Ford Motor Company has announced plans to invest $3.5 billion in a new electric vehicle (EV) lithium-ion battery plant in southwest Michigan. The project, known as BlueOval Battery Park Michigan, is supported by $246 million in state incentives and will create 2,500 new jobs.

The new plant will cover 2.5 million square feet of land and is expected to produce lithium-ion batteries that are more affordable, durable and charge faster. The project is a major step towards achieving Ford’s goal of producing two million electric vehicles per year by the end of 2026. BlueOval Battery Park Michigan will also add 35 gigawatt hours per year of battery capacity to Michigan, which is predicted to see some of the highest growth in battery manufacturing capacity in the US by 2030.

According to Bill Ford, Executive Chair of Ford, the new plant will bring the US “closer to battery independence” and reduce dependence on imported materials. “This investment will continue to bring the supply chain of electric vehicle batteries home to Michigan and make sure that production lines aren’t stalled by global shocks or shipping delays,” said Michigan Governor Gretchen Whitmer.

The Michigan Strategic Fund Board has granted Ford a $210 million grant and lower taxes for 15 years with a Renaissance Zone designation. In addition, the Marshall Area Economic Development Alliance has been given a $36 million loan to purchase land parcels. Grant funding for the project came from the Strategic Outreach and Reserve fund, a pot of economic incentive dollars created to lure big-business investments. The state economic board expects to repay the loan with a site readiness grant from SOAR dollars.

The Marshall project is Michigan’s first “mega site” to win a multi-billion-dollar project. The state had prepped four mega sites – each roughly 1,000 acres or more – to attract major investments despite pushback from some residents. Whitmer secured five major electric vehicle projects in Michigan last year, awarding about $2 billion in incentives to General Motors, Ford Motor Co., LG Energy Solutions, Chinese battery maker Gotion and Detroit startup Our Next Energy.

While Ford considered other sites for the new plant, including locations outside of North America, CEO Jim Farley stated that Michigan was “clearly, the hands down winner of all the sites”. This project represents another major investment in the growing EV industry, with many states and companies racing to expand production and supply chains in anticipation of increased demand for electric vehicles. The new battery plant in Michigan is expected to play a key role in meeting this demand and advancing the industry’s growth.