Ford Motor Company has announced that it is halting construction on its electric vehicle (EV) battery plant in Marshall, Michigan, which was supposed to use technology from China’s largest battery maker, Contemporary Amperex Technology Co. Limited (CATL). The decision comes amid criticism from Republican lawmakers over the company’s ties to China and a strike by United Auto Workers (UAW) that has affected the production of EVs.
Ford’s Plan to Build LFP Batteries in the US
Ford had unveiled its plan to build a $3.5 billion battery factory in Marshall, Michigan, in February 2023, as part of its $50 billion investment in EVs globally through 2026. The factory, dubbed BlueOval Battery Park Michigan, was expected to employ 2,500 workers and produce lithium iron phosphate (LFP) batteries, a cheaper and safer alternative to the commonly used lithium ion batteries. LFP batteries are also more suitable for commercial vehicles and entry-level EVs, which Ford aims to expand in the US market.
To manufacture LFP batteries, Ford had partnered with CATL, the world’s largest EV battery producer, which has developed some of the most advanced LFP battery technology. Under the agreement, Ford’s wholly owned subsidiary would own and operate the plant, while CATL would provide knowledge and services as a licensor of battery cell technology. Ford had also said that CATL would not receive any taxpayer funds or have any ownership stake in the plant.
GOP Criticism and Local Opposition to the Project
However, the project soon faced backlash from Republican lawmakers and local residents, who raised concerns over Ford’s reliance on Chinese technology and the potential environmental and social impacts of the plant. In July 2023, two congressional committees launched investigations into the deal, questioning whether Ford was violating the Inflation Reduction Act, which provides tax incentives for domestic production of batteries and EVs. The lawmakers also accused Ford of undermining US national security and economic interests by outsourcing critical technology to China.
Additionally, some residents of Marshall filed a lawsuit to stop the project, citing worries over the loss of farmland, the pollution of the Kalamazoo River, and the lack of transparency and public input in the process. They also expressed skepticism over the benefits of the project for the local community and the state of Michigan.
UAW Strike and Ford’s Pause on the Project
The opposition to the project coincided with a strike by UAW, which represents more than 100,000 workers at Ford, General Motors, and Stellantis. The strike, which began on September 18, 2023, was triggered by the automakers’ refusal to meet the union’s demands for higher wages, better benefits, and more job security. The strike has disrupted the production and supply of EVs and other vehicles, as well as the construction of battery plants and other facilities.
In light of these challenges, Ford announced on September 25, 2023, that it was pausing work and limiting spending on the Marshall project until it was confident about its ability to competitively operate the plant. The company did not provide a specific reason for the pause, nor did it indicate whether the project would resume or be canceled. Ford spokesperson TR Reid said in a statement, “We haven’t made any final decision about the planned investment there.”
The pause was welcomed by some Republican lawmakers, who saw it as a victory for US interests and a blow to the Chinese Communist Party. Rep. Lisa McClain of Michigan wrote on X, formerly known as Twitter, “Chinese technology has no place in our country and I am glad to see this battery plant be put on hold.” However, the pause also raised questions about Ford’s commitment to its EV strategy and its impact on the state of Michigan, which had offered $1.7 billion in incentives to secure the project. Gov. Gretchen Whitmer said in a statement that she was committed to maintaining Michigan’s status as the home to world-class automakers and workers, and that she would continue to push for successful negotiations between the Big 3 and UAW.