Ford Motor Company’s US$3 billion EV battery plant in Marshall, Michigan, is now 60% complete.

The project is expected to qualify for US production tax credits.

The automaker confirmed compliance with updated regulations from a recently revised tax and budget bill.

The facility is projected to employ 1,700 workers upon completion.

It had previously faced uncertainty due to legislative discussions in May that considered excluding EV batteries using Chinese technology.

Ford said the project remains on schedule to meet the requirements aimed at boosting US manufacturing competitiveness.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ EV policy shift: Production incentives survive while consumer credits disappear

The Ford battery plant news highlights a significant transition in U.S. electric vehicle policy, where production incentives are being preserved while consumer tax credits are eliminated.

The upcoming budget bill will end the $7,500 tax credit for new EV purchases after September 30, 2025, while maintaining production tax credits for manufacturers like Ford 1.

This policy shift represents a change in approach: instead of subsidizing EV purchases, the focus is now on supporting domestic manufacturing capacity.

The elimination of consumer credits could significantly impact EV adoption, with analysis projecting a net decrease of 1.7 million EV sales (30%) by 2030 2.

Meanwhile, production tax credits, worth $35 per kWh for battery cells and $10 per kWh for modules, will continue supporting manufacturers, potentially providing Ford’s Michigan plant with substantial operational support 3.

This approach reflects the challenge of balancing reduced federal spending with maintaining U.S. manufacturing competitiveness, particularly in strategically important technologies.

2️⃣ Battery manufacturing emerges as the new battleground in U.S.-China technology competition

Ford’s $3 billion investment in Michigan battery production using Chinese CATL technology highlights the complex balancing act between securing American jobs and managing foreign technological dependence.

The plant was initially at risk of losing tax credits due to its reliance on Chinese battery technology, but revisions to the budget bill have addressed this concern, allowing the project to move forward while maintaining incentives 4.

This represents a compromise in America’s approach to EV supply chains, recognizing that completely severing ties with Chinese technology could significantly hamper domestic manufacturing ambitions.

The 2,500 jobs expected from the Marshall plant underscore the economic stakes of these policy decisions for local communities 3.

Since 2022, clean transportation investments have totaled $100 billion and created 80,000 jobs nationwide, demonstrating the sector’s growing economic importance despite policy uncertainty 5.

The continued support for the Ford plant suggests a recognition that domestic battery production capacity remains strategically crucial even as consumer incentives are scaled back.

3️⃣ The shifting economics of EV adoption amid policy volatility

The preservation of production credits amid the elimination of consumer incentives will reshape the economic equation for both manufacturers and consumers in the EV market.

Analysts project the policy changes could impose a societal cost of approximately $33 billion by 2030, with consumer welfare declining by about $27 billion as vehicle costs increase without offsetting tax credits 2.

The affordability gap between EVs (averaging $56,000) and gas vehicles (averaging $48,000) will likely widen further without the $7,500 tax credit that helped bridge this difference 6.

While manufacturer profits are expected to rise by $15 billion due to relaxed regulations, this comes at the expense of increased greenhouse gas emissions with environmental costs estimated at around $50 billion 2.

Ford’s continued investment in battery production despite these headwinds signals a long-term strategic commitment to electrification, even as it navigates short-term market and policy uncertainties.

The Marshall plant’s projected capacity of 20 gigawatt-hours per year represents significant production scale that could help drive down battery costs through economies of scale, potentially offsetting some impact of lost consumer incentives 4.

Recent Ford developments

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