Ford Motor Co. (F) has stopped construction on a $3.5 billion U.S. electric vehicle battery plant in Michigan.
The Detroit automaker had planned to use technology licensed from Chinese battery maker Contemporary Amperex Technology (CATL) at the Michigan plant.
While Ford said it hasn’t made any final decisions on the Michigan battery plant for its electric vehicles, the pause in construction comes as the automaker is embroiled in labour negotiations with the United Auto Workers (UAW) union.
The Michigan battery plant was scheduled to use lithium-iron-phosphate battery technology from CATL.
Known as “LFP batteries,” they are less expensive and becoming the main choice of automakers that are looking to lower costs on their electric vehicles.
Analysts are speculating that Ford has paused construction on the EV battery plant because it no longer needs as many batteries as it thought previously.
Others speculate that Ford might be trying to slow its capital spending while it negotiates new labor agreements with the autoworkers.
And still other analysts are saying the construction pause might be a negotiating tactic on the part of Ford. If completed, the Michigan battery plant will likely become a UAW-represented manufacturing plant.
Ford has not provided any other details on the Michigan battery plant or whether it plans to resume construction on the facility.
The stock of Ford Motor Co. has increased 5% over the last 12 months and currently trades at $12.58 U.S. per share.
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