Ford Motor Company’s $3 billion electric vehicle (EV) battery plant in Marshall, Michigan, is facing significant uncertainty following the passage of a tax reform bill by the U.S. House of Representatives. The legislation proposes eliminating key federal tax credits for EV batteries that involve Chinese technology, a move that could directly impact the viability of Ford’s nearly completed facility. Executive Chair Bill Ford expressed concern that the removal of these incentives could jeopardize the project, which is already 60% built and expected to create 1,700 jobs.
The plant, announced in early 2023, is designed to produce battery cells using technology licensed from Chinese battery manufacturer CATL. “If it doesn’t stay, it will imperil what we do in Marshall,” Ford said at a recent policy conference, emphasizing that the company’s investment was made based on existing federal policies and that changing those rules midstream would be unfair.
The proposed legislation not only targets production tax credits for batteries with Chinese ties but also seeks to repeal the $7,500 consumer tax credit for new EV purchases. Additionally, it introduces a $250 annual fee on EVs to fund road maintenance and aims to roll back emissions regulations that encourage automakers to increase EV production.
Ford’s project has already seen reduced state level incentives due to scaled back production plans amid slowing EV demand, and it has drawn political scrutiny over its partnership with CATL. In response, more than 100 local business owners, educators, and elected officials from the Marshall area have signed a letter urging Congress to maintain the tax incentives, highlighting the region’s economic struggles and the plant’s potential to revitalize the local job market. The U.S. Senate is expected to review and potentially revise the bill in the coming weeks, setting the stage for a critical debate over the future of EV manufacturing policy in the United States.