Ford Pulls The Plug On Electric Vehicle Spending!
The American automaker, Ford Motor Company, is facing yet another setback in its electric vehicle (EV) business as it announced plans to significantly scale back a battery plant being built in Michigan. The company is struggling to turn a profit in its EV division and is facing intense criticism and scrutiny over its partnership with a Chinese battery manufacturer.
On Tuesday, Ford confirmed that it would resume the construction of its electric battery plant in Marshall, Michigan, but with a reduced size and projected job creation. The company had initially announced plans to invest $3.5 billion in the project, creating 2,500 jobs and a gigawatt capacity of 35 gigawatt hours. However, Ford now plans to reduce the plant’s size by over 40% and job creation by more than 30%, creating only 1,700 jobs and a capacity of 20 GWh.
“This decision is a result of our efforts to balance investment, growth, and profitability while remaining committed to our long-term strategy for electric vehicles,” Ford said in a statement.
The company’s struggles in its EV business were further highlighted in its recent third-quarter report, where it reported a loss of $1.3 billion in its EV division. This equates to a loss of $62,016 per EV sold in that period. Despite higher revenues, Ford projected a staggering loss of $4.5 billion in 2023 alone for its EV division.
More EV troubles:
With consumer EV demand below expectations, Ford scales back EV battery plant plans. 800 jobs evaporate.
— Steve Milloy (@JunkScience) November 21, 2023
Ford’s decision to scale back the battery plant is also a blow to President Biden’s green energy agenda, which includes policies to promote the growth of the EV industry. The President’s goal of ensuring half of all U.S. car purchases are zero-carbon by 2030 now faces another hurdle.
The announcement also comes amidst widespread criticism and congressional scrutiny over Ford’s partnership with Chinese battery manufacturer, Contemporary Amperex Technology (CATL). The company had announced its agreement with CATL to manufacture battery cells at the Marshall plant in February.
Republicans and national security experts raised concerns over this partnership, citing CATL’s ties to the Chinese Communist Party (CCP). While not state-owned, CATL has had financial investments from Chinese individuals tied to the CCP. The CPPCC National Committee, led by the CCP’s Politburo Standing Committee, also highlighted CATL’s contribution to China’s strategic control over lithium supply chains.
In September, a group of House Republicans wrote to Ford CEO Jim Farley expressing concerns over the project, stating that it could “jeopardize national security by furthering dependence on China.” They also warned about the risks of China gaining control over domestic EV production, especially given the current geopolitical tensions between the two countries.
The news of Ford’s scaled-back battery plant has sparked renewed criticism and calls for the company to reconsider its partnership with CATL. Michigan state House Republican Leader Matt Hall called the deal “a disaster” and urged Governor Gretchen Whitmer to right-size state funding, stating that taxpayers should not be on the hook for her failure.
Ford’s decision to cut back on its electric battery plant is a significant blow to the company’s efforts to transition to EVs and a setback for President Biden’s green energy agenda. With ongoing scrutiny and criticism over its partnership with a Chinese battery manufacturer, the future of Ford’s EV business remains uncertain.