Therefore Ford would have structured the arrangement in a way to ensure eligibility, but also pay CATL with other pots of money that would not have been available without the tax credit. Ford is not a member of the CPA.Ī partner specializing in national security litigation at a global law firm in Washington said that the underlying viability of the deal rested on access to the IRA tax credit. CPA is an advocacy organization representing exclusively manufacturers that have productions in the United States. Unlike the credit for consumers, IRA’s production tax credit doesn’t have a “foreign entity of concern” exclusion clause.Īccording to Nick Iacovella, a spokesperson for the Coalition for a Prosperous America (CPA), the production tax credit amount for the battery plant could reach $1 billion, depending on the exact terms of the licensing agreement, given the factory’s annual capacity of 35 gigawatt-hours, or 35 million kilowatt-hours. Ford confirmed to The Epoch Times that it expected the new battery plant to qualify for the production tax credit, although the amount has yet to be determined. The Treasury Department has said it would release the proposed guidance on “foreign entity of concern” and other terms in March.Ī more lucrative tax credit, however, is the new advanced manufacturing tax credit for manufacturers at $45 per kilowatt-hour tied to EV battery cells and modules.
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This credit won’t be available for vehicles with components manufactured or assembled by a “foreign entity of concern,” generally a reference to China, Iran, Russia, and North Korea.įord expects that buyers would initially be eligible for half of the $7,500 in tax credits, with the possibility of getting the full amount over time based on where the firm sources battery minerals. Under the new law, customers of EV vehicles can receive up to $7,500 in “clean vehicle credit,” with the amount dependent on whether the vehicle, batteries, and battery components are made and sourced from the United States. The automaker expects the deal will be able to take advantage of federal tax credits for EVs under the Inflation Reduction Act (IRA). Ford will introduce LFP batteries on Mustang Mach-E this year and on the F-150 Lightning in 2024, using CATL batteries from China, before the plant opens in Michigan in three years’ time. Tax Creditsįord expects production to begin in 2026 with the plant estimated to produce enough batteries for 400,000 EVs each year. “While Ford is an iconic American company, it became clear that this proposal would serve as a front for the Chinese Communist Party (CCP), which could compromise our economic security and Virginians’ personal privacy,” Youngkin’s spokesperson previously told The Epoch Times in an email. efforts to strengthen the American auto industry.
Youngkin called Ford’s battery plant a “ trojan horse” for the Chinese Communist Party to undermine U.S. Glenn Youngkin, a Republican, late last year pulled the Commonwealth out of the bid for housing the factory. automaker’s collaboration with a Chinese firm, given the communist regime’s ultimate ambitions to supplant American industries in the global market. Gretchen Whitmer, a Democrat, saying the expected creation of 2,500 jobs will “build on Michigan’s economic momentum,” others have expressed alarm over the U.S. While Ford and Michigan officials have touted the deal as an economic boon for the state, with Michigan Gov. It was announced not long after the United States shot down a Chinese spy balloon that had hovered over sensitive military sites across the country, drawing widespread outrage. The deal came amid heightened concern across the political spectrum over the Chinese regime’s efforts to subvert the United States to overtake it both economically and militarily. CATL is the world’s largest manufacturer of EV batteries, known for its dominance in LFP batteries. (CATL), under a licensing agreement, will provide the EV battery technology, some equipment, and workers. 13 announced that a new $3.5 billion plant will be built in Marshall, Michigan, 100 miles west of Detroit, to produce lithium-iron-phosphate batteries, better known as LFP, a type of battery cheaper but less energy-dense than the nickel-cobalt-manganese chemistry that currently dominates the market.Ī wholly-owned subsidiary will own the factory and employ the workers, Ford said, while China’s Contemporary Amperex Technology Co. (Stan Honda/AFP via Getty Images)įord’s new deal with a Chinese electric vehicle ( EV) battery manufacturer has triggered bipartisan concern over economic and national security risks.
The Ford Motor Company logo during a press preview at the North American International Auto Show in Detroit on Jan.
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