Ford Makes Dramatic Cuts To EV Plant In Michigan

Ford Motor Company announced on November 21 that it would be scaling back the investment, capacity, and projected jobs for its planned battery plant in Michigan which was under fire from lawmakers for using Chinese-supplied technology, Reuters reported.

The automaker said it would restart construction on the Marshall, Michigan plant after a two-month pause.

Ford plans to produce low-cost lithium-ion batteries starting in 2026 using technology licensed by Chinese battery maker CATL. Ford has agreed to allow the United Auto Workers to organize the plant’s employees without a vote.

Ford’s link to CATL has drawn criticism from congressional lawmakers who do not want US subsidies for electric vehicles flowing to China.

Republican Rep. Mike Gallagher, who chairs the House Select Committee on the Chinese Communist Party, said last week that Ford’s decision to continue working with CATL was disappointing.

Gallagher called on the company to “call off this unethical deal for good,” arguing that the American taxpayers “deserve better” from an automaker that is receiving “massive” federal subsidies.

Ford is seeking approval from the Treasury Department to qualify for subsidies from the so-called Inflation Reduction Act to produce batteries at the Michigan plant.

Mark Truby, a spokesman for the automaker, told reporters last week that Ford is “confident” the company will qualify for the subsidies.

While the construction on the battery plant will restart, Ford has scaled back the project, cutting the plant’s capacity to 20 gigawatt hours and reducing its workforce to 1,700.

The capital investment in the Michigan plant will also be reduced, Truby said. While the size of the reduction is unclear, Truby indicated that the reduced investment will be in line with a 40 percent reduction in the plant’s capacity. This suggests that the reduced investment will be around $2 billion.

General Motors also slowed investment in its electric vehicle capacity as the demand for EVs in the US has slowed.