The Battery Factory Cooperation From Ford and Ningde Times Comes Into Halt? What is the Truth?
On Monday, $Ford(F)$ confirmed that it has immediately halted construction of its $3.5 billion battery plant in Marshall, Michigan. As initially planned, the battery plant would have used technology from Chinese company Ningde Times to produce cheaper lithium iron phosphate (LFP) batteries.
TR Reid, a spokesman for Ford, said in an e-mail,
"We are halting construction work on the project and limiting spending until we are confident of our ability to operate the plant competitively."
Reid said the company has a number of considerations now without specifying them, while no final decision has been made on the investment plan.
Under the agreement, announced in February 2023, a wholly owned subsidiary of Ford was responsible for the production of the batteries and $Contemporary Amperex Technology Co.,Ltd.(300750)$ was responsible for providing lithium iron phosphate battery technology and services. Whether the project is just on hold or will be shelved altogether is not yet known.
What’s more, just a week before construction of the battery plant was halted, U.S. autoworkers launched a strike affecting Ford, $General Motors(GM)$ and $Stellantis NV(STLA)$ , the three major automakers. Moreover, in July 2023, two U.S. congressional committees launched an investigation into Ford's licensing agreement with Nintex.
As the automaker's plan, the company will invest more than $50 billion in electric vehicles globally by 2026, of which this $3.5 billion battery plant investment is a part. According to Ford's plan, the company's annual global EV production capacity will reach 600,000 units by the end of this year, increasing to 2 million units by the end of 2026.
The battery plant received $1.7 billion in state subsidies because of its location in Marshall, Michigan. Ford said at the time that the plant was expected to come online and employ 2,500 people in 2026. The state's governor, Gretchen Whitmer, also played an active role in putting the stimulus package in place.
A spokesman said in an email that the state is committed to maintaining Michigan's status as a world-class automaker, so as be active in reaching deals that have brought the supply chain home from overseas for the first time while creating jobs and picking up record investments. Ford has made it clear that this is a temporary shutdown and that the administration will continue to push for negotiations between the Big Three and the United Auto Workers (UAW) to get workers back to work as soon as possible.
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