U.S. automaker Ford Motor Company is dramatically scaling back an electric vehicle (EV) battery plant under construction in Michigan as its EV business continues to lose billions of dollars.
In an announcement Tuesday, Ford said it would resume the Marshall, Michigan, project, but reduce its scope by more than 40% and the number of jobs it is projected to create by more than 30%. Ford, which has struggled to make a profit from its ongoing shift to EVs as sales decline and costs soar, added that it remained confident in the future viability of its EV business.
“While we remain bullish on our long-term strategy for electric vehicles, we are re-timing and resizing some investments,” Ford said in a statement Tuesday. “As stated previously, we have been evaluating BlueOval Battery Park Michigan in Marshall.”
“We are pleased to confirm we are moving ahead with the Marshall project, consistent with the Ford+ plan for growth and value creation,” it continued. “However, we are right-sizing as we balance investment, growth, and profitability. The facility will now create more than 1,700 good-paying American jobs to produce a planned capacity of approximately 20 GWh.”
Ford CEO Jim Farley announces at a press conference that his company will be partnering with China-based company Contemporary Amperex Technology to construct an electric-vehicle battery plant in Marshall, Michigan, on Feb. 13. (Bill Pugliano/Getty Images)
The automaker added that the facility is still expected to be Ford’s first battery plant of its kind to enter operations when it is scheduled to open in 2026. The plant will, once it is operational, manufacture lithium iron phosphate batteries common in EVs.
Ford’s decision to decrease the size of the factory comes less than a year after it first announced the project alongside Democratic Michigan Gov. Gretchen Whitmer. Ford pledged in February to invest $3.5 billion in the factory, create 2,500 “good-paying jobs” and have a gigawatt capacity of 35 gigawatt hours.
“Today’s generational investment by an iconic American company will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification,” Whitmer said at the time. “Let’s continue bringing the supply chain of electric vehicles, chips and batteries home while creating thousands of good-paying jobs and revitalizing every region of our state.”
The Whitmer administration also agreed to help fund the project with nearly $2 billion in direct subsidies and tax breaks. It is unclear if the state will lower its subsidy levels for the project in light of Tuesday’s announcement. Whitmer’s office didn’t respond to a request for comment.
The bad deal the governor and Democrats negotiated for Michigan taxpayers just got a whole lot worse,” Michigan state House Republican Leader Matt Hall said in a statement. “Even with Democrats’ premature push for electric vehicles and $1.8 billion in state incentives, Ford is cutting back the project and slashing job creation because most people just won’t buy unaffordable, inconvenient EVs.”