Ford announced that reduces production capacity in the upcoming plant for the production of batteries for electric cars. This decision was made in connection with cooling customer demand for electric cars and rising labor costs. The automaker says it will reduce its original planned investment of $3.5 billion to build the Michigan plant to about $2 billion and now expects to instead of 2,500 employees, it will hire only 1,700.
Ford originally announced the ambitious Michigan battery plant in February in partnership with a Chinese company Contemporary Amperex Technology (CATL), which manufactures LFP (Lithium Iron Phosphate) batteries. The factory will now produce only about 20 gigawatt-hours of batteries per year, representing a reduction of about 43%.
The automaker still plans to open the new plant as planned in 2026, despite a production shutdown during the UAW union strike last month. Ford also recently shelved plans to build its battery plant in Kentucky. It will be interesting to see how other car companies that are engaged in the production of electric cars behave.