GOP tax bill provision poses a potential risk to Ford's battery factory, according to the company's leader.
Ford's investment of $3 billion in a battery factory in Marshall, Michigan, could be at risk due to a tax-reform bill recently passed by the U.S. House of Representatives. The bill, if enacted, could bar lucrative tax credits for batteries produced with components made by some Chinese companies or under a license agreement with Chinese firms.
The factory, which was announced in February 2023 and is now 60% complete, is expected to employ 1,700 workers and begin producing batteries in 2026. The plant uses technology from Chinese battery giant CATL (300750.SZ).
The tax-reform bill has drawn scrutiny from some lawmakers due to its potential impact on the battery factory. More than 100 Marshall-area business owners, school leaders, and elected officials wrote a letter to Congress urging the retention of the tax incentives.
The U.S. government's potential elimination of production tax credits that support the manufacturing of electric vehicle batteries using Chinese technology could threaten Ford's investment in the plant. The tax credits have been crucial in supporting the manufacturing of electric vehicle batteries.
Ford's expected production for the battery plant has already been cut to match slowing demand for electric vehicles. This move, coupled with the potential loss of tax credits, could further jeopardise the factory's production.
Bill Ford, Executive Chair of Ford, expressed concern over the potential for the U.S. government to change policies that could affect the Marshall, Michigan, plant. He emphasised the importance of the plant to the local community and the automotive industry.
The U.S. Senate plans to take up the bill and make changes in the coming month. The name of the US Senator chairing the hearings for the GOP tax law draft and potentially advising on production tax credits for electric vehicle batteries involving Chinese components or licenses is not specified in the provided search results.
The House bill also includes provisions that could 'imperil' the battery factory. It imposes a new $250 annual fee on electric vehicles for road repair costs and repeals vehicle emissions rules designed to encourage automakers to build more electric vehicles.
The source of the information is a report by Nora Eckert and David Shepardson in Washington. Ford received a reduced incentive package from Michigan for the battery plant in 2022. The company has not yet commented on the potential impact of the tax-reform bill on its plans for the plant.
