US auto manufacturer Ford announced Monday that it will build a new $3.5 billion battery plant in Michigan, diversifying its battery offerings with technology from a Chinese company as it boosts electric vehicle production.

Ford Chairman Bill Ford and other company brass joined Michigan Governor Gretchen Whitmer at an event to tout the venture, which involves a partnership with Chinese firm Contemporary Amperex Technology Co.

Whitmer, a Democrat, touted the announcement as "another win for Michigan," citing the addition of 2,500 new manufacturing jobs.

Ford had previously considered siting the factory in Virginia, but the idea was nixed by Republican Governor Glenn Youngkin in a move that was seen as a sign of Youngkin's ambitions to enter the 2024 Republican presidential race.

Ford said the Marshall, Michigan project—located about 100 miles west of Detroit—will diversify the company's battery profile away from its current exclusive use of nickel cobalt manganese (NCM), which are costly to produce because of raw material scarcity.

At Marshall, Ford will manufacture lithium iron phosphate batteries beginning in 2026. The technology involves less expensive raw materials and can tolerate more frequent and faster charging than NCM batteries, the company said.

Under the relationship with Contemporary Amperex, a wholly-owned Ford subsidiary would manufacture the battery cells using lithium iron phosphate battery cell knowledge and services provided by Contemporary Amperex, Ford said.

The auto giant is targeting annual global output of 600,000 electric vehicles by end-2023 and two million by the end of 2026.

"Ford's electric vehicle lineup has generated huge demand," said Chief Executive Jim Farley.

He added that to get as many electric vehicles to customers as possible, Ford was the "first automaker to commit" to building both types of batteries in the United States.

© 2023 AFP