Ford may invest $500M in Michigan for electric cars

Ford Motor Co. said today it might invest between $300 million and $500 million to assemble hybrid and plug-in hybrid vehicles and assemble lithium ion batteries in Michigan if it receives tax credits from the state.

The investment would create up to 1,000 new jobs at a plant yet to be named.

“Michigan has a fantastic vision and we received a lot of positive comments,” Nancy Gioia, Ford’s director of global electrification, said today after testifying for state Senate’s commerce committee in Lansing.

Ford is asking the state to modify its battery development tax breaks so that batteries for both hybrid and plug-in electric vehicles are eligible for tax credits. Currently, the tax credits only apply to the development of batteries for plug-in electric vehicles.

Gioia said hybrid vehicles that are powered both by batteries and gasoline engines, such as the Ford Fusion hybrid and Toyota Prius, will account for the bulk of electric vehicle sales for many years.

Currently, Michigan offers a $500 tax credit for a four kilowatt per hour battery pack with a maximum total value of $135 million.

Ford is asking the state to approve tax credits of up to $85 million between 2012 and 2014 and an additional $35 million after 2014. On Wednesday, Gioia will testify Wednesday in front of a Michigan House committee.

“Michigan, we think, is a great site, we think it works well with a number of initiatives Michigan has developed,” Gioia said, and “it drives high-value new jobs in Michigan.”

However, Gioia said Ford is considering several other sites around the world where it builds or plans to build compact cars, including Louisville, Ky.; Saarlouis, Germany and Chongqing, China.

Megan Brown, spokeswoman for Michigan Gov. Jennifer Granholm, said the governor supports Ford’s request.

“This is part of our long-term strategy to attract all of the electric and battery supply chain to Michigan,” Brown said. “Coming after the Chevy Volt announcement Monday, this is more great news.”

Ford’s announcement came one day after General Motors Co. announced it would invest $336 million at its Detroit-Hamtramck Assembly Plant to produce the Chevrolet Volt.

“We’re aware of their efforts and we support them,” said Bridget Beckman, a spokeswoman for Michigan Economic Development Corp. “It fits in with our advanced battery strategy.”

Gioia also said Ford has decided to bring the assembly of lithium ion battery packs and battery pack development in-house and is considering Michigan for that work as well.

Ford currently buys battery packs made by Delphi Corp. in Mexico. Ford currently sells several hybrids, including the Escape SUV and the Fusion and Mercury Milan hybrid sedans introduced earlier this year.

Ford declined to say where in Michigan the assembly of the next generation hybrid and plug-in hybrid vehicles might occur but has said they would be built off the company’s compact car platform.

Previously, Ford announced plans to introduce a battery electric version of its Transit Connect commercial van in 2010, an battery electric Ford Focus compact car in 2011, as well as a next generation hybrid vehicle and a plug-in hybrid vehicle by 2012.

Ford plans to begin building a new version of the Ford Focus compact car late next year at its Michigan Assembly Plant in Wayne and an electric version of the Focus at that plant in 2011.

Ford has already pledged to spend $500 million to retool Michigan Assembly to build the Focus and will receive more than $160 million in local and state tax credits and grants for that project.