Ford aims to secure battery material supply with new Canada facility

Ford is partnering with South Korean battery manufacturers SK On and EcoPro BM to build a cathode manufacturing facility in Quebec, Canada. The CAD $1.2 billion (USD $890 million) joint investment will provide battery materials to supply future Ford electric vehicles.

The onshoring of battery factories in the U.S. has boomed since the passage of the Inflation Reduction Act in August 2022, which offers a range of tax credits for the production of clean energy. Ford, in partnership with SK On, has already pledged to spend close to $15 billion across three battery cell manufacturing facilities in the U.S. with an expected collective capacity of 164 gigawatt-hours annually.

Now, the automaker is working to secure its supply of battery materials so that its vehicles can qualify for the IRA's EV tax credit.

The credit offers consumers $7,500 if the vehicle they buy meets certain battery sourcing and production guidelines. The IRA requires that 60% of the value of battery components be produced or assembled in North America in 2024 to qualify for half of the tax credit, $3,750. That percentage will increase to 100% starting in 2029. To get the remaining half, 50% of the value of critical materials must be sourced from the U.S. or a free trade agreement country in 2024 and 80% from 2027 to 2032.

Other automakers are making moves to shore up battery material supply, as well. On Wednesday, General Motors announced an investment into battery materials startup Mitra Chem, which is developing iron-based cathode materials. In May, Tesla shared plans to build a lithium refinery plant in Texas.

Construction on the Ford-SK-EcoPro facility has already begun, and production of the 3 million-square-foot factory is slated to begin in the first half of 2026. The site will have the capacity to produce up to 45,000 tons of cathode active material per year, according to Ford. The automaker estimates the new factory will produce 345 new jobs in Quebec.

EcoPro will build the cathode active materials, specifically high-quality nickel cobalt manganese. The company will also work on R&D to increase battery safety, performance and productivity while decreasing the environmental footprint of the manufacturing process.

Once the deal is closed, EcoPro's Canadian counterpart, EcoPro CAM Canada, will oversee day-to-day operations of the facility. SK On and Ford will become investors.

Ford isn't the only one that will be using the cathode materials from the new Canadian facility. SK On's U.S. subsidiary, SK Battery America, has invested $2.6 billion into two of its own manufacturing plants in Jackson County, Georgia. SK On is also partnering with Hyundai to build a plant, and collectively, the company expects its annual production capacity in the U.S. to reach more than 180 GWh after 2025.

"Through the cathode [joint venture], the three companies can have a stable supply of battery raw materials in North America," said SK On's chief commercial officer Min-suk Sung in a statement.