Ford has announced that it is immediately stopping construction at a $3.5 billion factory in Michigan, which was intended to produce cost-efficient lithium iron phosphate (LFP) batteries with the help of China’s CATL. The decision to pause work at the facility, known as BlueOval Battery Park Michigan, is due to concerns over the competitive viability of operating the plant. Ford spokesperson, TR Reid, stated that the company has not made a final decision on the project and has not specified the reasons for the pause.
Ford has halted construction at its $3.5 billion EV battery factory in Michigan due to concerns over its competitive viability. The project, in partnership with China’s CATL, aimed to produce cost-efficient LFP batteries. The pause in construction raises doubts about Ford’s commitment to its ambitious electric vehicle plans and the future of the factory.
CATL Partnership and Uncertain Future
The factory, which was initially announced in February 2023, was the result of a partnership between Ford and CATL. Under the agreement, Ford’s subsidiary would have utilized CATL’s knowledge and services to manufacture battery cells using LFP technology. However, it remains unclear whether the pause in construction is temporary or if the project will be abandoned altogether.
This development comes after Ford, GM, and Stellantis experienced a limited strike by United Autoworkers. Additionally, two congressional committees launched investigations into Ford’s licensing deal with CATL in July 2023. The pause in construction also casts doubt on Ford’s commitment to investing $50 billion in electric vehicles globally by 2026, with plans to produce 600,000 electric vehicles annually by the end of this year and 2 million by the end of 2026.
Implications for the Community and State Incentives
The factory was granted $1.7 billion in state incentives and was set to be located in Marshall, Michigan. Local residents opposing the project referred to it as the Marshall Megasite, while Ford named it BlueOval Battery Park Michigan. The facility was expected to employ 2,500 workers and commence production in 2026.
Michigan Governor, Gretchen Whitmer, played a crucial role in securing the incentives. In a statement, a spokesperson for the governor emphasized Michigan’s status as the home to world-class automakers and stressed the importance of creating jobs and bringing supply chains back to the state. The governor expressed hope for successful negotiations between the automotive industry’s “Big 3” and the United Autoworkers union, allowing workers to return to their jobs.