Michigan, Ford coming to terms with electric vehicle industry setback

(The Center Square) – Flush with state government incentives, Ford is looking to backtrack on its electric vehicle plans by at least $750 million.

The Detroit-based automobile maker is working with the Michigan Economic Development Corp. to cancel two projects, in response to lack of customer demand in the electric vehicle market. The state and Ford agreed on Tuesday to cut significant funding on a battery factory outside Marshall.

“We are nimbly adjusting our manufacturing operations to match evolving customer demand and the Michigan Strategic Fund board is revising its incentive offers accordingly,” said Tony Reinhart, a government affairs director at Ford.

The new agreement is to slash the $825 million in tax credits to just $225 million, alongside cutting $69 million in a public grant. Despite this, the Marshall plant is already partially completed, and on track to begin battery production in 2026. Wages have also increased from $20 to $25 per hour.

Prior to Tuesday, Ford had already cut back on production plans for Marshall’s BlueOval Battery factory. In late November, they reduced the project investment by a whopping $1 billion, cut 800 jobs and reduced production capacity by 40%. This week, the state has responded by substantially reducing benefits.

With the new plan, Ford could still receive a $141 million grant if it produces 1,700 jobs and invests $2.5 billion in production.

The news comes just a day after the state partnered with Consumers Energy to install 1,500 public electric vehicle fast-chargers by 2030. Consumers’ partnership is just one part of Gov. Gretchen Whitmer’s goal to install 100,000 public chargers by 2030.

That's a big jump from 335 installed last year.

With manufacturing speeds slowed and consumer demand far below expected levels, it’s unknown what the future of the electric vehicle industry in Michigan will look like.