Ford and CATL. Credit: Sina Understand China EV’s Market Real-time notifications when critical EV data is released All important data in one place 2,000,000+ data points Become a member World’s largest battery manufacturer, Contemporary Amperex Technology Co. Limited (CATL), has officially commenced production at its battery manufacturing facility in the United States, established through a technical licensing agreement with Ford Motor Company. The milestone was confirmed by Meng Xiangfeng, Vice President of CATL, during the annual conference of the China Automotive Power Battery Industry Innovation Alliance held today, as reported by Caixin. This facility marks a shift in CATL’s international strategy, moving from simple product exports to a model of integrated investment and trade. While the company is also preparing to launch production at its plants in Hungary and Indonesia later this year, the Ford partnership represents a unique technical licensing service model. Project evolution and challengesThe collaboration, initially announced in February 2023, faced a turbulent path. Originally, Ford planned a 3.5 billion USD investment in a wholly-owned lithium iron phosphate (LFP) battery plant in Michigan, with an initial design capacity of 35 GWh, capable of supplying 400,000 electric vehicles. However, the project encountered significant political and economic headwinds: Political scrutiny: In July 2023, U.S. Republican lawmakers questioned the partnership, raising concerns over potential indirect subsidies flowing to CATL under the U.S. Inflation Reduction Act. Project scaling: Following these pressures, the project was briefly suspended before being restarted in November 2023 with a reduced investment of 2 billion USD and a capacity of 20 GWh. Policy shifts: The landscape grew more complex in 2025 following the change in U.S. administration. The cancellation of national EV transition plans and the early termination of EV tax credits in September 2025 forced Ford to record 19.5 billion USD in impairment losses related to its EV assets. Despite these challenges, the partnership has remained intact. Ford has adapted by diversifying the plant’s output to include energy storage products, a move that faced further congressional inquiry in January 2026. Ford confirmed on June 17 that the facility has successfully completed the trial production of its first batch of prismatic LFP battery cells. These cells are currently undergoing rigorous testing to meet CATL’s quality standards, aiming for a defect rate of one in a billion. The plant is scheduled to deliver its first batch of automotive power batteries in 2026, which will be integrated into Ford’s economy and mid-sized electric pickup trucks. Global strategy for Chinese battery manufacturersMeng Xiangfeng emphasised that the difficulties faced by the Ford project highlight the complexities Chinese companies encounter when expanding abroad. With tightening international regulations regarding tariffs, localisation requirements, and carbon footprint standards, Meng noted that the traditional export-only model is becoming increasingly unviable. “Battery companies expanding overseas must prioritise compliance,” Meng stated, adding that Chinese firms must build robust regulatory capabilities and integrate into local communities by participating in the development of local standards and policies to secure their competitive edge. There were previous reports that CATL intended to license its technology to GM to produce LFP batteries in the US.
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