Ford announced the launch of a new battery development center in Michigan, the first step toward taking on some of the burden of building its own battery cells for electric cars in-house.
The new “global battery center of excellence” will be called Ford Ion Park and will be based in Southeast Michigan. Ford said the purpose is to conduct research on how to go about making its own electric vehicle batteries. A team of 150 experts will work on ways to build EV batteries that are long lasting, quick to charge, and sustainable for the environment. They will also develop a process for making batteries quickly, cheaply, and at scale.
But Ford Ion Park, which will open late next year, will not house any actual battery manufacturing at scale. There will be “lab scale and pilot scale” battery assembly at the new center, said Anand Sankaran, the center’s new director, but the automaker will have to build a new factory to build EV batteries at scale. Ford would not provide a timeline as to when it anticipates launching its own battery cell production line, nor whether it would build a new factory to house battery manufacturing.
“It’s really for us to develop that expertise and competency in house and give us that flexibility in the future,” said Hau Thai-Tang, Ford’s chief platform and operations officer. “So stay tuned.”
Ford, which is still in the early stages of its transition to electric vehicles, has said it plans to spend $22 billion on the shift, including $7 billion on autonomous vehicles, through 2025. The majority of vehicles it plans on producing will be battery-electric vehicles, but the company also has hybrid and plug-in hybrid models with traditional internal combustion engines.
Ford just started delivering its first long-range EV, the Mustang Mach-E, despite some initial hiccups with software updates. It also introduced an all-electric Transit van last year and plans on unveiling an electric version of its bestselling F-150 pickup truck later this year.
It’s a more financially risky move with potentially lucrative rewards in the future if Ford can successfully supplement production from its own suppliers. Ford currently sources its batteries from South Korea’s SK Innovation, which recently lost a trade secret dispute with rival LG Chem that could hinder its imports to the US. (The companies recently reached an agreement that could avert a possible import ban.) By making its own batteries, Ford can avoid some of the conflicts that arise from sourcing batteries overseas.
Despite these plans, Ford will have to move more aggressively if it hopes to catch up to its competitors like Tesla, Volkswagen, and General Motors. GM is building two battery factories in the US with its partner LG Chem, while VW recently unveiled its own plan to have six “gigafactories” in Europe by 2030. Tesla, meanwhile, is in the early stages of making its own “tabless” battery cells in-house.
As recently as last July, then-CEO Jim Hackett said there was “no advantage” to Ford making its own battery cells. But Jim Farley, who replaced Hackett in October, took the opposite stance, describing the manufacturing of batteries in-house as a “natural” step as EV volumes grow.
According to Thai-Tang, the new center is a signal of how serious Ford is about building its business around the manufacturing and selling of electric vehicles. “We’re much more bullish and aggressive on how fast we think this transition is going to play out,” he said.