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Ford Halts $3.5 Billion Battery Factory in Michigan Amid Uncertainty

In a startling development, Ford has hit the brakes on a $3.5 billion factory in the heart of Michigan
September 27, 2023

In a surprising move, Ford has announced the immediate suspension of work at its $3.5 billion factory in Michigan. This facility was poised to play a pivotal role in the production of cost-effective lithium iron phosphate batteries, leveraging technology from China's CATL (Contemporary Amperex Technology Co. Limited).

Ford spokesperson TR Reid shared insights, stating, "We're pausing work and limiting spending on construction on the Marshall project until we're confident about our ability to competitively operate the plant. There are a number of considerations. We haven't been specific about what they are, nor made any final decision about the planned investment there."

The factory was part of Ford's ambitious plan to invest over $50 billion in electric vehicles globally by 2026. The automaker had set an ambitious goal of delivering an annual run rate of 600,000 electric vehicles worldwide by the end of this year and 2 million by the end of 2026.

However, this abrupt halt raises questions about the future of the project. It remains uncertain whether this suspension is temporary or if the entire venture will be shelved.

This decision comes on the heels of a limited strike initiated by the United Autoworkers, which had an impact on Ford, GM, and Stellantis. Additionally, in July 2023, two congressional committees launched investigations into Ford's licensing deal with CATL, adding to the uncertainty surrounding the project.

The factory, known as BlueOval Battery Park Michigan by Ford and the Marshall Megasite by local residents, had secured $1.7 billion in state incentives to establish its presence in Marshall, Michigan. At the time of the announcement, Ford envisioned employing 2,500 workers at the facility, with production slated to commence in 2026.

Michigan Governor Gretchen Whitmer, who played a pivotal role in securing the incentives, remains committed to the state's status as a hub for world-class automakers. A spokesperson emphasized the importance of supporting the workforce and encouraging supply chain localization.

The future of the project remains uncertain, and negotiations between major automakers and the United Autoworkers will be pivotal in determining the next steps. For now, the pause in construction underscores the challenges and complexities faced by automakers as they navigate the rapidly evolving landscape of electric vehicles.

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