Ford's Michigan Battery Plant at Risk If Tax Credits Are Cut

SupplyChainBrain reports that Ford Motor Co.'s plans to manufacture electric vehicle batteries at a new facility in Michigan are at risk if U.S. Congress eliminates federal incentives for clean energy—according to the company's chairman. The facility in Marshall, Michigan—and the 1,700 workers Ford plans to employ there—will be placed in "jeopardy" if U.S. lawmakers move to eliminate tax credits supporting battery manufacturers as part of a broader tax package passed by Congress, said Bill Ford, Executive Chair, during his address at the Mackinac Policy Conference on Mackinac Island, Michigan on May 29. "It's not fair to change policy after all the spending has been made," Ford stated. "The manufacturing tax credit appears to be hanging in the air." Following the event, Ford told reporters that nothing should change regarding the manufacturing tax credit "because we've built the business model around Marshall" with that incentive in place. Republican lawmakers are moving to reverse these policies. In addition to phasing out the $7,500 consumer tax credit for electric vehicles, legislation passed by the House will terminate a manufacturing credit for battery makers after 2031.

From a supply chain perspective, Ford Motor Company is U.S.-based in Dearborn, Michigan, with Bill Ford as Executive Chair (great-grandson of Henry Ford) and Jim Farley as CEO. The company generated 2024 net revenues of $185 billion, with primary models including the F-150, Mustang, Bronco, Escape, and Explorer. Core business units include Ford Model e (EV division), Ford Blue (ICE division), and Ford Pro (commercial vehicle division). BlueOval Battery Park Michigan, planned for Marshall, Michigan with a $3.5 billion investment and a 2026 startup target, will use LFP (lithium iron phosphate) chemistry with licensed technology from Contemporary Amperex Technology Co. Limited (CATL; CEO Robin Zeng; based in Ningde, China). Other Ford battery facilities include the BlueOval SK joint venture with SK On (South Korea) in Kentucky and Tennessee with an $11.4 billion investment, and BlueOval City in Stanton, Tennessee, which includes an F-Series EV factory. The Inflation Reduction Act (IRA; August 2022) provides two primary incentives: Section 30D, a $7,500 consumer EV tax credit, and Section 45X, the Advanced Manufacturing Production Credit (a per-kWh tax credit on battery production). Major beneficiaries include Ford, GM, Stellantis, Hyundai, Honda, Toyota, Panasonic, LG Energy Solution, SK On, and Samsung SDI.

From a supply chain perspective, the One Big Beautiful Bill approved by the U.S. House of Representatives in 2025 targets: (1) eliminating the Section 30D consumer EV credit; (2) eliminating the Section 25E used EV credit; (3) eliminating the Section 45W commercial EV credit; (4) terminating Section 45X manufacturing credit in 2031; and (5) tightening Foreign Entity of Concern (FEOC) restrictions on Chinese content. The Trump administration (Donald J. Trump, 47th President) aims to largely reverse the climate provisions of the IRA—but in the Senate, Joe Manchin (formerly) and other GOP members are pushing back due to concerns over job and investment losses. Michigan (Governor Gretchen Whitmer), Tennessee (Governor Bill Lee), Kentucky (Governor Andy Beshear), Ohio, Indiana, and Georgia are major battery investment states—each attracting tens of billions of dollars in facility investments and hundreds of thousands of jobs. Marshall Township in Calhoun County, Michigan is positioned to become an industrial hub with the Ford BlueOval Battery Park, targeting a 2026 start.

From a supply chain perspective, the U.S. EV and battery supply chain ecosystem encompasses: (1) lithium extraction (Albemarle, Livent, Lithium Americas); (2) lithium processing (primarily Ganfeng Lithium, Tianqi Lithium; China-heavy); (3) cathode active materials (POSCO Chemical, LG Chem, Umicore); (4) anode active materials (graphite, silicon); (5) separators (Celgard, Asahi Kasei); (6) electrolyte (Mitsubishi Chemical, Guotai); (7) cell manufacturing (CATL, BYD, Panasonic, LG Energy Solution, SK On, Samsung SDI); (8) module and pack assembly; (9) OEM integration; and (10) recycling (Redwood Materials, Li-Cycle). The Advanced Technology Vehicles Manufacturing (ATVM) Loan Program through the U.S. Department of Energy provides low-interest loans for major projects such as Ford BlueOval SK, Stellantis, and Ultium. Overall, Bill Ford's warning about the tax credit threat underscores that global EV transition policy and battery supply chain investments face significant uncertainty—making policy risk management and supply diversification critical strategic priorities for supply chain managers.

Key Points:
\n1. Bill Ford warns that the Marshall, Michigan battery facility will be jeopardized if tax credits are eliminated.
\n2. An employment plan of 1,700 workers is targeted for BlueOval Battery Park.
\n3. The House bill terminates the Section 45X manufacturing credit in 2031.
\n4. Chinese component restrictions could render credits ineffective.
\n5. The IRA (Joe Biden) was created to support the EV supply chain.

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