The joint venture plan to build a battery factory between Ford and Chinese battery manufacturer CATL in Michigan is facing significant risks, with about 2,000 jobs potentially at stake if Republican lawmakers in Congress cut tax credits in the economic package proposed by President Donald Trump.
The $3 billion factory, expected to produce 20 gigawatt-hours of lithium iron phosphate (LFP) batteries and hire 1,700 workers from 2026, is under construction but has faced political scrutiny since 2023 due to Ford licensing battery technology from Contemporary Amperex Technology Co. Ltd. (CATL) – the world's largest battery manufacturer from China.
Tax credit risks make Ford's joint venture battery factory plans precarious.
Lithium iron phosphate (LFP) batteries, with advantages of low cost, high thermal stability, and optimal durability, are the top choice for mainstream electric vehicles and are easily accessible to the market. This type of battery does not use expensive materials like nickel or cobalt, significantly reducing costs.
However, slower-than-expected growth in electric vehicle sales has forced Ford to scale back the BlueOval battery park in Marshall, Michigan, reducing funding to about $2.2 billion and cutting the workforce from 2,500 to 1,700 jobs.
Initially, this project was promised around $1 billion in incentive support, but this amount was later halved, increasing financial pressure even more.
Additionally, the close ties with CATL – suspected of being linked to the Chinese Communist Party – have made this project a focal point of controversy in U.S. politics.
Trump's 'Big Beautiful Law' policy package is currently at risk of cutting production tax credits, directly threatening Ford's battery factory construction.
Mr. Bill Ford, executive chairman of the group, has warned about the possibility of losing this tax credit.
He emphasized: 'We built our business model in Marshall based on those incentives. Politicians may agree or disagree, but the rules should not change after investments have been made – that would be unfair.'
Bill Ford is uncertain whether the tax credits can be protected, but if removed, the factory and thousands of jobs in Michigan will be at risk.
Not only does the existence of the factory affect the workforce, but it also significantly impacts the cost of electric vehicles. LFP batteries are the key to reducing the price of electric vehicles to compete with gasoline-powered cars – a decisive factor in expanding the consumption market.
The inability of the battery factory in Michigan to be completed will halt domestic LFP battery production, going against the goal of promoting the domestic battery supply chain of lawmakers.
Another Chinese battery manufacturer has also suspended its factory project in the United States.
The China-backed battery manufacturer, Automotive Energy Supply Corp. (AESC), once planned to build several EV battery factories in the United States to expand the supply chain.
The company has now suspended construction at its second factory, following the suspension of a project last year. AESC plans to invest $3.6 billion to build two facilities in Kentucky and South Carolina, but import tariffs on equipment from China of up to 145% have rapidly increased costs.
In addition, the rushed construction schedule has forced the company to make many costly changes, further delaying the project.
Currently, AESC has only one operational battery factory in Tennessee, but instead of focusing on electric vehicle battery production, it has been converted to produce industrial energy solutions.
Many experts believe this is a consequence of decreased demand for electric vehicles and regulatory policies in the United States that negatively affect the EV battery sector. Lowering emissions standards and adjusting green targets has somewhat diminished the attractiveness of new battery production projects.
Source: https://tintucbitcoin.com/ford-lo-ty-usd-pin-ev-do-thue-trump/
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