Ford Scales Back Michigan Battery Plant Investments

Matt Posky
by Matt Posky

Ford has said it will restart construction on the electric vehicle battery facility it’s building in Marshall, Michigan, after pausing work when the UAW strike kicked off a couple months ago. But the company has also announced that it would be “re-timing and resizing some investments.”

From Ford:

While we remain bullish on our long-term strategy for electric vehicles, we are re-timing and resizing some investments. As stated previously, we have been evaluating BlueOval Battery Park Michigan in Marshall.
We are pleased to confirm we are moving ahead with the Marshall project, consistent with the Ford+ plan for growth and value creation. However, we are right-sizing as we balance investment, growth, and profitability. The facility will now create more than 1,700 good-paying American jobs to produce a planned capacity of approximately 20 GWh.
We still expect BlueOval Battery Park Michigan to be the first of Ford’s battery plants of this kind when it begins producing LFP battery cells starting in 2026.

Ford had originally announced that the Blue Oval Battery Park would result in 2,500 jobs. The new 20 GwH capacity also shaves a fifth off the company’s initial estimate. Mark Truby, chief communications officer for Ford, noted this would likewise result in the $3.5 billion investment shrinking to roughly $2.2 billion.

“We’ve been studying this project for the past couple of months, and I think we’re all aware that EV adoption is growing, and we expect that to continue actually, but it’s not growing at the pace that I think ourselves and the industry had expected,” Truby was quoted by Automotive News as saying during a press call.

While the facility was a big deal for Michigan residents wanting to see more domestic automotive jobs, it’s also become a contentious issue on the national stage. Ford’s battery manufacturing is supposed to be done by licensing technology from China’s Contemporary Amperex Technology Co (CATL) and the issue has raised questions about national security and whether or not subsequent Ford products would be eligible for federal tax credits that are now tied to regional content requirements.

Though Ford has said its primary concerns stem from demand. It’s a claim one might be inclined to agree with if they’ve been following the market.

With so much government pressure to build EVs and assumptions that they would ultimately become more profitable than combustion vehicles, legacy manufacturers were eager to follow Tesla into the land of profitable electrification.

However, the public doesn’t appear sufficiently interested and the relevant technologies aren’t yet up to par. Tesla has remained the exception, rather than the rule. Meanwhile, EVs continue to be priced much higher than their combustion counterparts with demand being isolated primarily to metropolitan hubs and the wealthier surrounding suburbs. Segment growth is slowing and the industry is starting to act a little more cautious as the novelty of electric cars begins to wear off.

Dealers don’t seem to be particularly enthusiastic about electrification anymore either. Numerous brands (including Ford) have tied EV allocations to costly renovations that include on-site charging stations. The vehicles themselves are getting harder to move — something literally every dealer source I have has expressed to me this year. But we don’t technically need them to tell us, as the data speaks for itself. Both electric and combustion vehicles went into 2023 with a roughly 50-day supply. While that has remained more-or-less the case for gas-powered automobiles, the supply of battery vehicles has nearly doubled through October.

With the above in mind, Ford has likewise opted to scale back its electric vehicle certification program intended for dealers. The explanation given was that the Blue Oval needed to “adapt [its] overall EV strategy to the market and listen to dealer feedback.”

For specifics on the tweaked certification plan, check out Matthew Guy’s article covering the topic or some of our earlier pieces examining the legal issues surrounding the matter.

Expect to see media outlets bashing Ford for scaling back EV investments in the near term. You’ll also probably notice the stock market reacting unfavorably to the news for a time. In fact we saw the brand’s valuation slip a bit almost immediately after the two announcements were made. But Ford actually seems to be making the correct choice for itself here, even if Wall Street is blind to the fact. The automaker’s electric vehicle division is projected to lose $4.5 billion by the end of 2023 and wastes an estimated $36,000 on every EV it currently sells.

Investors have been on an impulsive tech binge for far too long and the fact remains that most automakers pressing forward with electrification haven’t seen great returns on their investment. As unfortunate as it is to see Blue Oval Battery Park being scaled back, it’s probably the correct move for the company to make at this juncture. Pragmatism may not be the best way to pump up the share price and tempt today's overeager investors. But it’s undoubtedly wiser than sticking with an existing plan that doesn’t seem to be working out for the broader industry.

[Image: Ford Motor Co.]

Become a TTAC insider. Get the latest news, features, TTAC takes, and everything else that gets to the truth about cars first by  subscribing to our newsletter.

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

More by Matt Posky

Join the conversation
2 of 53 comments
  • Michael S6 Recently drove a CX-90 rental for a week in Florida. As compared to my wife's 11 year old Buick Enclave is was surprisingly noisy, underpowered, and harsher riding. Although sinking with iPhone was easy initially, I could not get Apple CarPlay to work after the first connection. Good points are handling, gas millage, seat comfort, and a nice interior but not on par with luxury SUV. This is not going to sell well (either CX-70,90) which explains the recent price cut.
  • 3SpeedAutomatic Home charging is the only way to make any EV practical!!⚡️⚡️⚡️The morning ritual of letting the dog out and the cat in, drink a cup of java, unplug your EV and off to work or Target you go. The same type of fussing for failing to put the garbage out as for failing to plug the EV in before going to bed. Only 150+ miles is short of the mark. Two hundred and more folks will bite the bullet, claim the tax credit, and use it to fund a home charger. Not sure my 1968 fuse box has enough spare amps since my home was built with all gas appliances and originally had screw in fuses. Its been rebuilt with circuit breakers, but still don't know if it has enough spare capacity.
  • Redapple2 PIG up trucks. Hate them a lot. 70% of owners never haul nothin. And even if you are going 5-8 MPH over the limit, they are on your azz pushing you out of the way.15.5 mpg is shameful. A crime. Burning oil:-pollutes-enriches non friends/enemies.-uses a limited/finite resource. Shame our govt is too busy inventing never before used tactics to imprison a candidate rather than use solid methods to reduce oil consumption. Gas Tax. When i first got my license gas was $0.60/gallon. Adjusted for inflation today, it is $3.39. This is a rank obscenity. Nobody else gives 1 f*&k.15 miles per gallon ! Gas is cheaper than it was in 1975. I could PUKE.
  • Grant P Farrell Driving a car once is nice but doesn't give a helpful perspective to an actual prospective buyer. I've put 18,000mi on my 2024 Prius XLE. It's a comfortable ride in terms of suspension and seat cushion. The adaptive cruise control works pretty well but you have to "steer" every 11 seconds or it shuts off for some period of time. The gas mileage is the same as my old 2012 Prius so nothing to write home about there. There are two issues that would keep me from buying this car over again though. First the paint seems incredibly thin, I don't know how else to explain it but I've taken on more scratches in 18,000mi than all my previous cars combined, seriously. Second is Android Auto, I constantly get "connection timeout". This means you get a white screen and lose connection to music and map, and best case it takes 3-4 aggravating minutes to re-establish connection to your phone and get everything working again. Problem is this has happened more than once when I needed directions and because I lost connection I took wrong turns and missed exits. Also annoying with Android Auto is it doesn't always turn on when I get into the car despite having that setting turned on. My dealership eventually ordered me a new ECU which took 2 months to come in from wherever, supposedly. I have no proof that a new computer was or was not installed but I'm having all the same issues. Bottom line I would not buy this car again.
  • Sobhuza Trooper I've tried to post a couple comments, each going straight to the bit bucket.What's up with that? All have been suitable for work.