(The Center Square) – A multi-billion dollar Michigan plant currently under construction is in jeopardy as the federal budget package proposes cuts to electric vehicle tax credits.
Bill Ford, executive chair of Ford Motor Co., said at a recent conference the cuts could “imperil” the project.
“We made a certain investment based upon a policy that was in place,” Ford said of the prospective cuts. “It’s not fair to change policies after all the expenditure has been made.”
Located in Marshall, the BlueOval Battery Park is expected to begin operating by 2026.
The plant, which is owned by a subsidiary of Ford, will produce lithium iron-phosphate batteries for all-electric vehicles. Those batteries are expected to power Ford’s future electric vehicles.
More than 100 local business leaders and politicians recently joined to push for the preservation of the tax credits.
“We respectfully request that the positive economic impact from this project on our community be taken under consideration as Congress contemplates changes to the Federal Tax Production Credit that could put that investment at risk,” the officials said in a letter to U.S. Rep. Tim Walberg, R-MI. “The economic impact of this investment on this region cannot be overstated.”
The Federal Tax Production Credit, which effectively lowered the cost for manufacturers to make electric batteries, was eliminated under the U.S. House version of the budget reconciliation package, entitled the One Big Beautiful Bill Act. The bill looks to end credits specifically to manufacturers using Chinese technology, which the Marshall plant intends to utilize in its battery production.
The bill package narrowly passed the U.S. House and currently needs just a majority vote in the U.S. Senate to head to the president’s desk for passage.
The letter from industry leaders failed to sway Walberg or any other Michigan Republican in the House. All seven voted for the bill and to end the credit. All six Michigan Democrats in the House voted against the bill and to keep the credit.
This is not the first hurdle for the plant.
While originally set to create upwards of 2,500 jobs once operational and bring a $3.5 billion dollar investment from Ford, the project has since been scaled back.
After a brief pause, it is now expected to create 1,700 jobs, and Ford also cut its planned investment due to a slowing in the electric vehicle industry.
Throughout the project, taxpayer monies, both from the state and local Marshall entities, has played a critical role in funding. Most recently, the Marshall Area Economic Development Alliance “transferred” 500 acres of land to BlueOval Battery Michigan LLC for the building of the plant. The land transfer now makes it the largest industrial property owner in Marshall.
The project is supported by Gov. Gretchen Whitmer and has received significant financial support from the state through grants and tax exemptions. This included $210 million in funding and a $772 million Renaissance Zone tax exemption over 15 years.
When Ford announced its plan to cut funding, Michigan followed suit, with the Michigan Strategic Fund cutting its subsidies.
In return for the taxpayer investments, Ford has committed to local investments and increased tax revenue. To date, MAEDA reports Ford has invested more than $600,000 to fund a number of Calhoun County organizations and services, including local public schools, theaters, and the city itself.
If the tax credit is ended, James Durian, CEO of MAEDA, expressed concern for the future of clean energy manufacturing in Michigan and the United States.
“This project is also critically important to the United States so we can bring manufacturing jobs and the supply chain back home and compete with China,” Durian said. “These will be American jobs for an American company at an innovative American-owned battery facility.”
There has been no formal announcement from Ford or BlueOval on how construction of the plant might be affected if the tax credits are officially ended.
