Ford Puts EV Plans on Diet: $3.5 Billion Battery Factory in Michigan Shrinks by 40%

On November 21, 2023, Ford announced that it has resumed constructing its $3.5 billion electric car battery factory in Michigan, U.S. The company stated that it is scaling back its plans, adjusting some investment timings, and resizing the project. However, it added that it remains optimistic about its long-term strategy.

This decision reduces the production capacity by more than 40%. It is expected to produce about 20GWh, a significant difference from the initially anticipated 35GWh. Ford has also reduced its investment in this facility by $1.5 billion, cutting the expected number of jobs to 1,700.

Ford announced the construction of the factory in Marshall, Michigan, last February. It set the annual production volume of LFP batteries, equivalent to the capacity of 400,000 electric vehicles, at 35GWh from 2026. This accounts for 20% of Ford’s expected production of 2 million units. This has been reduced to an annual capacity of about 230,000 units.

Bloomberg reported that Ford said the demand for electric vehicles is not increasing at the expected pace.

Ford’s electric car factory in Michigan was supposed to receive batteries from a factory built in partnership with China’s CATL.

Ford recently reduced the production of the F-150 Lightning, produced at the Rouge electric vehicle factory, from three shifts to two.
It also delayed several investments, including Kentucky’s second Blue Oval SK joint venture battery factory. Ford has reduced its investment in electric vehicles to about $12 billion.

Ford’s electric pickup truck sales decreased by 46% in the third quarter. The company lost about $36,000 on all-electric vehicles sold during that quarter.