Yahoo Finance autos reporter Pras Subramanian joins Yahoo Finance Live with the latest EV news from Ford.

Video Transcript

SEANA SMITH: Ford is expanding its footprint in Michigan, announcing plans for a new $3 and 1/2 billion battery plan for EVs, and they're doing it with a Chinese supplier, despite some of the rising tensions that we've seen between the US and China. Senior autos reporter Pras Subramanian joining us now with more on that story. And Pras, I know you spoke to one of the executives at Ford. What did you learn about this announcement?

PRAS SUBRAMANIAN: Yeah, Ford going big here with that $3 and 1/2 billion plant in Michigan. They're making these LFP batteries, which are a little bit different than normal kind of nickel batteries that we normally see in EVs. They're cheaper to make. They're more easier to make. They also can charge more and kind of discharge more without kind of degrading. But they're not good for, like, high power uses like towing and things like that, but good for commuter cars.

It's not a good thing for, like, their Ford Mach-E's and cars like that. Ford says this investment is part of, like, their $18 billion that they put in the US just for batteries alone. But yes, you brought the CATL element there. This deal, actually, Governor Youngkin in Virginia canceled this deal because he was concerned about the China element, saying it was a Trojan Horse for China. So we spoke to Lisa Drake, the VP of EV industrialization at Ford, about this. And I asked her about did she have any concerns about China, given what's been going on recently.

LISA DRAKE: No, it's not. The auto industry, in general, is a huge global marketplace. We try and distance ourselves as much as possible from any geopolitical tensions. And we really focus on what's right for our business and for our customers. CATL is the largest battery supplier in the world. And they have great LFP technology. And it's in many of the devices we all use today in the US. And it's even in some EVs today.

But it's all imported into the United States. And we took this opportunity to actually put our investment in the US with American manufacturing jobs so we can make the technology here in the US. As we mentioned, 2,500 great high skilled jobs, all of the indirect jobs that will come with that as well, right here in the state of Michigan.

PRAS SUBRAMANIAN: So, yeah, Ford says that the plant is owned by Ford wholly. All the employees are Ford workers, right? And they're just licensing the tech from CATL. There's no CATL sort of operation there, aside from technology licensing.

DAVE BRIGGS: It's just tenuous timing. Not great timing, given all that's going on in the world, all the geopolitics, the spy balloons, whatnot. Not a great look to be announcing that, of all days, today. The requirements in the Inflation Reduction Act, how did that play in here?

PRAS SUBRAMANIAN: So I asked her about that as well-- did the IRA have any effect on them? And said yes, absolutely. This is one of the big reasons why they wanted to have this plant in the US to build these batteries here because of the critical sort of requirements needed for the federal tax credit, you need to actually assemble the batteries in the US, let alone get materials for those batteries.

So that's why this is a big part of it. But yeah, you're right, Dave. I mean, talk about, like, the timing just couldn't be better for them-- I mean, just after the fourth balloon in the US here? So I think that's why it's a little bit on edge about that, but they're happy with the deal.

DAVE BRIGGS: Yeah, I was surprised to hear Jim Farley earlier today say that there was no US alternative that could have taken place at that Chinese company, which begs a lot of questions, which we don't have time to go into at the moment. Pras, good to see you. Thanks.