Ford said Tuesday it will downsize its plans to build a factory in Michigan that makes cheaper lithium iron phosphate batteries using tech licensed from China’s CATL. The decision comes two months after Ford paused the factory project, known as the BlueOval Battery Park Michigan in Marshall; it’s also in line with the company’s decision to delay about $12 billion in planned investments on EVs, including construction of a second battery plant with joint venture partner SK On.

Ford, along with other automakers, have adjusted production timelines and factory plans as the rate of growth in EV sales has slowed and consumers have become more price sensitive.

The scaled-down version of the EV battery factory will have a production capacity 20 gigawatt-hours, reflecting about a 43% reduction. The factory, which is still slated to start battery cell production in 2026, will now employ an estimated 1,700 people, down from the 2,500 jobs. Using back-of-the envelope math based on the capacity reduction, Ford will still need to invest about $2 billion in the project.

“While we remain bullish on our long-term strategy for electric vehicles, we are re-timing and resizing some investments. As stated previously, we have been evaluating BlueOval Battery Park Michigan in Marshall,” the company said in a statement Tuesday.

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