Ford Motor said yesterday that it has resumed construction of its battery plant in Michigan, but the scale has been reduced from the original plan, on the grounds that demand for electric vehicles is expected to cool down in the future.
Ford paused construction of the battery plant in Marshall, Michigan, in September, saying at the time it was reassessing its competitiveness in operating the plant. At the time, a spokesperson said there were “multiple considerations” behind the decision.
The plant is intended to produce about 40% fewer cells than originally planned. The company now expects to employ about 1,700 workers at the plant, down from about 2,500 originally planned.
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In the past few years, electric vehicles outside China rarely used LFP batteries, but this situation
TR Reid, Ford’s director of corporate and public policy communications, told Manufacturing Dive that Ford has re-evaluated the plan to ensure the automaker can operate its plants economically. Those considerations include labor costs and government incentive programs, he said.
He also pointed out that the main consideration is the growth rate of customers buying electric vehicles. Although Ford’s electric vehicle sales rose 44% year-over-year in the third quarter, electric vehicle penetration has not occurred as quickly as companies including General Motors had previously expected. So Ford is adjusting accordingly. “We are optimistic about electric vehicles. Demand continues to grow strongly, albeit at a slower pace than expected.”
He said that all aspects will be scaled back, including the originally planned investment of US$3.5 billion (Note: currently about 24.99 billion RMB). The plant is expected to create 1,700 jobs and produce 20 GWh of batteries per year, compared to the previously announced 2,500 jobs and 35 GWh of annual production capacity.
While the company has significantly adjusted its economies of scale, its timeline remains unchanged and they expect the Marshall plant to begin producing lithium iron phosphate batteries in 2026.
