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Ford plans to develop and produce batteries for electric vehicles

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STRAIT (UKTN) – Saying that it wants to control key electric vehicle technology, Ford plans to open a battery development center near Detroit by the end of next year.

The company said the 200,000 square foot facility will have the equipment to design, test and even manufacture cells and battery packs on a small scale. The $ 185 million labs will also develop electronic controls and other items as Ford moves the process further in-house.

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Ultimately, the company wants to manufacture its own batteries on a large scale globally, a task now taken on by supply companies.

Like many global automakers who have been stung by a computer chip and other supply chain shortages, Ford wants to make sure it has enough batteries for what it says is an accelerated transition away. internal combustion engines.

Hau Thai-Tang, product manager and operations manager of the company, said electric vehicles are shifting from early adopters to early majority as new models come out, and Ford is keen to lead the transition.

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“We now see that the market is going to grow very quickly, and we will have sufficient scale to warrant higher levels of integration,” he said. “We will no longer take an approach of hedging our bets and planning around uncertainty as to how quickly this will happen.”

The move comes as the global auto industry rushes to control the supplies, including precious metals, needed to make batteries and individual cells that form large battery packs to power up to 300 new electric models. which will be released over the next two years. Under the leadership of new CEO Jim Farley, the plan is a reversal of Ford’s previous path of buying technology and batteries from supply companies. However, the company said it could still partner with vendors, universities, and startups on the tech.

Ford will not say where in Southeast Michigan it plans to build the battery center, named “Ford Ion Park”, nor will it reveal the potential locations of the battery factories. The center would employ around 150 workers to start up, and many of them are already working at existing Ford sites.

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Ford said it has discussed the transition to battery power with the Biden administration, which has linked much of its climate change policy to the increase in the number of electric vehicles on the roads.

The announcement comes after Ford has been caught up in a trade secret battle between its main battery supplier, SK Innovation, and LG Energy Solution. The United States International Trade Commission ruled in February that SK had stolen 22 trade secrets from LG Energy and that SK should be banned from importing, manufacturing or selling batteries in the United States for 10 years.

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The move gave SK four years to make batteries for Ford, and that could have left the company scavenging for supplies. SK has the contract to manufacture batteries for an electric version of Ford’s F-150 pickup, the best-selling vehicle in the country. The dispute was settled earlier this month, with SK agreeing to pay $ 1.8 billion and an undisclosed royalty.

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Automakers have turned to building their own batteries and have secured their own supplies of raw materials such as lithium, copper, nickel and other precious metals directly from producers. Guidehouse Insights senior analyst Sam Abuelsamid said the global semiconductor shortage and the SK Innovation business dispute have likely caused Ford to anticipate its plans much faster.

Many automakers, including Volkswagen, General Motors and Stellantis, develop and manufacture batteries in-house or in joint ventures formed with parts supply companies, he said.

“Engines and transmissions have been seen as a core skill of auto manufacturers since 1886, but as they disappear they see the need to make replacement batteries and engines,” Abuelsamid said. “No one wants to be excluded from supplies, and as volumes increase, the cost of paying a mark-up to suppliers will increase.”

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