Ford said Tuesday it is scaling back a planned $3.5 billion investment in an electric vehicle battery plant in Michigan. The news comes as U.S. automakers look to scale down their aggressive production targets for the vehicles amid slower-than-expected consumer demand.
Ford officials said they still plan to move forward with the construction of the Marshall, Michigan, EV battery factory and its planned opening in 2026, but the company noted they are “re-timing and resizing some investments.”
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That includes reducing the number of jobs at the plant from 2,500 to around 1,700, officials announced Tuesday.
Ford also said it will cut the facility’s planned battery production from 30 gigawatt hours per year down to 20 gigawatt hours.
“We looked at all the factors. Those included demand and the expected growth for EVs, our business plans, our product cycle plans, the affordability and business to make sure we can make a sustainable business out of this plant,” Ford Chief Communications Officer Mark Truby told reporters during a briefing Tuesday.
“We’re still very bullish on EVs and our EV strategy, but clearly, while there is growth, both in the U.S. and worldwide, clearly the growth isn’t at the rate that we and others had expected,” Truby said. “We’re trying to be smart about this and how we move forward.”
The news comes as Ford and other U.S. automakers have struggled to adjust for the lag between consumer enthusiasm and sales of the cars, which have fallen short of expectations and left automakers with factories and lots full of unsold EVs.
Would-be consumers, meanwhile, have cited concerns over cost, range, and availability of public charging infrastructure for EVs as some of the primary hurdles preventing them from making the switch.
Ford said in October that it will look to cut costs in that space by roughly $12 billion, including postponing construction of a planned battery factory in Kentucky.
Ford has also come under fire for its plans to produce lithium-ion batteries using technology licensed by the Chinese manufacturer CATL, sparking fierce objection from Republican lawmakers.
Rep. Mike Gallagher (R-WI), the Republican head of a House committee on China, said Tuesday that Ford’s announcement was “disappointing,” noting in a statement, “The American people deserve better from an iconic U.S. company that receives massive taxpayer subsidies.”
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“Ford needs to call off this unethical deal for good,” Gallagher added.
Ford shares fell by 1.5% Tuesday afternoon amid the news.
