Ford Motor Co. has halted its plans to construct a $3.5 billion electric vehicle (EV) battery plant in Marshall, Michigan, that would use Chinese technology.
The decision was made due to various factors, although specific details were not disclosed. Ford’s spokesperson, T.R. Reid, stated that construction on the Marshall project has been put on hold until the company can ensure competitive operation of the plant.
The ongoing strike by the United Auto Workers likely influenced this decision. According to E&E News, President Biden is scheduled to join striking workers near Detroit on September 26.
The announcement by Ford drew criticism from the UAW’s president, Shawn Fain. Fain accused Ford of plotting job cuts and disregarding demands for higher wages and benefits.
The history of the Marshall battery plant
Governor Gretchen Whitmer’s spokesperson emphasized that Ford’s suspension of work is temporary. Efforts are being made to support workers and bring supply chains back to the United States. In February, Gov. Whitmer partnered with Ford and China-based CATL to announce the Marshall facility.
Ford previously stated that it would establish a new subsidiary called BlueOval Battery Park Michigan. This subsidiary would construct and own a large facility in Marshall, approximately 100 miles west of Detroit.
When the announcement was made, the UAW expressed its support for the plant. The UAW highlighted its belief that the plant would benefit the community and uphold strong wage and benefit standards within the automotive industry.
The facility would produce nickel cobalt manganese and lithium iron phosphate (LFP) batteries. It was scheduled to begin operations in 2026.
CATL would retain ownership of the battery cell technology and provide certain additional services through a contractual agreement.
However, the project has faced inquiries from lawmakers due to concerns about Chinese influence. House Republicans recently initiated an investigation into the arrangement between Ford and CATL. They demanded that Ford CEO James Farley provide a copy of the agreement that he signed with CATL.
Ford officials have consistently emphasized that a Ford subsidiary would be responsible for constructing, owning, and operating the plant. Ford has asserted that no other entity involved in the project would receive any US tax funding.
CATL has been a leader in EV battery technology. In August, the company announced a battery that provided 249 miles (400 kilometers) of range after just 10 minutes of charging.
Republicans have welcomed Ford’s halting of the Marshall plant. Meanwhile, Democrats have shown public support for unions.
No immediate response has been received from CATL or the White House regarding Ford’s announcement.
Tesla is happy
As Ford shuts down its Michigan EV battery plant, it’s giving a gift to Tesla.
Analysts were already predicting that Ford would raise the prices of its EVs due to the financial losses caused by the strike. With Ford now falling behind in battery technology, Tesla’s competitive advantage over Ford just got even greater.
Tesla is not impacted by the UAW strike, as its workforce is nonunionized.
Image Sources: John Solomon and Just the News, https://shorturl.at/bEV19