Marshall breathes sigh of relief as Ford battery plant spared from Trump EV cuts

• Ford executives had warned that cuts to EV-related federal spending could jeopardize the company’s $3 billion battery plant
• Changes to the big, beautiful bill allow the automaker to plan on multi-million dollar tax breaks
• The decision set criteria for Ford to show its Chinese affiliation was not an equal partnership

Ford Motor Co.’s massive electric vehicle battery factory under construction in Marshall will be eligible for federal tax credits after revisions to President Donald Trump’s so-called $3.4 trillion "big, beautiful bill.” 

The change follows a warning from the automaker’s executive chair Bill Ford Jr. in May, when he told Michigan business leaders gathered on Mackinac Island that the planned EV tax cuts in the bill “imperiled” the $3 billion BlueOval Battery Park.

Now Ford can move ahead with opening the facility as planned in 2026 with assurances that it could qualify for the Biden-era credits for manufacturers in effect when it launched construction in 2023 due to changes in how the US views the automaker’s relationship with a Chinese battery maker.

“Ford is committed to making the best, most cost-effective batteries for the next generation of electric vehicles in the United States,” Ford spokesperson Jessica Enoch told Bridge in a statement on Tuesday. 

Qualifying for the tax credit, she continued, is “a win for our customers and a win for American competitiveness.” 

The factory is among Michigan’s largest manufacturing projects inked during the administration of Gov. Gretchen Whitmer. Originally valued at $3.5 billion, it promised 2,500 jobs in the community east of Battle Creek, 

Facing concerns about EV profitability and battery capacity, Ford (NYSE:F) hit pause on the project after the state committed over $1.3 billion in public funding, including tax breaks and land development. 

The automaker [NYSE:F] later reinstated its plans to build EV batteries with the less-expensive LFP technology, licensed from Chinese partner CATL. 

Related:

• Bill Ford: Federal EV policy changes ‘imperil’ $2B Michigan EV factory
• Stung by EV losses, Ford plans smaller Michigan factory with fewer jobs

But this year, the Trump administration vowed to end federal subsidies for the EV market. The production credit — along with several other clean energy credits, including the $7,500 credit for buyers of many EVs — had been eliminated in the House and early Senate versions of President Trump’s One Big Beautiful Bill Act. 

The move prompted Ford’s warnings, saying it was not fair to change the funding mid-stream, even as he said he agreed with the motives “to have a strong American industrial base.”

The sticking point became scrutiny by lawmakers of the CATL deal due to strained US-Chinese relations, prompting questions about Ford’s affiliation with the “foreign entity of concern.”

The Senate, after more than a month of lobbying by Ford, set the tax break criteria on “effective control” in the partnership, the Automotive News reported Tuesday. 

The Dearborn automaker has said it is in control because it owns the site in Marshall and its equipment, the publication said, while CATL trains Ford workers.

Under the new revisions, the 45X Advance Manufacturing Production Credit will provide a credit of $35 per kWh for battery cells and $10 per kWh for modules. The bill says EV batteries must contain 60% U.S. content in 2026, increasing to 85% in 2030.

With the factory’s capacity reaching 20 gigawatt hours per year, the tax break could be worth tens of millions to Ford annually.

While Ford proceeds with its plans to open in Marshall in 2026, critics of CATL’s involvement are not comforted by the bill’s distinction of who’s in control.

"The nature of the ‘deal’ between Ford and China-based and Chinese Communist Party (CCP)- tied CATL remains high risk and volatile, both for our national security and taxpayers,” said Joseph Cella of Michigan, who served as US ambassador to Fiji.

The alliance remains “politically fraught,” Cella said. “I trust the Trump administration will continue to fortify the provision of our common defense from the threat presented by the CCP to our national and economic security."

Marshall business leaders who were instrumental in the Ford deal are relieved by the final bill, they said. Many raised concerns about the end of the tax credit and emphasized over the last month that they are counting on this project’s economic boost.

“We are thrilled to hear that President Trump and Congress came together to preserve the pro-growth federal tax policies that ensure families and businesses across southwest Michigan and the state will continue to benefit from Ford’s investment in BlueOval Battery Park,” said James Durian, CEO of Marshall Area Economic Development Alliance.

“When Ford’s facility begins production next year, it will bring back our supply chain to the United States, which will make our country less reliant on – and more competitive with – foreign countries like China,” Durian said. 

Even with the production tax credits surviving threatened cuts, Ford is still planning on EV battery production at a time when the market is volatile and rapidly changing. The automaker’s EV division lost $5 billion in 2024, and it projected that loss to widen this year.