Virginia governor scraps Ford's bid for EV battery plant with Chinese partner
A Ford Motor Co. battery plant investment sought by Michigan and Virginia that would have created roughly 2,500 jobs was rejected by Virginia Gov. Glenn Youngkin, a potential Republican candidate for president, over his objections to the involvement of a Chinese partner.
“While Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist party, which could compromise our economic security and Virginians’ personal privacy," Youngkin spokesperson Macaulay Porter said in a statement to The Detroit News.
“Virginians can be confident that companies with known ties to the Chinese Communist Party won’t receive a leg up from the Commonwealth’s economic incentive packages," she added. "When the potentially damaging effects of the deal were realized, the plant proposal never reached a final discussion stage.”
Whitmer: Youngkin made 'political determination' rejecting Ford battery plant over China concerns
If the project had moved forward in Virginia, it would have delivered another blow to the Dearborn automaker's home state of Michigan. Ford sent shockwaves through the Lansing political class and business leaders when it confirmed plans in September 2021 to invest more than $11 billion in EV and battery production in Tennessee and Kentucky amid a growing tide of auto investment in the south and southeast.
But that appears to be off the table after Youngkin rejected the project in December, a decision that potentially cost one of the poorest parts of Virginia at least 2,500 jobs. The project would have been built on the Southern Virginia Mega Site at Berry Hill in Pittsylvania County, in the Southside region of south-central Virginia, the Richmond Times-Dispatch reported.
The Times-Dispatch reported that the plant would have produced lithium iron phosphate batteries for Ford's EVs. Ford in July unveiled key aspects of its strategy for sourcing raw materials for batteries, including the addition of LFP battery cells to its portfolio — a move that would help the Dearborn automaker reduce its reliance on such battery minerals as nickel and cobalt.
Still, Michigan remains among the finalists vying for the joint-venture operation, according to two sources familiar with the situation. Sites in Marshall, Grand Ledge near Lansing, and Mundy Township in Genesee County are considered sufficiently large to accommodate a plant to build batteries for Ford's next-generation electric vehicles.
Ford's battery plant project involves Chinese battery maker Contemporary Amperex Technology Co. Ltd., or CATL, already a battery supplier to the Blue Oval. The automaker previously said CATL would supply full LFP battery packs for the electric Mustang Mach-E in North America starting this year, and for the Ford F-150 Lightning electric pickup truck starting in 2024.
But in addition to locking up agreements with suppliers, localizing battery cell production through joint ventures also has been key to Ford's strategy to shoring up its EV supply chain as it aims to produce 600,000 electric vehicles globally by the end of this year and 2 million globally by 2026.
Construction is underway, for example, on three battery plants Ford is building with JV partner SK On — two in Kentucky, one in Tennessee — as part of the automaker's largest-ever manufacturing investment.
In July, when Ford revealed some of its sourcing strategies for EV components and raw materials, the company said it planned to add 40 gigawatt hours of LFP battery capacity in North America starting in 2026. At the time, executives declined to comment further on that plan.
Youngkin, the Virginia governor eyeing a 2024 run for president, halted the Ford plan to build a battery plant in Virginia in December because it involved a partnership with CATL, according to the Times-Dispatch. The newspaper said he first publicly discussed this decision last week following his State of the Commonwealth address on Wednesday.
Local officials in Pittsylvania County declined comment to the Times-Dispatch because they had signed nondisclosure agreements, but Democratic state lawmakers blasted Youngkin over the potential lost jobs.
"The governor's decision to to pull Virginia out of the competition for the new Ford facility puts the Commonwealth at a severe disadvantage," state Sen. Ghazala Hashmi, D-Chesterfield, wrote the Times-Dispatch in an email.
The News reached out to the Michigan Economic Development Corp., but CEO Quentin Messer Jr. was not immediately available to comment because he's accompanying Gov. Gretchen Whitmer and her delegation on a trade mission to Norway and Switzerland. The governor is scheduled to attend the World Economic Forum in Davos later this week.
jgrzelewski@detroitnews.com
Twitter: @JGrzelewski
daniel.howes@detroitnews.com