The automaker announced on Monday that it will invest $3.5 billion in the construction of a factory in Michigan that will produce inexpensive batteries for some of its electric vehicles.

In the city of Marshall, the facility will be built on a greenfield site and initially create 2,500 jobs before production begins in 2026.

It will produce nickel cobalt manganese (NCM) and lithium iron phosphate (LFP) cells, which are less expensive to produce but have a lower energy density than the nickel cobalt manganese (NCM) chemistry that is currently used in all of Ford’s electric vehicles.

A Ford subsidiary will own the entire project, which will use technology licensed from Contemporary Amperex Technology Co., Limited (CATL), a Chinese battery manufacturer.

Ford has announced four battery plants in three states, including this one. Governor Glenn Youngkin of Virginia said in January that because of concerns about the connection to China, he had removed Virginia from consideration for the LFP factory. However, Ford said at the time that no final decision had been made.

“Today’s generational investment by an American icon will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification,” said Michigan Governor Gretchen Whitmer. “Let’s continue bringing the supply chain of electric vehicles, chips, and batteries home while creating thousands of good-paying jobs and revitalizing every region of our state.”

Ford Model e vice president Lisa Drake stated that the factory will have a capacity of 35 gigawatt hours per year, which is sufficient to produce 400,000 electric vehicles.

Before switching to locally produced packs, Ford will begin using imported LFP packs supplied by CATL in certain Mustang Mach-E SUV models later this year and in the F-150 Lightning next year.

According to Marin Gjaja, chief customer officer for Ford Model e, the LFP batteries are also more durable, less susceptible to fire, and can be regularly fast charged to 100% full, whereas NCM batteries are typically restricted to an 80% fast charge to protect them from damage. The LFP cells will replace the NCM technology that is used in entry-level Standard Range models, while NCM will continue to be used in longer range and higher power applications.

The lowest-priced F-150 Lightning Pro work truck, which has a range of 240 miles and starts at $57,869, is a standard-range Mustang Mach-E that can go 247 miles on a single charge.

Gjaja stated that the “intent is to make them more affordable and accessible,” but he did not specify how much the LFP-equipped vehicles would cost.