The state of Michigan and other investors have tried to embrace changing times with incentives to stimulate domestic EV production. Yet despite their best efforts, investments in what has long been the US auto industry’s home state are somewhat middle of the road.
Announced EV manufacturing facilities in the state, which include vehicles as well as batteries, battery recycling, EV charging, and other related components, are increasingly being canceled. More than half of the 89 manufacturing projects announced in Michigan since 2019 were canceled in 2024 and 2025, while the rest were canceled after 2018, according to data from the clean jobs advocacy group BlueGreen Alliance Foundation.
These cancellations represent a loss of $25.9 billion in investments and more than 25,000 announced jobs. Chinese battery manufacturer Gotion was planning to invest more than $2 billion in an EV battery manufacturing facility, but it has since been met with delays and is tied up in litigation.
Ford’s BlueOval Battery Park was also downsized last year. The $2 billion Ford BlueOval Battery Park is one of Michigan’s largest and most expensive manufacturing facility construction projects. Ford originally planned to spend $3.5 billion on the facility and pledged to employ 2,500 people, but downsized the plans to $2 billion and 1,700 pledged jobs when it shifted strategies to focus more on hybrid models toward the end of 2023.
Even Detroit-based General Motors (GM), which made a massive investment in the state and more than doubled its US market share in May from the previous year, has had to scale back its EV business. GM sold its stake in an upcoming 41 GWh Ultium Cells EV battery plant in Lansing to its joint-venture partner LG Energy Solution in May.
Private capital
Private investors have also tried to jumpstart the EV industry in Michigan, pouring more than $8.4 billion into the state’s EV manufacturing industry as of August 2024. This was spurred by about $245 million in US federal funding, according to the Electrification Coalition, a nonprofit that promotes EV policies. These investments, the Electrification Coalition said, fueled more than 14,000 jobs.
Michigan Governor Gretchen Whitmer has placed the electric vehicle supply chain at the center of her economic development strategy for the state since taking office. Investment announcements for new battery and assembly plants poured in, many of which are underway. In the meantime, many of the largest of these investments have been confronted with both local resistance and federal uncertainty, causing them to be canceled or delayed. Other investors have been lured to regions with more attractive support schemes.
Despite Michigan’s best efforts, other US states have offered greater incentives. Ford, for example, announced in 2021 that it was leaving Michigan and would instead spend $11.4 billion on a new manufacturing facility in Kentucky and Tennessee, two states that, combined, would provide more than $1 billion in incentives to the manufacturer.
Within weeks, Michigan’s lawmakers – both Democrats and Republicans – created the $2 billion Strategic Outreach and Attraction Reserve (SOAR) fund in hopes it would help attract and retain electric vehicle manufacturing within the state. Since then, SOAR has committed $1.8 billion in funds, $900 million of which have been spent.
While Ford chose to set up new facilities in other states, it still intends to produce EV batteries in Michigan. In 2024, the American carmaker announced it was scaling back its upcoming EV battery plant from 35 GWh to about 20 GWh, and Michigan then cut the $1.7 billion incentive package it had awarded Ford by about 60%.
When Ford failed to meet its job growth targets at its Rouge Electric Vehicle Center, where it assembles the Ford F-150 Lightning, the Michigan Strategic Fund voted to claw back a $100 million grant tied to that goal. Ford now expects the facility to assemble enough battery packs for about 230,000 EVs per year, down from the originally planned 400,000.
Incentives at risk
Ford made its decision to invest in BlueOval Battery Park when the future of EV battery production tax credits seemed secure. However, those credits were under threat as the One Big Beautiful Bill Act (OBBBA) progressed, with the uncertainty raising concerns for US manufacturers.
Speaking at the Mackinac Policy Conference in May, Ford Executive Chair Bill Ford Jr. noted that while the company “can adjust to anything” it had made its investment decision “based upon a policy that was in place.” Since the OBBBA became law, Ford has confirmed its Michigan EV battery plant will continue to qualify for production tax credits and is on course to start producing batteries in 2026.
The production tax credits may be secured, but the termination of EV tax credits for consumers on September 30 is expected to affect demand.
“If you pinned [the auto manufacturers] down, I think very few of them would say they would make a change based on policy,” said Aaron Viles, director of campaigns at the Electrification Coalition. “But what we do know is that policy does drive markets, so without this kind of market support, they’re not going to need as many battery packs and vehicles.”
Policy uncertainty
With political headwinds and uncertainty softening demand, Bob Lee, the North American president and chief strategy officer of South Korean battery giant LG Energy Solution said the company’s forecast from four or five years ago expecting 50% annual growth “is clearly not realistic.” He said the market has increased by about 11% in the past year, “so it is growing,” he said, “It’s just not growing at a rate of what we expected.”
The uncertainty and multiple sudden changes to US tariff policy, in some respects, is more difficult than the tariffs themselves and clawing back federal incentives, Lee added.
Pat D’Eramo, the president and CEO of Martinrea International, a Canadian automotive parts manufacturer with facilities in Michigan, offered a different perspective.
“Some people call this chaos. I call it normal,” D’Eramo said during the Mackinac Policy Conference panel with Lee. “This … is the most exciting time I’ve seen in the industry in my entire life. This transition, this confusion, this chaos, if you will, is just a tremendous amount of opportunity. We just got to get more people engaged in it.”
Despite the ups and downs, a sense of excitement is echoing across Michigan’s EV industry. The state’s incentives certainly make it an attractive location for businesses in the sector. Though it has lost several manufacturing opportunities to other states, automotives are Michigan’s heart and soul, so it remains aggressive, sharpening and strengthening its competitive edge after each loss.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.
Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.
You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.
Further information on data privacy can be found in our Data Protection Policy.