Michigan Walks Back State Support For Ford Battery Plant

Ford Motor Company will receive a reduced incentive package from the state of Michigan for its upcoming battery plant in Marshall after adjusting its production expectations to align with the current demand for electric vehicles.

Initially, Ford was scheduled to receive up to $1.03 billion in incentives from the Michigan Strategic Fund, but this has now been slashed to $409 million. The automaker is constructing the plant and licensing technology from China's Contemporary Amperex Technology Co Ltd (CATL) to produce affordable batteries. The plant is expected to come online in 2026.

The reduction in funds follows Ford's November announcement to scale back the plant's projected battery production capacity from 35 gigawatt hours to 20 gigawatt hours–the expected number of employees has also been reduced from 2,500 to 1,700. Ford's decision-making is fuelled by lower-than-anticipated demand for EVs, which is absolutely hammering company finances, and forcing the brand to adjust several of its marquee EV plans.

The plant has faced political scrutiny, particularly concerning the use of Chinese technology. Representative Mike Gallagher, a Republican who chairs the U.S. House committee on China, urged Ford to abandon the deal, labeling it "unethical" for the automaker to benefit from taxpayer subsidies for the project. Ford has dismissed these criticisms, emphasizing that the plant will generate thousands of jobs in America. Ford has now halved the number of jobs available at the battery plant in Marshall.

Additionally, Michigan has reduced incentives for another Ford investment project announced in June 2022, which aimed to create thousands of new unionized jobs in the Midwest. The revised plan includes scaling back production at the F-150 Lightning electric pickup plant and adding a new shift at an assembly plant in Michigan for the Bronco and Ranger gasoline-powered vehicles. Consequently, Michigan retracted a $100 million grant for the Lightning plant.

This article was co-written using AI and was then heavily edited and optimized by our editorial team.

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