Ford: In-House Batteries Aren't Cheap. For Taxpayers

Cammy Corrigan
by Cammy Corrigan

Zacks Investment Research reports that Ford will invest $500 million in Michigan for developing and building batteries for their hybrid and electric vehicles. In return, they have asked the Michigan government for a tax break between $85 to $120 million. Michigan haven’t confirmed whether they’ll give this tax break, which is handy because Ford have indicated that they will look elsewhere if the tax break isn’t given. This investment will create 1000 jobs. Each job will cost at least $85000? Shocking!

Ford have decided that battery development is a key job which needs to be developed in-house. Which is bad news for Delphi, since they currently make Ford’s batteries for them. Just what they needed as they were coming out of bankruptcy. This plant will supply batteries for the Transit Connect EV, the Focus EV and hybrid versions. Ford are choosing to manufacture Lithium Ion batteries instead of Nickel Metal hydride ones. Not only are they smaller and lighter, they can be tuned to increase power to further acceleration. It’s nice to see that Ford are creating new jobs, but as with Nissan and their Leaf production in Tennessee, the amount of tax money per job is phenomenally high. Is it worth it?

Cammy Corrigan
Cammy Corrigan

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4 of 16 comments
  • Carguy Carguy on Dec 10, 2009

    Governments subsidizing some aspect of the energy industry is nothing new. No one seemed to mind when the previous administration gave billions of dollars worth of tax breaks to oil, gas and coal companies. This is more of the same just to a different end of the market.

  • Colin42 Colin42 on Dec 10, 2009

    I had an interesting discussion with a battery guy yesterday about the concerns of transporting lithium batteries (especially on aircraft) due to the potential of having a cell short, catching fire & sending the rest of the cells up in smoke. This brings up an interesting issue about lithium batteries in vehicle accidents! Perhaps this is the real reason Toyota are sticking with Nickel Metal hydride?

  • Z71_Silvy Z71_Silvy on Dec 10, 2009

    So this is what our 5.9 BILLION is paying for? Dead end technologies like hybrids and batteries? Just give us what we want...diesel!

  • Mcs Mcs on Dec 11, 2009

    Here's an interesting post on lithium battery safety for rc models. I'm curious as to how the insurance companies and body shops will handle these cars when they've been involved in a collision. If the collision is severe enough to potentially cause internal battery damage, do they automatically replace the packs? What does that do to the insurance costs of one of these cars - like the Volt? If they don't automatically replace them, who gets to be the lucky person that tests the battery after the crash?