Virginia bans Ford and CATL traction battery plants over risks

Virginia bans Ford and CATL traction battery plants over risks of cooperation with China

The state of Virginia (USA) has blocked a joint initiative by Ford Motor and China’s CATL to build a plant to manufacture traction batteries for electric vehicles. According to Business Korea, the reason was the potential risks of future Sino-US cooperation – local governor Glenn Youngkin takes an outspokenly anti-Chinese position.

    Image source: CATL

Image source: CATL

Ford and CATL planned to launch lithium iron phosphate batteries for electric vehicles. According to the plan, the plant should be owned 100 percent by Ford, the company should be responsible for the construction including the creation of the infrastructure and CATL should take over the operational management of the company. In addition, it owns advanced battery production technologies. This engagement would allow Ford to claim benefits under the US Inflation Reduction Act of 2022.

According to experts, the project would be mutually beneficial, since even without direct investments, CATL would get a manufacturing base in America, and Ford would get a stable supply of high-quality traction batteries.

The announcement by state authorities came at the stage of deciding in which particular region of the United States production would be organized. Both Virginia and Michigan were considered. In other words, the first CATL facility in the US is expected to be built in Michigan. Incidentally, last year the Chinese Gotion High-tech also decided to build a battery factory in this state – numerous advantages were promised by the local authorities.

According to Business Korea, South Korean traction battery makers could benefit from anti-Chinese sentiment in Virginia, citing experts. Potential beneficiaries include SK On, which already supplies lithium-ion batteries for Ford F-150 pickups and is building a joint plant with Ford in Kentucky.

Meanwhile, CATL continues to expand production in other regions of the world. At the end of last year, the company’s plant in Germany was put into operation. The company is a leader in the manufacture of traction batteries for electric vehicles and controls about a third of the world market.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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