Ford has announced pausing the construction of a traction battery plant in Michigan while avoiding mentioning any specific reasons. According to The Detroit News, multiple factors could have contributed to this decision, including protests from the residents of the area, the company’s reliance on Chinese technology, and continuing UAW member protests.
The actual construction phase has not begun yet, but the area has been prepared and around $3.5 billion has been allocated for the project. The original plans envisioned the commissioning of the factory in 2026. Once complete, it would be making 400,000 EV battery packs per year.
According to the publication, the local residents protested because the industrial complex was supposed to take up 200,000 square meters (2,152,782 square feet) of agricultural lands. In turn, the authorities found issue with the fact that Ford intended to license the LiFePo4 battery production technology from CATL, one of world’s leading battery manufacturers based in China.
A Ford representative has now said that all expenditure on the project had been halted until a reassessment of its viability. The Detroit News believes it could be done on purpose to exert pressure on the United Auto Workers (UAW) during the trade union’s continuing protests. Canceling the construction of the plant would leave Michigan without at least 2,500 new jobs. On the other hand, the cancellation will obligate Ford to pay back on a wide number of subsidy fees and benefits, some of them with interest, resulting in a severe financial loss.