Ford is “pausing work” on a heavily subsidized electric vehicle battery plant stateside “until we’re confident about our ability to competitively operate the plant,” the company said in a statement Tuesday..Construction was already underway on the US$3.5 billion Marshall plant near Detroit that was hailed by Michigan Governor Gretchen Whitmer but criticized by local residents for $1.7 billion in subsidies..Republican lawmakers were also incensed because it was to use technology licenced from Chinese battery maker Contemporary Amperex Technology Co. Ltd., a publicly listed firm with ties to the Chinese Communist Party..When it was announced in February, members of the Energy and Commerce Oversight Committee wrote directly to Ford CEO Jim Farley expressing their concerns.."While Ford has labeled this project a 'commitment to American manufacturing'… we are concerned that Ford’s partnership with a Chinese company could aid China’s efforts to expand its control over United States electric vehicle supply chains and jeopardize national security by furthering dependence on China," they wrote.."Should China gain control of domestic electric vehicle production, the United States would be exposed to serious national security risks at a time of escalating geopolitical tensions.".For its part, the company said it hasn’t made a final decision to proceed with the plant or scrap it entirely, but the news set off a firestorm of reaction on both sides of the border over the role of government subsidies in funding EV manufacturing..Michigan’s House Minority Leader, Republican Matt Hall, blasted Whitmer personally for the move. ."After failing to land other high-profile Ford deals, Gov. Whitmer gave away the store to bring Ford to Marshall. But with Democrats pushing policies that make Michigan less competitive, the $1.7 billion in subsidies and tax incentives still fell short," he said in a statement..In Canada, the Liberal government is facing lingering fallout from ponying up $30 billion in subsidies for Volkswagen and Stellantis to build EV plants in Ontario..It comes after Ford employees in Canada ratified a new collective bargaining agreement that included “special EV transition measures” for job losses stemming from EVs, which reportedly require a third less labour to build..Ford is presently negotiating with the United Auto Workers in the US on a similar deal and the Marshall plant would have likely wound up becoming a UAW facility — not all battery plants in the US are unionized..Not that it matters, because Ford’s EV sales are showing signs of falling off the proverbial cliff. Although industry wide sales of the electric models are up 50% year-over-year, EVs still make up less than 7% of overall new vehicle sales, according to Barron’s magazine..That in turn is raising concerns among investors over flagging demand for EVs in general, along with the massive dollars being spent to build cars nobody wants..“Companies have to invest to win share, but if they invest and demand doesn’t materialize they look as if they wasted the billions,” Barron’s wrote.
