Six months after Ford Motor Co. revealed plans to build a $3.5 billion EV battery plant in Marshall, Michigan, the project ground to a halt with the automaker citing concerns about being run it at a profit.
“There are a number of considerations” behind the decision, among other things, questions about whether it can operate the plant at a profit. Already under fire due to the role that will be played by Chinese battery manufacturer CATL, many local residents in Marshall pushed back against the project which would take over a 950-acre wooded site.
Not surprisingly, the decision generated immediate fire from the United Auto Workers President Shawn Fain, who called the move “a shameful threat.” The UAW and Ford are in the midst of talks and a strike which is now 12 days into against Ford as well as General Motors and Stellantis.
Part of the plan
Each of the Detroit automakers is in the midst of rolling out plans to build EVs and the batteries that power them in a number of plants. The push to build the plants in the U.S. comes as a result of the federal regulations and mandates to secure as much as $7,500 in tax credits.
In Ford’s case, it has sites in Georgia and Tennessee under construction with the Michigan location being the most recent addition to the company’s plans. Ford is steadily shifting over to EVs, having already launched the F-150 Lightning pickup and the Mustang Mach-E SUV.
The new plant was designed to help the automaker meet expected demand by not only producing more batteries, but a different type of battery.
Currently, the automaker uses lithium-ion batteries delivering more than 300 miles per charge, in some cases. But they are expensive, so Ford is going to try to tempt buyers with an alternative battery chemistry called lithium iron phosphate. LFP batteries are cheaper, though they do sacrifice some range.
Ford partnered with CATL, the world’s largest battery manufacturer, to help it develop those types of batteries, which it already provides to Tesla, and many of the major Chinese EV brands.