Ford-CATL EV battery plant being 'aggressively' pursued by Michigan

Michigan is competing "aggressively" for an electric vehicle battery factory planned by Ford Motor Co. and a Chinese battery giant that would bring $3.5 billion of investment and create 2,500 jobs.

While Ford won't confirm where the plant will be built — it's in the company's best interest to be coy — a "megasite" in Marshall, Mich., many years in the making, is readying for its moment. Marshall is located just north of the Indiana border.

The lingering question is, whom is it competing against?

It would appear Michigan is poised to land the lithium iron phosphate battery project between the automaker and Contemporary Amperex Technology Co. Ltd. after the governor of Virginia, a would-be competitor for the investment, ostensibly snubbed it because of its ties to Beijing.

Ford, however, is keeping its cards close to the vest. The automaker has not confirmed the scope of the project or what sites it is considering.

"…We haven't described or confirmed specific sites — plural — that are or aren't being considered. Or even the states in which they're located," Ford spokesman T.R. Reid said in an email to Crain's Detroit Business, an affiliate of Automotive News.

Michigan is competing "aggressively" for the project, said Quentin Messer, CEO of the Michigan Economic Development Corp.

"Michigan is always talking to Ford and any of our large employers," Messer told Crain's. "We talk in general about making sure that Michigan remains a competitive environment for opportunity."

Messer said he is uncertain about timing for an announcement on the plant and he is unsure what other sites are being considered.

"There's a lot of competition for this opportunity, both across the U.S. and also our friends in Canada and also in Mexico," he said. "So we are aggressively competing and out-hustling and out-competing, and we'll see what happens."

It benefits Ford to keep its decision-making a mystery, but not taxpayers, said James Hohman, director of fiscal policy at the Mackinac Center for Public Policy.

Even if the automaker has internally already settled on a site, it will wait to get the best deal before committing. Moreover, Hohman said, conducting deals in private lessens the chance of public blowback.

"I think a lot of these major companies that have a factory to sell are afraid of that kind of blowback, so they're hosting their competitions in secret, and that's an inappropriate way to do business," he said.

In turn, the perceived threat of losing the project compels the MEDC to go to the table with the biggest incentives package it can offer to secure the investment.

"We will use every available tool that we have in our toolbox, and I think it would be imprudent to talk specifics," Messer said.

Similarly, it serves the MEDC to not divulge how many hundreds of millions of dollars in tax incentives it might be offering, should a competing state decide to one-up. It's a high-stakes game of blind poker, of sorts.

"We don't want to tip our hand to the competition," Messer said.

As Michigan vies for the battery plant, a "megasite" in Marshall is readying for its moment.

The 1,900-acre site is the state's marquee property for a "transformational" project. It is one of three being actively prepared for development – along with a site in Mundy Township outside of Flint and Eagle Township near Lansing — and it is the furthest along in the process.

In the past two months, site preparation has picked up rapidly at the swath of farmland near I-69 and I-94.

Two companies are interested in the site, said Jim Durian, CEO of the Marshall Area Economic Development Alliance, which controls the megasite. He declined to name them, but officials have said they are targeting automobile, battery and semiconductor manufacturing.

Durian said he thinks the megasite is "closer now than it has ever been" to landing a project.

"We just have to wait it out," he said. "It could be a matter of weeks. It could be longer. I don't know. It's just hard to tell with these projects."

The Marshall development alliance triggered a purchase option last month for 667 acres from Indiana-based Ceres Farms LLC and a pair of residential property owners, according to a City Council document.

Officials from the city of Marshall and Marshall Township signed off on transferring the land to the control of the economic development agency, marking another step toward development, Durian said. Triggering the purchase option was the result of feedback received from companies visiting the site.

If Ford does choose Michigan, it could theoretically put the plant somewhere other than a megasite, similar to Gotion Inc.'s $2.4 billion plant in the Big Rapids area, which caught many in the economic development community off guard.

As with the Gotion plant, Ford's plant with CATL — the largest EV battery maker in the world — has stirred political tension.

Virginia Gov. Glenn Youngkin said earlier this month that he removed his state from consideration for the factory because it would serve as a "Trojan horse" for China into the U.S., helping the Far East bolster its EV battery dominance and spread its influence.

Critics have accused the Republican of putting his political ambitions ahead of new jobs. Others have said Virginia was never a realistic option for Ford given its assembly plants are not near Virginia.

Asked her reaction to Youngkin's decision to halt talks, Michigan Gov. Gretchen Whitmer, a Democrat, said: "I could say a whole lot of things about what I suspect is going on with my colleague from Virginia. But I will refrain. All I can say is that Ford is a great American, iconic company — a great Michigan, iconic company. There are states across the country that are competing for investment from Ford, as are we. You can never assume that they're going to grow here. We've got to compete. That's why the work we've done has been so important."

Whitmer will soon sign legislation to add $150 million into an incentives fund the state set up more than a year ago in the wake of Ford's 2021 decision to put EV and battery plants in Tennessee and Kentucky.

It remains unclear what business relationship Ford and CATL would have in the new battery plant, whether it would be a joint venture, technology licensing agreement or some other type of structure.

Ford announced in July that it entered a non-binding memorandum of understanding outlining a "global strategic cooperation" with CATL to jointly explore new business opportunities worldwide to cover battery supply in North America, Europe and China, according to a news release.

"The elevated global strategic cooperation aims to open up new opportunities for both companies to create a sustainable business and promote EVs, contributing to global carbon neutrality goals," it said.

— Crain's Detroit Business reporter David Eggert contributed to this report.