranges that we are looking to hit,” Lawler said.

Ford still maintains that it has already sourced 70pc of battery capacity to support 2mn+ annual EV global run rate by 2026 and “plans to localise 40GWh/yr of lithium iron phosphate (LFP) capacity in North America in 2026”.


The JV with Catl has attracted political criticism in the US since it was signed, with some commentators branding it a ‘back door’ for a Chinese company to enter a reshored US EV supply change. A similar JV Ford rival GM has proposed with China's Gotion has faced much of the same flak

Despite working with Catl and using its proprietary technology, by dint of its location in the US, batteries made at the plant will likely qualify for tax credits under the Inflation Reduction Act (IRA), a piece of legislation designed to incentivise manufacturers from the US or its trade partners to populate the battery supply chain.

The prospect of Chinese firms in the US value chain has been objected to chiefly on grounds of national security concerns, as well as what President Biden has called “unfair trade practices” tied to Chinese state support for Chinese companies, amongst other concerns.

“Reports that Ford is deepening its partnership with Catl, despite its ties to Uyghur forced labour, are extremely disappointing. The American people deserve better from an iconic US company that receives massive taxpayer subsidies. Ford needs to call off this unethical deal for good,” says Republican congressman Mike Gallagher, who chairs the bipartisan House select committee on the CCP.

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