Ford’s LFP Licensing Strategy Highlights Shifting Dynamics in EV Battery Supply Chains

EV Co has shared an update.

The post highlights comments from Ford CEO Jim Farley regarding Ford’s decision to license Chinese lithium-iron phosphate (LFP) battery technology from CATL for its Michigan battery plant. Farley stated that licensing was the only legally viable route and argued that producing batteries domestically with licensed IP is preferable to relying on imports, emphasizing U.S.-based operations, employment, and closer access to core battery technology.

For investors, the update underscores the strategic importance of LFP technology and localized battery manufacturing in the broader EV value chain. It points to a continued trend of Western automakers partnering with Chinese battery IP holders to accelerate time-to-market and secure supply, rather than developing competing chemistries from scratch. This dynamic may influence cost structures, capital allocation, and partnership strategies across the EV ecosystem.

For a company like EV Co, the focus on domestic production using licensed IP suggests a competitive environment where access to proven battery technology and manufacturing know-how can be as critical as proprietary innovation. Firms positioned to supply equipment, engineering services, or integration capabilities for LFP facilities in North America could benefit from this shift. Conversely, persistent dependence on foreign IP, even when localized, may keep pressure on margins and regulatory risk, factors investors should monitor as the policy environment around Chinese technology and domestic content continues to evolve.