Ford loses billions of dollars in EV batteries under Trump's electronics tariff war

Ford's $3B EV Battery Plant Faces Uncertainty Under Trump's Tax Credit Attack The joint battery plant plan between Ford and Chinese battery manufacturer CATL in Michigan is facing significant risks, with approximately 2,000 potential jobs in jeopardy if Republican congressmen cut tax credits in the economic package proposed by President Donald Trump. The $3 billion factory, planned to produce 20 gigawatt-hours of lithium iron phosphate (LFP) batteries and employ 1,700 workers from 2026, is under construction but has been under political scrutiny since 2023 due to Ford's battery technology licensing from Contemporary Amperex Technology Co. Ltd. (CATL) - the world's largest battery manufacturer from China. LFP batteries, with their low cost, high thermal stability, and optimal durability, are the top choice for mass-market electric vehicles and are easily accessible. This battery type does not use expensive materials like nickel or cobalt, significantly reducing production costs. However, slower-than-expected electric vehicle sales have forced Ford to reduce the BlueOval Battery Park in Marshall, Michigan, cutting capital to around $2.2 billion and workforce from 2,500 to 1,700 jobs. Initially promised around $1 billion in support incentives, the amount was later halved, increasing financial pressure. The close connection with CATL, suspected of ties to the Chinese Communist Party, has made the project a focal point of U.S. political controversy. Trump's "big beautiful law" policy package now risks cutting production credits, directly threatening Ford's battery plant construction. Bill Ford, the company's executive chairman, has warned about the potential loss of tax credits, emphasizing the unfairness of changing rules after investment has been made. The plant's existence not only affects the workforce but also significantly impacts electric vehicle pricing. LFP batteries are key to reducing EV prices to be competitive with gasoline vehicles - a crucial factor in expanding market consumption. Failure to complete the Michigan battery plant will stall domestic LFP battery production, contradicting legislators' goals of promoting domestic battery supply chains. Other Chinese battery manufacturers, like Automotive Energy Supply Corp. (AESC), have also suspended U.S. factory projects due to import tariffs and challenging market conditions. Experts suggest this is a consequence of declining electric vehicle demand and U.S. policy adjustments negatively impacting the EV battery sector.