Ford Motor Co. has expressed concerns about potential job losses at its electric vehicle (EV) battery plant in Marshall, Michigan, if Congress reduces clean energy manufacturing subsidies.

The US$3 billion facility is set to begin production in 2026 and is expected to employ 1,700 workers, producing 20 gigawatt-hours of lithium iron phosphate (LFP) batteries annually.

The plant, located about 100 miles west of Detroit, has drawn political scrutiny due to Ford’s licensing of LFP battery technology from China’s Contemporary Amperex Technology Co. Ltd (CATL), the largest battery producer globally.

Ford claims it fully owns and controls the facility, which would be the first in the US to manufacture LFP cells specifically for automotive use.

Ford’s concerns is the production tax credit under the Inflation Reduction Act, known as 45X, which incentivizes domestic battery cell and pack manufacturing.

According to Benchmark Minerals, Ford could earn around US$2.3 billion in credits between 2026 and 2029 under the current law.

However, ongoing Congressional budget negotiations may change or remove these incentives.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ EV subsidies have a bipartisan history despite current political disputes

Federal support for EV has historically crossed party lines, dating back to the 2007 Energy Independence and Security Act signed by President Bush, which promoted plug-in hybrid development 1.

The phasing structure of EV incentives follows a consistent pattern across administrations. For example, the 2005 Energy Policy Act established tax credits of up to US$3,400 for hybrid vehicles with a 60,000-vehicle manufacturer cap before phasing out 2.

Today’s production tax credits follow this same principle, creating predictability for manufacturers who make investment decisions based on these policies. This explains Ford’s argument that “it’s not fair to change policy after all the expenditures have been made.”

Unlike more contentious climate policies, EV tax credits were designed to balance energy independence, economic competitiveness, and environmental goals, which historically garnered support from both parties until becoming caught in broader political disputes 1.

The Marshall plant represents a $3 billion investment made with the expectation that these longstanding incentive structures would remain stable through their natural phase-out periods.

2️⃣ US-China battery competition involves complex tradeoffs