Ford Motor said on Tuesday that its $3 billion electric vehicle battery plant in Marshall, Michigan is on track to qualify for U.S. production tax credits under recently revised federal legislation, despite earlier concerns over its use of Chinese technology.
The automaker said the facility, which is 60% complete and expected to employ 1,700 workers, will begin production in 2026. “The Marshall, Michigan plant is on track to qualify for the production tax credit — a win for our customers and a win for American competitiveness,” the company said in a statement.
Ford’s announcement follows earlier warnings in May that the plant could lose access to federal incentives due to language in a previous version of a House tax and budget bill. That version would have barred production tax credits for batteries made with technology or components from certain Chinese companies.
The plant will manufacture battery cells using technology from Chinese battery supplier CATL, raising concerns among some lawmakers about foreign influence in U.S. energy infrastructure. The state of Michigan also scaled back its incentive package last year after Ford reduced its projected production output in response to slowing EV demand.
The final legislation, passed by Congress, revised the criteria for the battery production tax credit, excluding direct eligibility for Chinese companies while still allowing U.S. firms like Ford to qualify. The Alliance for Automobile Manufacturers, which represents major automakers including Ford, General Motors, Toyota, and Volkswagen, praised the revised bill for balancing national security concerns with domestic industry support.
The broader tax and budget package includes sweeping changes to EV incentives. It terminates the $7,500 federal tax credit for new EV purchases and the $4,000 credit for used EVs at the end of September. The legislation also eliminates penalties for automakers that fail to meet Corporate Average Fuel Economy (CAFE) standards, a shift expected to ease compliance pressure for companies continuing to produce gasoline-powered vehicles.
Despite regulatory uncertainty and fluctuating EV demand, Ford’s progress on the Michigan facility underscores the company’s longer-term commitment to domestic battery production. The plant remains a key part of Ford’s strategy to scale up its EV manufacturing capabilities in North America.