Ford To Proceed With $3 Billion Battery Plant Despite Potential Tax Incentive Loss Under Trump's Budget Plan: 'We Stick Behind Our Investments'

Ford Motor Co. (NYSE:F) is determined to move forward with the construction of its $3 billion battery plant in Michigan, even if the project loses its eligibility for federal tax incentives.

What Happened: Ford’s decision to continue with the project comes amid potential policy changes by the U.S. government that could render the plant ineligible for federal tax credits, reported The New York Times on Monday. The plant, located in Marshall, Michigan, is expected to utilize battery and manufacturing technology licensed from the Chinese company Contemporary Amperex Technology Ltd. (CATL).

The Inflation Reduction Act, a key energy and climate change legislation passed under the administration of former President Joe Biden, was anticipated to provide federal tax credits to offset a portion of the plant’s costs. However, current Republican efforts in Congress may result in the exclusion of battery plants using Chinese technology or materials from federal support.

Despite these potential changes, Ford is committed to the project. Lisa Drake, Ford’s vice president for technology platform programs and E.V. systems, stated, “We don't want to back off on this facility. When we invest, we stick behind our investments. Ford is a company that will weather the storm until we get there.”

The plant, scheduled to commence production next year, is projected to create 1,700 jobs and produce batteries using lithium, iron, and phosphate.

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Why It Matters: The potential loss of tax incentives for Ford’s battery plant comes amid President Donald Trump‘s crackdown on all-electric mobility in the country.

Senate Republicans have proposed a bill to end the $7500 EV credit currently available on EV purchases within 180 days after the proposal is signed into law.

Earlier in February, automakers like General Motors Co. (NYSE:GM) and Ford had appealed to lawmakers to gradually phase out electric-vehicle (EV) tax credits over several years, rather than abruptly ending them.

On a year-to-date basis, shares of Ford surged 11.4% as per Benzinga Pro.

• READ MORE: Ford Recalls Aviator SUVs As Adhesive Issue Adds To Automaker’s Mounting Recall Woes
  
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.