Ford reduces Michigan battery plant, resumes construction



Ford Motor is scaling back its planned investments in an electric vehicle (EV) battery plant in Michigan. The auto giant’s partnership with Chinese battery maker CATL had sparked controversy among US lawmakers, leading to a reduction in the plant’s capacity, investment, and jobs. Ford had originally planned to spend $3.5 billion on the project, aiming to produce 35 gigawatt hours of batteries annually and employ about 2,500 people, but it now plans to cut the plant’s capacity to 20 gigawatt hours and reduce hiring to 1,700 jobs.

Ford Scales Back Investment in Michigan Electric Vehicle Battery Plant Due to Chinese Tech Concerns

Ford logo at the 2019 Frankfurt Motor Show

Ford Motor Company (F.N) announced that it will reduce investment, capacity, and job numbers at its forthcoming electric vehicle (EV) battery factory in Michigan. The factory has been under scrutiny due to CATL (300750.SZ), a Chinese battery maker, providing technology for it.

After a two-month pause, Ford plans to restart construction of the factory near Marshall, Michigan. The automaker intends to begin manufacturing low-cost lithium-iron batteries based on CATL technology by 2026.

Ford’s relationship with CATL has drawn criticism from U.S. lawmakers, who oppose EV subsidies benefitting a Chinese entity.

Ford is seeking U.S. Treasury Department approval for the lithium-iron batteries produced in the Michigan factory to qualify for Inflation Reduction Act EV subsidies.

Originally, Ford planned to invest $3.5 billion to expand the Michigan factory, known as the Blue Oval Battery Park, to produce 35 gigawatt-hours of batteries annually and employ around 2,500 people. However, Ford now plans to limit the plant’s capacity to 20 gigawatt-hours and reduce hiring to 1,700 jobs.

General Motors (GM.N) has also reduced investment in new EV capacity for North America due to slowing demand growth caused by rising interest rates.

Ford’s capital investment will also be reduced, in line with the 40% reduction in capacity. This suggests a new investment cost of about $2 billion. In October, Ford announced a reduction of its future EV investments by $12 billion compared to previous plans.

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