Ford pauses work on $3.5 billion battery plant in Michigan.::Ford Motor said on Monday it has paused work on a $3.5 billion electric vehicle battery plant in Michigan, citing concerns about its ability to competitively operate the plant at a time when it remains locked in broader contract negotiations.

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    Ford has repeatedly raised its offer to the union in contract talks without securing a deal, while the fate of battery plant workers has remained a key issue in negotiations with the Detroit Three.

    “We are pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant,” Ford said on Monday, declining to say what specific reason triggered the decision but adding there were a number of considerations.

    Ford in February announced plans to build the plant in Michigan, betting that making the batteries in the United States would help it and Chinese partner CATL (300750.SZ) attract U.S. customers to embrace a lower-cost technology pioneered in China.

    Representative Mike Gallagher, the Republican chair of a House select committee on China, said lawmakers were “encouraged to see Ford take a crucial first step to reevaluate its deal” with CATL.

    In 2022, Congress passed the $430 billion Inflation Reduction Act (IRA), which will bar $7,500 in future consumer EV tax credits if any battery components are manufactured or assembled by a “foreign entity of concern.”

    It had urged the Treasury to take a narrow view of the restriction, warning that “an overly expansive interpretation of this provision risks … making the clean vehicle credit largely unavailable.”


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