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Home » Ford Scales Back $3.5 Billion Michigan Battery Plant Due to Lower EV Demand

Ford Scales Back $3.5 Billion Michigan Battery Plant Due to Lower EV Demand

Ford Posts Strong Q4 Results But Continues Scaling Back EV Ambitions

Ford has announced it is downsizing plans for its $3.5 billion BlueOval battery plant in Michigan, cutting production capacity and jobs in half, Ford cites slower consumer adoption of electric vehicles and rising costs as reasons for scaling back the project.

Originally projected to employ 2,500 workers and produce 35 GWh worth of batteries annually, Ford now expects just 1,700 jobs supporting 20 GWh of output from the Michigan facility when it opens in 2026.

In September, Ford had temporarily halted construction on the Marshall, MI plant to reassess competitiveness. This week, the company confirmed it will resume building but with reduced scale after re-evaluating market demand and financial factors.

Ford spokesperson TR Reid said primary consideration was given to EV sales growth rates, which despite being up 44% for Ford year-over-year, have not expanded as quickly as companies forecasted. Labor costs and changing government incentives also factored into the decision-making.

While still optimistic about EVs long term, Ford is adjusting investments to align with a cooling off period for consumer adoption. “The demand continues to grow, though at a slower pace than expected,” noted Reid.

As legacy automakers race to scale EV production, volatile economic conditions andBattery costs have created uncertainty over optimal capacity growth. With raw material and battery prices high, overbuilding too soon carries consequences.

Ford’s revised Battery plant aims to right-size production for the near term as EV volumes gain traction, $3.5 billion budget is expected to shrink as well amidst the downscoping.

But while conservative, launching any new battery production through 2026 keeps Ford competitive. Other automakers continue pushing ahead on battery investments to fuel more aggressive electrification commitments.

Ford aims to balance pragmatic restraint today while laying foundations for leadership as the EV future plays out. With 40% lower output, BlueOval Marshall positions Ford to respond nimbly to shifting forces reshaping mobility demand.

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