Ford, LG to Bring Mustang Mach-E Battery Production to Michigan, Eyeing IRA Tax Breaks

In a major move for U.S. EV production, Ford and LG Energy Solution will relocate Mustang Mach-E battery manufacturing from Poland to Michigan by 2025. The shift aligns with IRA tax incentives, designed to encourage domestic EV supply chains.

Ford and LG Realign EV Battery Production for Tax Credit Benefits

The production of electric vehicle batteries for the Ford Mustang Mach-E will be relocated from Poland to LG's Michigan factory in 2025, as per a newly signed deal between the two firms, Electrek shares. Obviously, this is highly relevant to individual retirement accounts and tax credits.

New Agreement Aims to Harness Competitive U.S. Market Conditions

"To capitalize on competitive market conditions," the new agreement states, relocating production of Ford Mach-E batteries to the United States. This will allow the batteries to take advantage of the varied incentives offered by the American government. Starting in 2026, LG intends to supply Ford with 109 GWh of batteries for its electric commercial vans, taking advantage of subsidies in Europe.

"These agreements attest to our experience and expertise in powering commercial vehicles with innovative battery technologies designed to handle extreme user environments," stated David Kim, CEO of LG Energy Solution. "Capitalizing on our local production capacity, we will secure leadership in the European market and deliver unmatched values to our customers through advanced battery technologies that effectively address diverse needs."

Ford Leverages IRA Tax Credit to Boost Domestic EV Battery Chain

In order to be eligible for the (up to) $7,500 New Clean Vehicle Tax Credit on PHEVs and EVs, several automakers, including Ford, have entered into strategic arrangements to expand their American battery supply chains.

LG’s $3 Billion Michigan Investment to Supply U.S.-Built EVs

In a related development, LG Energy said that it will be investing $3 billion in its battery factory in Michigan to supply lithium to Toyota. This lithium will be utilized in the batteries of future electric vehicles manufactured in the United States.

Ford’s Broader Battery Production Push Includes SK On in Kentucky

Along with the agreement with LG, Ford also has a contract with SK On to manufacture batteries in Kentucky for the upgraded E-Transit commercial van and F-150 Lightning electric pickup starting in the middle of 2025.