Michigan has reduced its incentive package for Ford Motor’s Marshall battery plant following the automaker’s decision to lower expected production in alignment with subdued electric vehicle (EV) demand. Originally slated for a $1.03 billion incentive, the new package from the Michigan Strategic Fund now offers a maximum of $409 million.
Ford, headquartered in Dearborn, Michigan, plans to utilize technology licensed from China’s Contemporary Amperex Technology Co Ltd (CATL) at the Marshall facility to produce low-cost lithium-iron batteries. The company announced in November a reduction in battery production capacity from 35 gigawatt hours to 20 gigawatt hours, alongside a decrease in projected employment from 2,500 to 1,700.
Criticism has emerged from political quarters regarding the plant’s use of Chinese technology. Representative Mike Gallagher, chair of the U.S. House committee on China, previously called for the cancellation of Ford’s deal, citing concerns over taxpayer subsidies for the project.
Ford defended its stance, emphasizing the plant’s potential to generate numerous U.S. jobs despite the adjustments prompted by slower EV market growth. “We are nimbly adjusting our manufacturing operations to match evolving customer demand,” stated Tony Reinhart, Ford’s director of state and local government affairs.
In addition to revising incentives for the Marshall plant, Michigan also scaled back support for another Ford investment initiative announced in June 2022. This move follows Ford’s January revision of plans for its F-150 Lightning electric pickup plant and adjustments at its Michigan assembly plant producing gasoline-powered vehicles like the Bronco and Ranger.
Michigan withdrew a $100 million grant originally earmarked for the Lightning plant amidst broader adjustments in Ford’s EV investment strategy.
