Ford takes the first step towards manufacturing its own car battery cells for electric vehicles, following Tesla and GM

Ford declared the launch of a new battery development center in Michigan, the initial move toward taking on some of the burdens of building its own battery cells for electric cars in-house. Ford Motor intends to invest $185 million into a new battery lab as a step toward manufacturing its own battery cells for electric vehicles, the organization reported Tuesday.

The new “global battery center of excellence” will be called Ford Ion Park and will be situated in Southeast Michigan. Ford said the object is to research the best way to approach making its own electric vehicle batteries. A team of 150 specialists will work on approaches to construct EV batteries that are long-lasting, fast to charge, and sustainable for the environment. They will likewise build up a process for making batteries rapidly, economically, and at scale.

Be that as it may, Ford Ion Park, which will open late one year from now, won’t 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, yet the automaker should construct a new factory to manufacture EV batteries at scale. Ford would not give a timeline regarding when it expects to launch its own battery cell production line, nor whether it would build a new factory to house battery manufacturing.

“We want to give Ford the flexibility and optionality to eventually vertically integrate, and that was one of the drivers behind the creation of this battery center of excellence in Ford Ion Park,” Thai-Tang told reporters during a media briefing Tuesday.

“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.”

The funds will go toward building Ford Ion Park, a “pilot facility” for production that is relied upon to open before the next year outside Detroit. The planned 200,000-square-foot lab is intended to speed up the development of the technologies as the organization plans to “eventually manufacture” new battery cells and batteries, as per Hau Thai-Tang, Ford’s chief product platform and operations officer.

Thai-Tang said Ford will focus on “advancing” the next generation of lithium-ion batteries that are used today. The organization is likewise investigating strong state lithium metal batteries considered more secure and better than the cells available on the market now. He said Ford intends to do as such through internal work as well as collaborations.

Ford, which is as yet in the beginning stages of its change to electric vehicles, has said it intends to spend $22 billion on the shift, including $7 billion on autonomous vehicles, through 2025. Most of the vehicles it plans on producing will be battery-electric vehicles, yet the organization additionally has hybrid and plug-in hybrid models with traditional internal combustion engines.

Ford declined to examine a timetable for producing battery cells internally. The organization at present buys cells from suppliers, for example, South Korea-based SK Innovation.

Ford’s new facility won’t be a full battery cell production facility like Tesla has or like General Motors has declared as a feature of $4.6 billion investments in two U.S. battery cell production plants with LG Energy Solution.

Thai-Tang said Ford trusts it still makes sense to buy the cells from suppliers until EVs become more standard. EVs represented only about 2% of U.S. vehicle registrations a year ago, as indicated by IHS Markit.

Ford just began delivering its first long-range EV, the Mustang Mach-E, notwithstanding some initial hiccups with software updates. It additionally presented an all-electric Transit van a year ago and plans on uncovering an electric version of its bestselling F-150 pickup truck later this year.

It’s an all the more monetarily unsafe move with possibly lucrative rewards later on if Ford can effectively enhance production from its own suppliers. Ford at present sources its batteries from South Korea’s SK Innovation, which recently lost a trade secret dispute with rival LG Chem that could upset its imports to the US. (The organizations recently arrived at an agreement that could turn away a potential import ban.) By making its own batteries, Ford can keep away from some of the conflicts that emerge from sourcing batteries abroad.

Despite these plans, Ford should move all the more forcefully if it desires to get up to speed with 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 divulged its own plan to have six “gigafactories” in Europe by 2030. Tesla, in the interim, is in the beginning phases of making its own “tabless” battery cells in-house.

As recently as last July, at that point CEO Jim Hackett said there was “no advantage” to Ford making its own battery cells. In any case, Jim Farley, who supplanted Hackett in October, took the contrary position, portraying the manufacturing of batteries in-house as a “natural” step as EV volumes develop.

As indicated by Thai-Tang, the new center is a signal of how serious Ford is tied in with 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.

Ford is recruiting 150 individuals for Ion Park and has already brought on certain workers.

The investment and hiring come after Ford put $100 million into a new battery benchmarking and test lab. The organization said it opened the facility a year ago in Allen Park, Michigan, a suburb of Detroit. The two investments add to Ford’s plans to put $22 billion into vehicle electrification from 2016 through 2025.

Ford’s first new EV, the Mustang Mach-E, launched in the U.S. toward the finish of a year ago. The organization hopes to follow it with an all-electric Ford Transit van later this year and an EV version of the Ford F-150 pickup by mid-2022.

Ford’s plan to manufacture battery cells comes a half year after new Ford CEO Jim Farley said the automaker was “absolutely” interested in producing its own batteries. Farley shifted the course set by his predecessor, Jim Hackett, who had said the automaker saw “no advantage” in doing as such. Farley succeeded Hackett on Oct. 1.

Ford’s declaration comes a day before the organization is planned to report its first-quarter earnings.

Shares of Ford are up by about 60% since Farley became CEO, incorporating 40% in 2021. The organization’s market cap is more than $48 billion.