Ford Motor announced on Tuesday that it would scale back investment, capacity, and job numbers for an electric-vehicle (EV) battery plant in Michigan. The decision comes amid criticism from U.S. lawmakers regarding the use of technology supplied by Chinese battery maker CATL.
The automaker plans to resume construction of the Michigan factory, initially paused two months ago, with the goal of producing low-cost lithium-iron batteries by 2026.The technology will be licensed from CATL, and Ford will maintain ownership of the factory. The United Auto Workers will have the opportunity to organize plant workers without a formal vote.
The controversy surrounding Ford’s association with CATL has prompted concerns among U.S. lawmakers, including Representative Mike Gallagher, who chairs the House committee on China. He expressed disappointment, stating that Ford, as a major recipient of taxpayer subsidies, should reconsider its dealings with the Chinese entity.
Ford is seeking U.S. Treasury Department approval for lithium-iron batteries produced at the Michigan plant to qualify for Inflation Reduction Act EV subsidies. The company is confident in obtaining these benefits, according to Ford spokesman Mark Truby.
To align with current economic conditions, Ford is revising its initial plans to invest $3.5 billion in the Blue Oval Battery Park Michigan. The adjusted capacity will now be 20 gigawatt hours annually, with a reduced workforce of 1,700 jobs, down from the initially proposed 35 gigawatt hours and 2,500 jobs.
General Motors, facing a similar economic landscape, has also slowed investment in new EV capacity for North America due to rising interest rates affecting demand growth. Ford’s decision led to a 1.5% drop in its shares, while GM and Stellantis experienced declines of 2.2% and 2.1%, respectively, in New York trading on Tuesday.
Acknowledging higher labor costs under recently ratified contracts with the United Auto Workers, Ford indicated a proportional reduction in capital investment, estimated to be around $2 billion following a 40% capacity reduction.
In October, Ford had already announced a $12 billion cut in overall future EV investments compared to previous plans, delaying construction of battery factories in Kentucky and Turkey.
The automaker plans to resume construction of the Michigan factory, initially paused two months ago, with the goal of producing low-cost lithium-iron batteries by 2026.The technology will be licensed from CATL, and Ford will maintain ownership of the factory. The United Auto Workers will have the opportunity to organize plant workers without a formal vote.
The controversy surrounding Ford’s association with CATL has prompted concerns among U.S. lawmakers, including Representative Mike Gallagher, who chairs the House committee on China. He expressed disappointment, stating that Ford, as a major recipient of taxpayer subsidies, should reconsider its dealings with the Chinese entity.
Ford is seeking U.S. Treasury Department approval for lithium-iron batteries produced at the Michigan plant to qualify for Inflation Reduction Act EV subsidies. The company is confident in obtaining these benefits, according to Ford spokesman Mark Truby.
To align with current economic conditions, Ford is revising its initial plans to invest $3.5 billion in the Blue Oval Battery Park Michigan. The adjusted capacity will now be 20 gigawatt hours annually, with a reduced workforce of 1,700 jobs, down from the initially proposed 35 gigawatt hours and 2,500 jobs.
General Motors, facing a similar economic landscape, has also slowed investment in new EV capacity for North America due to rising interest rates affecting demand growth. Ford’s decision led to a 1.5% drop in its shares, while GM and Stellantis experienced declines of 2.2% and 2.1%, respectively, in New York trading on Tuesday.
Acknowledging higher labor costs under recently ratified contracts with the United Auto Workers, Ford indicated a proportional reduction in capital investment, estimated to be around $2 billion following a 40% capacity reduction.
In October, Ford had already announced a $12 billion cut in overall future EV investments compared to previous plans, delaying construction of battery factories in Kentucky and Turkey.
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