Ford has halted work on an electric vehicle battery plant in Michigan.

Bill Ford, Executive Chairman of Ford Motor Company, announces the automaker's new BlueOval Battery Park on February 13, 2023, in Romulus, Michigan. Ford Motor Co. announced on Monday, Sept. 25, that it is halting building of a $3.5 billion electric vehicle battery plant in Michigan until it is sure that the factory can be managed competitively. image credit-morganton

More funds are being committed in Michigan for the creation of a $3.5 billion electric vehicle battery plant, following Ford Motor Co.'s announcement that construction would be halted until the company is confident it can run the factory competitively.

Ford announced the delay on Monday and is currently in the midst of national contract negotiations with the United Auto Workers union, which wants to represent battery factory workers and earn them higher salaries.

A Michigan economic development board approved on Tuesday to give an additional $65 million to the megasite for "assistance for site readiness activities," according to a board memo.

Ford EV Bttery Plant in Marshall, Michigan

 In February, Ford Motor Company announced plans to construct a $3.5 billion electric vehicle (EV) battery plant in Marshall, Michigan. The facility was set to open in 2026, employing 2,500 people.

Ford would have become the first carmaker to produce next-generation lithium, iron, and phosphate batteries in the United States. 

However, Ford has halted construction on the project. The corporation expressed concerns about its capacity to operate the plant competitively while still involved in larger contract negotiations. Ford is also up against: 

Striking autoworkers are putting financial pressure on the company.

Legislators are putting pressure on the company to cut links with a Chinese corporation that is working on the project.

Disputes with local citizens and Republicans in Congress over the deployment of Chinese technology

The factory was supposed to produce lower-cost batteries.

How many battery factories is Ford planning to build?

Ford is constructing three battery facilities in Kentucky and Tennessee. The plants will be built in collaboration with South Korean battery producer SK Innovation. 

 The US government loaned Ford $9.2 billion to finance the building. 

 The loan is the largest since the US auto bailout in 2009. 

Long-term lithium supply deals have also been signed by Ford with Albemarle, SQM, and Nemaska Lithium. Ford announced a deal in 2022 to purchase 7,000 tonnes of lithium per year from the Rhyolite Ridge mining operation in Nevada. The lithium is on its way to the Kentucky factory. 

Is Ford planning to licence battery technology from China's CATL in exchange for a $3.5 billion factory?

Ford has signed a licencing agreement with China's CATL to manufacture batteries in the United States. 

Yes, Ford has signed a licencing agreement with China's CATL to manufacture batteries in the United States. CATL is the world's largest battery manufacturer, and it dominates global LFP battery production. According to Ford, developing the technology would take years. 

The licencing agreement is being scrutinised by US politicians. They are requesting that Ford release a copy of the agreement as well as any correspondence between the two firms and the Biden administration over the deal. 

Ford has guaranteed legislators that CATL will not benefit from state tax breaks. Despite the fact that the batteries will not be used, they will be eligible for the full federal EV tax credit under the Inflation Reduction Act (IRA).

Ford has stopped work on the $3.5 billion factory.