Ford's Marshall EV Battery Plant Back On Track For 2026 Production

Ford Motor Co. has announced that its $3 billion electric vehicle (EV) battery plant in Marshall, Michigan, is back on track and expected to qualify for valuable federal production tax credits. The plant, which was initially announced in February 2023, is set to create 1,700 jobs in the region and is currently 60% complete, with production scheduled to begin in 2026. The facility will manufacture lithium iron phosphate (LFP) battery cells using technology licensed from CATL, the world’s largest EV battery maker.

The future of the Marshall facility was uncertain due to its partnership with Chinese battery giant Contemporary Amperex Technology Co. Limited (CATL). Concerns were raised in Washington about the use of Chinese intellectual property in a project supported by American taxpayer dollars. In May, Ford warned that language in the House version of the legislation could compromise the Marshall project by restricting production tax credits for battery components made by certain Chinese companies or produced under a licensing agreement with them. This clause would have disqualified Ford’s use of CATL technology.

However, the final version of the legislation, which was recently passed, revised that language. Ford now expresses confidence that the Marshall plant will qualify for the production tax credit, which supports the domestic manufacturing of EV batteries. The company stated that this development is a win for both its customers and American competitiveness. The new U.S. tax bill also offers significant benefits to automakers, including the elimination of penalties for failing to meet Corporate Average Fuel Economy (CAFE) targets.

In 2023, Michigan reduced its incentive package for the project after Ford scaled back expected production volumes to align with slowing EV demand nationwide. The company cited declining consumer interest in EVs and high production costs as reasons for its more cautious rollout. Despite these challenges, Ford remains committed to its EV strategy, with plans to produce more affordable electric vehicles priced under $30,000, set to arrive in 2027. The Marshall plant will be the first in the U.S. to make LFP cells for automotive applications, further solidifying Ford's commitment to the EV market.

Industry analysts have noted that while the law’s changes remove near-term obstacles for automakers, they also raise questions about the long-term strategy. A policy analyst familiar with the legislation stated that this is a necessary compromise to maintain momentum in EV manufacturing. However, the U.S. will still need to invest heavily in its own battery technology and supply chains if it wants true independence. Ford's ability to secure the production tax credit ensures that jobs and investment in the plant are no longer at risk, underscoring the company's strategic move to invest in EV technology and its commitment to creating a sustainable future for the automotive industry.