Ford has revealed that it is reducing the amount of batteries it will produce at its new electric vehicle plant in response to declining consumer demand and growing labor expenses. The carmaker claims it will only be investing about $2 billion instead of the initial $3.5 billion to establish the Michigan plant, and it now only plans to hire 1,700 workers, down from 2,500.
In February, Ford had first revealed its ambitious proposal to build a battery plant in Michigan in collaboration with Contemporary Amperex Technology (CATL), a Chinese manufacturer of lithium iron phosphate (LFP) batteries. Now, the factory will only generate roughly 20 gigawatt-hours of batteries annually, a reduction of almost 43%.
Automakers must get at least 40 percent of their battery materials from North America or US trading partners by 2024 for EVs to be eligible for federal tax credits of up to $7,500. Republicans who oppose China have also targeted Ford because of its affiliation with CATL.
Despite recent production halts caused by the UAW labor union strike last month, the carmaker still intends to open the new site on schedule in 2026. Additionally, the corporation has postponed plans to construct its battery plant in Kentucky.