Ford Scales Back Capacity Of New Battery Plant By 42%

Ford is reneging on its ambitious plans to open a battery plant near Marshall, Michigan, a company spokesman said, scaling back both its investments in the EV battery facility and jobs as EV adoption is slower than expected.

Ford will reduce its commitment to the battery plant by more than $1 billion and 800 jobs, reducing the planned capacity of the plant by 42%. While the plans have been scaled back considerably, Ford still plans to open the new plant by 2026.

“We’ve been studying this project for the past couple of months. I think we’re all aware EV adoption is growing, and we expect that to continue, actually. But it’s not growing at the pace that I think ourselves and the industry had expected,” Ford spokesman Mark Truby said on Tuesday.

Truby added that Ford was aiming for discipline in how it allocates capital as it tries to balance future capacity with anticipated demand.

The plant was originally designed to produced 35 GW hours worth of batteries every year—sufficient enough to produce 400,000 vehicles. The plan will now to scaled back to produce just 20 GW hours, or enough for 230,000 vehicle batteries.

Ford did not quantify the capital outlay that will be shaved off the top, but a 42% reduction in investment for the plant equates to a $1.5 billion haircut, bringing the total investment down to $2B.

Michigan Governor Gretchen Whitmer highlighted the deal for the new battery plant back in February and signed a $1.3 billion spending package in early March that earmarked $630 million to support site preparation in Marshall—half of which was to go to land development and half to road improvements. This was on top of a $210 million grant to Ford and a $772 million tax break to the automaker, not to mention a $36 million loan to the Marshall Area Economic Development Alliance.

“Today’s generational investment by an iconic American company will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification. Let’s continue bringing the supply chain of electric vehicles, chips, and batteries home while creating thousands of good-paying jobs and revitalizing every region of our state. Since I took office, we’ve secured over 30,000 auto jobs and landed multiple electric vehicle and chip-making factories. We’re on the move, so let’s keep our foot on the accelerator,” Whitmer said in a February press release.

Ford, however, is looking to take the foot off the accelerator and allow demand to catch up.

By Julianne Geiger for Oilprice.com

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