Ford Halts Construction At $3.5-Billion EV Battery Plant In Michigan

Ford Motor Company has announced it is halting construction works at a planned $3.5-billion EV battery factory in Michigan until it is confident the plant can be run competitively.

Ford’s announcement comes amid a strike by the United Auto Workers (UAW) union and concerns in Congress over the alliance of one of Detroit’s Big Three with the biggest Chinese and global battery maker, Contemporary Amperex Technology Co., Limited (CATL).

In February this year, Ford said it had picked Marshall, Michigan, to invest $3.5 billion to build the country’s first automaker-backed lithium-iron-phosphate (LFP) battery plant.

Under the arrangement, Ford’s wholly-owned subsidiary would manufacture the battery cells using LFP battery cell knowledge and services provided by CATL, Ford said at the time.

In July, Mike Gallagher (R-WI) of the Select Committee on the Chinese Communist Party and Chairman Jason Smith of the Committee on Ways and Means requested that Ford provide copies of the licensing agreements with the Chinese company and any communications between Ford and the Biden Administration referring or relating to the Ford/CATL licensing agreement and/or achievable tax credits.

“Rather than developing American technology, we are concerned that the deal could simply facilitate the partial onshoring of PRC-controlled battery technology, raw materials, and employees while collecting tax credits and flowing funds back to CATL through the licensing agreement,” the lawmakers said in a letter to Ford president and CEO Jim Farley in July.

On Monday, Ford said it was “pausing work and limiting spending on construction on the Marshall project until we're confident about our ability to competitively operate the plant,” without elaborating on a specific reason for doing so. 

“We haven't made any final decision about the planned investment there,” the carmaker said as quoted by Reuters.

UAW President Shawn Fain described Ford’s announcement as “a shameful, barely-veiled threat by Ford to cut jobs.”

“Closing 65 plants over the last 20 years wasn’t enough for the Big Three, now they want to threaten us with closing plants that aren’t even open yet. We are simply asking for a just transition to electric vehicles and Ford is instead doubling down on their race to the bottom,” Fain added.

By Tsvetana Paraskova for Oilprice.com

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