Ford Relies on Chinese Technology: Why?
On March 1, the Korean media "Chosun Ilbo" published an article stating that Ford, one of the three major American automakers, is making a conservative adjustment to its electric vehicle strategy while actively advancing cooperation with Chinese battery companies CATL and BYD.
This shift is interpreted as a comprehensive consideration: on one hand, the slowdown in demand for electric vehicles and declining profitability have forced companies to adjust their development pace; on the other hand, companies must quickly master low-cost lithium iron phosphate (LFP) battery technology, which is a key competitive advantage.
Recently, the chairman of the U.S. House of Representatives' Select Committee on U.S.-China Strategic Competition wrote a letter to Ford CEO Jim Farley, requesting an explanation of the nature of Ford's relationship with CATL.
Ford previously announced that it would begin producing electric vehicle batteries at its Michigan factory through a technical collaboration with CATL in 2023; recently, Ford also announced that it would produce energy storage systems (ESS) based on CATL technology at its Kentucky factory.
After several consecutive quarters of losses in its electric vehicle business, Ford has been adjusting its electric vehicle investment plan. With Donald Trump elected as president, electric vehicle policies may change, and the company is adjusting the pace of its expansion of electric vehicle product lines and strengthening its strategy of prioritizing higher-profit market segments.
Despite this trend, Ford has not abandoned its strategy of internalizing battery production. Ford has already built a lithium iron phosphate battery factory in Marshall, Michigan, and has been committed to obtaining technical licenses from CATL and applying them to production. Ford emphasized that this arrangement avoids the traditional model of Chinese capital owning production bases in the United States, with Ford directly owning and operating the factory, while CATL provides manufacturing technology and expertise.
The reason Ford chose CATL lies in the cost competitiveness of lithium iron phosphate batteries. Although the energy density of lithium iron phosphate batteries is lower than that of nickel-cobalt ternary batteries, their price is lower and the supply chain is relatively stable, thus helping to reduce the price of electric vehicles in the mass market.
The difficulty for Ford to quickly gain lithium iron phosphate battery technology and large-scale production experience in the United States is also an important reason for this decision. Even if Ford slows down its electrification process, ensuring price competitiveness remains a major challenge. Therefore, Ford's fundamental consideration is to quickly obtain lithium iron phosphate batteries to reduce battery costs.
Ford is also exploring the possibility of expanding cooperation with Chinese enterprises. Recently, there were reports that Ford is considering using BYD batteries in some hybrid models, and is actively discussing plans to purchase batteries from Ford factories outside the United States. This contrasts sharply with the company's previous liquidation of its joint ventures with South Korean companies such as SK On.
In a previous interview with the Financial Times, Ford emphasized job creation and its contribution to the local economy, stating, "Expanding the production of lithium iron phosphate batteries in the United States is an investment in energy security and American workers." The factory located in Marshall, Michigan, is expected to start operations this year and will employ approximately 1,700 employees.
Original: toutiao.com/article/1858458235919436/
Statement: The article represents the views of the author.