Chinese Company Plans Michigan Electric Vehicle Plant

Ford and a major Chinese manufacturing company will cooperate in building a new factory for electric vehicle batteries in Marshall, Michigan, which poses wider questions about the role of Chinese influence in the American economy.

The motor vehicle giant announced that it would be working with a Chinese company on the project.

Ford will work together with Chinese-owned Contemporary Amperex Technology Co. (CATL) to construct the plant. The facility will be owned by Ford as the Chinese company will provide workers at the plant. Ford’s expectation is that the new factory will open by 2026 and have a workforce of 2,500.

The car manufacturer will be producing lithium iron phosphate batteries, which are less expensive for use in electric vehicles.

Furthermore, the Chinese company also has contracts with other large car manufacturers, including the American company Tesla, Japanese company Honda and German BMW.

Part of the cost of the factory will likely be underwritten by American taxpayers. The Biden Administration announced a $7,500 federal tax credit program for new electric cars under the Inflation Reduction Act.

The cars manufactured at the plant will be eligible for at least a portion of the tax credit. Due to the fact that the factory is in the United States, one proviso of the credit will not apply. The same act bars giving the tax credit if the vehicle or its parts are manufactured in China.

In November 2022, Ford called on the U.S. government to ease restrictions within the tax credit that could help its Chinese partners.

Ford has also had a long history with business ventures in China, including an earlier push to build more vehicles in the communist nation.

The latest news comes as Beijing faces increased scrutiny on Capitol Hill following the intrusion of a Chinese spy balloon. Lawmakers from both parties are calling on the Biden Administration to take stronger measures against Chinese government agencies and companies.

Last week, Washington announced restrictions on six Chinese agencies regarding access to American technology. The Department of Commerce said in a statement that “entities that seek to harm U.S. national security and sovereignty will be cut off from accessing U.S. technologies.”