By Li Panpan

Chinese battery maker CATL and US automaker Ford Motor Co. are considering building a battery manufacturing plant in Michigan in a complex arrangement designed to reap new tax benefits without running afoul of US-China political sensitivities, reported Bloomberg on December 15.

The two companies are weighing a novel ownership structure under which Ford would own 100% of the plant, including the building and the infrastructure, while CATL would operate the factory and own the technology to build the cells, according to Bloomberg’s sources. Such an arrangement would let the facility qualify for lucrative production tax credits under the new Inflation Reduction Act while requiring no direct financial investment from CATL.

Michigan has emerged along with Virginia as a potential home of the multibillion-dollar facility, which will provide lithium iron phosphate batteries for Ford's electric models, according to Bloomberg.

“CATL is still deliberating on investing in the US and we have not made the decision yet,” the battery maker said in an emailed statement.

The company, which already has a deal to sell batteries to Ford for use in its flagship F-150 Lightning and Mustang Mach-E vehicles, said it's “not true” that the Chinese government objects to CATL investing in the US.

Ford said in a statement that “our talks with CATL continue — and we have nothing new to announce.”