On Monday, Ford Motor announced that it has temporarily halted construction on a $3.5 billion battery plant in Michigan, expressing concerns about its ability to run the

plant competitively.

This decision coincides with Ford's ongoing negotiations with the United Auto Workers union. In these negotiations, Ford has repeatedly increased its offers. Additionally, President Joe Biden plans to visit Michigan on Tuesday to support striking workers at the Detroit Three automakers, including Ford.

Republicans in Congress have been scrutinizing Ford's battery plant project in Marshall, Michigan, which involves technology from CATL, the world's largest battery manufacturer.

Ford stated, "We are pausing work and restricting construction spending on the Marshall project until we are confident about our ability to operate the plant competitively." However, the company did not specify the exact reasons behind this decision, adding, "We have not made a final decision regarding the planned investment there."

In July, Ford predicted a full-year loss of $4.5 billion in its electric vehicle unit, a figure 50% higher than earlier projections. The company also announced a slowdown in its electric vehicle production ramp-up.

The automotive industry is closely monitoring the implementation of new regulations governing future electric vehicle tax credits as it makes investment decisions related to battery production for transitioning to electric vehicles.

In 2022, Congress passed the $430 billion Inflation Reduction Act (IRA), which will disqualify future $7,500 consumer electric vehicle tax credits if any battery components are manufactured or assembled by a "foreign entity of concern."

Ford has been awaiting guidance to determine if the batteries produced by the Marshall plant would meet these requirements. Photo by Tony Webster from Minneapolis, Minnesota, United States, Wikimedia commons.