By David Shepardson
(Reuters) -Ford Motor said Tuesday it believes its planned $3 billion Michigan electric vehicle battery plant, which is 60% complete, will qualify for production tax credits after a massive tax and budget bill revised the rules.
In May, Ford had sounded the alarm over the potential for the U.S. government to eliminate production tax credits that support the manufacturing of electric vehicle batteries using Chinese technology in the House version of legislation.
Ford said Tuesday the Marshall, Michigan plant that is slated to employ 1,700 workers “is on track to qualify for the production tax credit — a win for our customers and a win for American competitiveness.”
Ford said the plant, which was announced in February 2023, is expected to begin producing batteries in 2026. Ford’s factory would make battery cells using tech from Chinese battery giant CATL.
The tax bill passed by the U.S. House of Representatives would have barred tax credits for batteries produced with components made by some Chinese companies or under a license agreement with Chinese firms.
The Alliance for Automobile Manufacturers, a group representing General Motors Ford, Toyota Volkswagen and others, praised the final bill for revising language on a battery production tax credit that “preserved auto-related advanced manufacturing across the country and prohibited Chinese companies from eligibility.”
Ford received a reduced incentive package from Michigan last year for the battery plant after it cut expected production there to match slowing demand for electric vehicles. The plant has drawn scrutiny from some lawmakers for its ties to the Chinese company.
The sweeping tax and budget legislation took aim at EVs on a number of fronts.
It ends the $7,500 tax credit for buying or leasing new electric vehicles on September 30, as well as a $4,000 used EV credit.
Separately, U.S. automakers stand to receive significant benefits from the law that also eliminates penalties for failing to meet Corporate Average Fuel Economy shortfalls, which makes it easier for automakers to build gas-powered vehicles.
(Reporting by David Shepardson; Editing by Chizu Nomiyama)
Comments