Ford Motor is facing an adjusted incentive package from Michigan for its battery plant in Marshall, as the company has slashed expected production to align with the demand for electric vehicles (EVs). The Dearborn-based automaker is constructing the facility to produce low-cost lithium-iron batteries with technology licensed from Contemporary Amperex Technology Co Ltd (CATL), a prominent Chinese battery manufacturer. The Michigan Strategic Fund has reduced the maximum incentive for Ford from $1.03 billion to $409 million.
In November of the previous year, Ford announced its decision to decrease battery production capacity at the plant from 35 gigawatt hours to 20 gigawatt hours. Additionally, the automaker reduced the number of employees working at the facility from 2,500 to 1,700. This strategic move was in response to lower-than-expected demand for EVs. Ford plans to commence battery production at the Marshall plant in 2026.
However, the plant has faced criticism from politicians due to its utilization of Chinese technology. Representative Mike Gallagher, who chairs the U.S. House committee on China, called for Ford to abandon the deal, deeming it “unethical” for a taxpayer-funded project to rely on such technology. Ford has defended its decision and emphasized that the plant will generate numerous employment opportunities in the United States.
Ford recently stated that it is adapting its manufacturing operations to align with changing customer demand for EVs. Tony Reinhart, Ford’s director of state and local government affairs, explained that the automaker is “nimbly adjusting” and the Michigan Strategic Fund is revising its incentive offers accordingly.
Michigan has also reduced incentives for another investment project announced by Ford in June 2022. This project was intended to create thousands of unionized jobs in the Midwest. However, Ford revised its plan in January, scaling back production at the F-150 Lightning electric pickup plant while adding a new shift to an assembly plant in Michigan that manufactures the popular gasoline-powered Bronco and Ranger vehicles. Consequently, Michigan withdrew a $100 million grant that was initially allocated for the Lightning plant.