“This is a big deal,” Michigan Gov. Gretchen Whitmer said at a press conference unveiling plans for the factory. Expanding battery options will allow Ford to “build more electric vehicles faster and ultimately make them more affordable,” said Bill Ford, Ford’s executive chairman.

Also known as lithium iron phosphate (LFP) batteries, the type to be produced at the new plant is a lower-cost alternative to the nickel- and cobalt-containing batteries used in most electric vehicles in the US and Europe today. While the technology became popular in China, Ford’s factory, developed in partnership with Chinese battery giant CATL, was a major milestone in the West. By reducing costs, as well as increasing charging speed and extending battery life, LFPs can help empower drivers for electric vehicles.

All lithium-ion batteries contain lithium, which helps store charge in a part of the battery called the cathode. But lithium doesn’t do this job alone: ​​it’s joined in the cathode by a support cast of other materials.

The most common type of cathode used in vehicles today contains nickel, manganese and cobalt in addition to lithium. Some automakers, such as Tesla, use a different cathode chemistry made of nickel, cobalt, and aluminum. Both of these types of cathodes gained notoriety in part because they have a high energy density, which means the batteries will be smaller and lighter than others that can store the same amount of energy.

While these two used to be the default cathode choice for electric vehicles, lithium iron phosphate, an older chemistry, has made a comeback in the past few years, largely thanks to huge growth in China.

These iron-containing batteries are typically about 20% cheaper than other lithium-ion batteries of the same capacity today. This is partly because LFP does not contain cobalt or nickel, expensive metals whose prices have fluctuated significantly in recent years. Battery manufacturers are also working to reduce cobalt content, because mining the metal is associated with particularly harmful working conditions.

Making cathodes free of cobalt and nickel could help automakers cut costs, and some have already begun changing the battery chemistry used in cars sold in the US. Tesla is importing LFP cells from China today for some models, including the Model 3. Ford previously announced it would start using the technology in its Mach-E in 2023 and the F-150 Lightning in 2024.

With the newly announced factory, Ford will be the first automaker to manufacture LFP batteries in the US. The new facility, which will use CATL’s technology, could help launch LFP production in the U.S. on a larger scale. “This is a pivotal moment for the North American manufacturing landscape,” he says Evelina Stoykovabattery technology analyst at BloombergNEF, an energy research firm.

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