Ford halts work on $3.5B EV battery factory with China’s CATL

Ford confirmed Monday it has immediately stopped work at a $3.5 billion factory in Michigan that was supposed to make cheaper lithium iron phosphate batteries using tech from China’s CATL.

“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,” Ford spokesperson TR Reid said in an email to TechCrunch. “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.”

Under the arrangement that was announced in February 2023, Ford’s wholly owned subsidiary would manufacture the battery cells using LFP battery cell knowledge and services provided by CATL. It’s unclear if this is a temporary pause or if the project will be shelved altogether.

The stoppage comes more than a week after United Autoworkers launched a limited strike affecting Ford, GM and Stellantis. It also follows an announcement in July 2023 that two congressional committees had launched investigations into the automaker’s licensing deal with CATL.

The $3.5 billion Ford had initially committed to investing in the factory was supposed to be part of the automaker’s plan to pour more than $50 billion into electric vehicles globally through 2026. Ford said it planned to deliver an annual run rate of 600,000 electric vehicles globally by the end of this year and 2 million globally by the end of 2026.

The factory — dubbed BlueOval Battery Park Michigan by Ford and the Marshall Megasite by local residents who opposed the project — garnered $1.7 billion in state incentives to locate in Marshall, Michigan. Ford said at the time the factory would employ 2,500 workers and production was expected to begin in 2026.

Gov. Gretchen Whitmer was instrumental in securing the incentives package. In an emailed statement a spokesperson wrote that the governor is committed to maintaining Michigan’s status as the “home to world-class automakers whose iconic vehicles are built by the best auto workers in the world.”

“That’s why we’ve been aggressively pursuing deals that support working men and women, while also bringing supply chains back home from overseas for the first time and securing record-breaking investment that will guarantee jobs for decades,” the statement continued. “Ford has been clear that this is a pause, and we will continue to push for successful negotiations between the Big 3 and UAW so that Michiganders can get back to work doing what they do best.”

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