The world's biggest maker of electric-car batteries, China-based Contemporary Amperex Technology Ltd (CATL), will provide technology to Ford Motor's planned $3.5 billion electric-vehicle (EV) battery factory in Michigan.

The plant — called BlueOval Battery Park Michigan and based in Marshall — will pay CATL to use its technology to make lithium iron phosphate (LFP) batteries and will initially employ 2,500 people when production of the batteries begins in 2026, Ford announced Monday.

Under the agreement with CATL, Ford would manufacture the battery cells using LFP battery cell knowledge and services provided by CATL.

Ford said that the plant will be part of a wholly owned Ford subsidiary, and it may further increase its battery capacity if necessary.

The factory in Michigan will add approximately 35 gigawatt hours per year of new battery capacity for Ford in the US initially, powering about 400,000 future Ford EVs.

"We are committed to leading the electric-vehicle revolution in America, and that means investing in the technology and jobs that will keep us on the cutting edge of this global transformation in our industry," said Bill Ford, Ford executive chair.

Lisa Drake, Ford vice-president of EV industrialization, emphasized on a call with reporters Monday that it's a "very global marketplace", especially with EV batteries, when discussing Ford's use of Chinese technology.

Ford is the second-largest seller of EVs in the US after Tesla.

CATL was established in 1999 and has grown into a global leader in developing advanced battery technologies. It formed a partnership with BMW as early as 2012. The company has subsidiaries in Japan, France, Germany, Hungary, and the United States. It has 13 factories in Europe and Asia but none in the US. Its office in Detroit primarily focuses on promoting its batteries.

With more than 100,000 employees around the world, CATL has been the world's largest supplier of electric car batteries for the past six years. It supplies batteries to various major electric-vehicle makers, including Tesla. About a third of the electric cars currently on the road around the world are being run on CATL batteries.

LFP batteries are highly durable and tolerate more frequent and faster charging while using fewer high-demand, high-cost materials compared with nickel cobalt manganese (NCM) batteries, according to Ford.

NCM batteries hold more energy but are more expensive to make and take longer to fully recharge. Ford said the lower-cost LFP batteries will help Ford to reduce EV prices for customers.

Even before the factory is completed, Ford will start installing LFP batteries, first with the Mustang Mach-E this year and then with the F-150 Lightning in 2024.

"Ford's electric vehicle lineup has generated huge demand. To get as many Ford EVs to customers as possible, we're the first automaker to commit to build both NCM and LFP batteries in the United States," Jim Farley, Ford president and CEO, said in the company's news release.

"We're delivering on our commitments as we scale LFP and NCM batteries and thousands, and soon millions, of customers will begin to reap the benefits of Ford EVs with cutting-edge, durable battery technologies that are growing more affordable over time," Farley said.

Agencies contributed to this story.