American automaker Ford and Chinese battery giant CATL are reportedly contemplating erecting a battery manufacturing facility in Michigan or Virginia to capitalize from new federal tax benefits without offending political considerations between the US and China, as per Reuters.
How would the arrangement work?
CATL will utilize the contemplated multibillion-dollar battery factory to produce lithium iron phosphate batteries for Ford’s electric vehicles. The Chinese company would also be responsible for the technologies required to produce the battery cells.
Meanwhile, Ford will fully own the plant and the infrastructures for the project to qualify for the production tax credits mandated by the newly passed Inflation Reduction Act.
Specifically, they would be eligible for the following:
· Electric vehicle tax credit of $7,500
· Tax credit of up to $35/kWh for local battery cell production
It is worth mentioning that CATL was reported to stall battery plants investments plans in October due to its disadvantage under the new US standard. However, there are still no official statements from both company about this matter.
That said, we can only wait to see if the companies will verify these speculations and announce their official plans eventually.
