Ford Partners Chinese Company CATL To Build A New $3.5b Plant In Michigan

Ford's move is also to get subsidies from the Biden administration. In August of 2022, Biden signed the Inflation Reduction Act, which included subsidies for battery manufacturers and a $7,500 tax exemption for consumers but stipulated that most of the vehicle's batteries and key materials must come from the United States or US-approved countries. The company expects the new factory to produce approximately 35 gigawatt-hours of lithium iron phosphate batteries per year, providing power for 350,000 electric vehicles. The factory is also an important part of Ford's strategy to shift from oil to electricity. The company has cooperation projects with LG and SK Innovation in Tennessee and Kentucky to build battery plants, with the goal of producing 2 million electric vehicles annually by 2026, and this year's goal is 600,000.

Among all traditional car companies, Ford is the boldest. Since 2019, the company has invested $17.6 billion in electric vehicles and batteries and willing to overturn its most profitable product by launching the electric pickup truck F-150 Lightning. Strategically, the company has not launched a large number of models like other car companies, but focused on three main models, targeting different consumer groups. This ensures Ford can lock in a certain production capacity and reduce costs through scale effect. At the same time, the company has also reduced prices along with Tesla, reflecting that it does not care about short-term profits, but aims to stabilize its market share in the long-term. Its long-term goal for electric vehicles is more aggressive than other traditional car companies. While General Motors' goal is to produce 1 million electric vehicles by 2025, Ford expect production will be double that of General Motors in 2026.

It's clear that Ford's management is very visionary, and they all know that electric vehicles are the trend of the future, willing to sacrifice short-term benefits to ensure the company's longevity. So I believe that Ford will be the most able to overcome the difficulties of the transition from oil to electricity among traditional car companies.