Ford Motor is pushing ahead with its Michigan battery plant, but will now reduce the workforce from 2,500 to 1,700 when it opens in 2026.
The automaker cites poor outlook for electric vehicle (EV) demand as the reason for the scale-down.
The project, paused in September for reassessment, will now produce approximately 40 percent fewer batteries than initially planned.
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Ford cited a slower-than-expected growth rate in the EV market, prompting a decrease in the project’s size and investment, estimated initially at $3.5 billion.
The factory in Marshall, Michigan, also faces political scrutiny for its collaboration with China’s Contemporary Amperex Technology Co. (CATL), the world’s largest battery maker.
Congressional Republicans expressed concerns about federal tax subsidies benefiting a project with ties to China.
Investigations into the licensing deal have been initiated.
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While many Michigan Democrats supported the initiative for its job creation potential, political challenges persist.
Ford’s decision to use a different battery chemistry, lithium-iron-phosphate (LFP), in the Michigan plant is seen as an effort to enhance affordability.Â
LFP is commonly used in China and is more cost-effective than the chemistry predominant in North America.
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The automaker believes that employing LFP batteries will enable it to offer more competitive prices for EVs.
The company expects it to align with the industry’s broader push to make electric vehicles more accessible to consumers.
Ford’s strategy involves diversifying its battery technologies, with plans to build three other battery factories using a different chemical mix in Tennessee and Kentucky.
