Ford takes step towards making its own electric vehicle batteries

Ford on Tuesday said it will beef up investment in batteries for electric vehicles after the pandemic, semiconductor shortages and a high-profile trade dispute highlighted the fragility of global supply chains.

The Dearborn, Michigan carmaker said it was centralising its research and development for electric vehicle batteries in south-east Michigan and planned to open a $185m “learning lab” there late next year that will develop, test and build battery cells and cell arrays.

Hau Thai-Tang, the company’s chief product platform and operations officer, said the goal of the newly dubbed Ford Ion Park is “to help Ford more quickly develop and eventually, manufacture, battery cells and batteries themselves”.

“We want to give Ford the flexibility and optionality to eventually vertically integrate,” he added, but declined to give a timeline.

The carmaker said it has taken its cue from the administration of President Joe Biden, which has recognised “the importance of having localised manufacturing and control of the supply chain” after a year in which automotive manufacturing has been upended first by Covid-19 and then by a global chip shortage, Thai-Tang said.

Ford also narrowly skirted significant consequences from a trade dispute between South Korean battery manufacturers LG Chem and SK Innovation.

The carmaker had planned to buy electric vehicle batteries from SKI, which had built a $2.6bn plant in Georgia, but in February the US International Trade Commission banned SKI from importing goods into the US for 10 years, finding that the company had stolen trade secrets from rival LG Chem and destroyed evidence to conceal the theft.

The ban was averted this month when SKI and LG Chem settled for $1.8bn plus royalties.

The 150 experts who have started work at Ford Ion Park will be led by Anand Sankaran, a 30-year veteran of the company who is director of electrified systems engineering.

“The goal is to come up with designs that we know we can scale up in production,” Sankaran said.

The United Auto Workers union said Ford’s plan would put the company and its workforce in a position to prosper, saying “if we get these investments wrong, the workers will be the ones who suffer. But if we get these investments right, we can build a strong jobs climate . . . for decades.”