Ford Motor Co. will restart construction on the electric vehicle battery plant it halted in Marshall two months ago, but it will be substantially smaller than originally planned, the automaker said Tuesday.

The project is now expected to create 1,700 jobs, a 32% reduction from the 2,500 announced previously. Planned capacity of the lithium iron phosphate battery plant is being slashed by more than 40% to just 20 gigawatt hours. Total investment in the plant will likely be reduced by the same measure — from $3.5 billion to roughly $2.2 billion – said Mark Truby, chief communications officer for Ford.
Production of the LFP batteries, which the Dearborn-based automaker is manufacturing by licensing technology from Chinese giant CATL, is still anticipated to begin in 2026.“We’ve been studying this project for the past couple of months, and I think we’re all aware that EV adoption is growing, and we expect that to continue actually, but it’s not growing at the pace that I think ourselves and the industry had expected,” Truby said on a call with reporters.

The announcement comes on the heels of the United Auto Workers ratifying its contract with Ford, saddling the company with higher labor costs as it navigates the pricey transition to EVs. Ford said a month ago that it would delay construction on one of its mammoth battery plants in Kentucky as it reconsiders $12 billion in EV-related capital expenditures and looks to drive down costs generally throughout the business.

Local and state officials had expressed confidence that the project would move forward after the company emerged from a six-week strike, but Ford let on that there could be more at play than the UAW dispute. The battery plant's ties to CATL have raised not only political controversy but also questions of whether it would be eligible for lucrative federal tax credits. Truby pointed to demand as the primary factor in its decision to downsize the Marshall project. He said Ford can handle the higher wage structure should the UAW successfully organize the plant and bring it under the master agreement, and that the company expects to benefit from IRA tax credits despite political opposition to CATL’s involvement.

“We want to be really disciplined about how we allocate capital and think about matching production and future capacity based on demand,” he said, adding that the plant could eventually increase in size if demand grows.
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