Ford Cuts EV Battery Plant Plans as Demand Falls and Labor Costs Rise

Due to decreased demand for electric vehicles (EVs), the company’s attempts to cut expenses, and the labor costs connected with the new United Auto Workers (UAW) contract, Ford (F) is lowering projected output at a new $3.5 billion electric vehicle (EV) battery facility in Michigan. The plant is located in Michigan.

The automobile manufacturer said on Tuesday that it will be “right-sizing” the BlueOval Battery Park Michigan facility located in Marshall as part of its “re-timing and resizing” of some electric vehicle (EV) initiatives. Ford has stated that the output capacity of the project would be reduced from the initially planned 35 gigawatt hours to 20 gigawatt hours at some point in the near future.

In addition, instead of the initial forecast of 2,500 workers being hired there, there would only be 1,700 persons employed there. It is anticipated that production of lithium iron phosphate (LFP) battery cells will commence at BlueOval Battery Park Michigan in the year 2026.

This step is being taken as part of Ford’s strategy, which was disclosed a month ago, to cancel or postpone the construction of around $12 billion worth of new EV production capacity. The development of a new battery facility in Kentucky was one of the aspects of this proposal that was put on hold.

Mark Truby, a spokesman for the firm, noted that despite the fact that the company maintained its optimistic stance on electric vehicles (EVs) and its long-term EV strategy, it was evident that the growth hasn’t been up to the level that was anticipated.

Truby also mentioned that the agreement with the UAW was a consideration for the manufacturing location in Michigan. Earlier estimates provided by the corporation indicated that the transaction would add between $850 and $900 to the cost of a freshly manufactured car.

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