Ford Warns GOP Tax Bill Could Jeopardize $3 Billion EV Battery Plant in Michigan

Ford Executive Chair Bill Ford has raised concerns over a new GOP tax bill that could eliminate critical tax credits for electric vehicle (EV) battery production, potentially derailing a $3 billion investment in a Marshall, Michigan, factory. Speaking at a policy conference, Ford highlighted the risk to the plant, which is 60% complete and set to employ 1,700 workers, signaling broader challenges for the EV industry amid shifting U.S. policies, reports Reuters.

Policy Shift Threatens EV Battery Production

The U.S. House of Representatives passed a tax-reform bill in May 2025 that targets lucrative tax credits for EV batteries produced with components from Chinese companies or under licensing agreements with Chinese firms. Ford’s Marshall plant, located 100 miles west of Detroit, relies on technology from Chinese battery giant CATL to manufacture battery cells. The plant, announced in February 2023, is expected to begin production in 2026.

However, Ford warns that losing these tax credits could halt progress. “If it doesn’t stay, it will imperil what we do in Marshall,” Bill Ford stated at the Detroit Free Press Breakfast Club Series in Birmingham, Michigan, on April 17, 2024. He emphasized the unfairness of changing policies after significant investments, noting, “We made a certain investment based upon a policy that was in place. It’s not fair to change policies after all the expense has been made.”

Economic and Operational Impacts on EV Manufacturing

The Marshall facility represents a significant step in Ford’s EV strategy, aiming to localize battery production and reduce reliance on foreign supply chains. The $3 billion project is a joint effort with CATL, a leader in lithium-ion tecnología de baterías, to produce cells for Ford’s growing EV lineup.

Losing tax credits could disrupt not only Ford’s plans but also the economic benefits for Marshall, a region that has “lost thousands of jobs over the past several years,” according to a letter from over 100 local business owners, school leaders, and elected officials urging Congress to retain the incentives.

The plant’s 1,700 jobs would provide a much-needed boost to the local economy, with workers poised to support the production of batteries for Ford’s electric models like the Mustang Mach-E y F-150 Rayo.

Broader Implications for the EV Industry

The GOP tax bill also includes measures affecting EV adoption, such as ending a $7,500 tax credit for new EVs and imposing a $250 annual fee on EVs for road repair costs. These changes, combined with stricter vehicle emissions rules, aim to push automakers toward building more EVs but could strain manufacturers already grappling with slowing EV demand.

Ford itself reduced incentives for the Marshall plant last year after scaling back production to match market trends, a move that drew criticism from some lawmakers over its ties to CATL. The bill now heads to the U.S. Senate, which plans to review and amend it in June 2025, leaving the EV industry in a state of uncertainty.

Technical Dependencies and Supply Chain Challenges

Ford’s reliance on CATL underscores the technical complexities of EV battery production. CATL’s expertise in lithium-ion cells provides Ford with high-density, long-range battery solutions critical for competitive EVs.

However, the proposed restrictions on Chinese technology could force Ford to seek alternative suppliers or develop in-house solutions, both of which would require significant time and investment. With the Marshall plant already 60% complete, any pivot now would likely delay production timelines and increase costs, potentially impacting Ford’s ability to meet EV demand in the U.S. market.

As the Senate deliberates, the outcome of this bill will shape the future of EV manufacturing in the U.S., balancing national security concerns with the economic realities of a transitioning automotive industry. Ford’s Marshall plant hangs in the balance, a test case for how policy shifts can ripple through the EV sector.