*

Battery Belt projects face uncertainty due to waning EV

demand

and policy changes

*

Auto industry is installing many times more battery

capacity

than it will need, Reuters review shows

*

Federal raid at Hyundai's Georgia plant marked another

setback

for one of the largest EV projects

By Nora Eckert

STANTON, Tenn., Oct 10 (Reuters) - Stanton, Tennessee -

population 450 - welcomed a massive new neighbor a few years

ago: a Ford electric-truck factory and a joint-venture

battery plant slated to employ 6,000 workers.

Ford's 2022 groundbreaking triggered an influx of

construction activity into the former cotton-and-soybean

farmlands outside of Memphis. Hard-hatted workers filled local

diners. Developers scrambled to build homes and fire stations.

Stanton is quieter these days. Ford over the past 18

months repeatedly delayed phases of the project. The EV truck

plant is slated to begin initial production in 2027 and start

sending deliveries the next year, a timeline delayed several

times from the original plan of coming online in 2025.

Ford said it "will be nimble in adjusting our product launch

timing to meet market needs and customer demand while targeting

improved profitability."

The Ford complex is part of the so-called Battery Belt, a

swath of factories stretching across the U.S. heartland that

spans from Georgia to Indiana. Roughly two dozen battery

projects worth tens of billions in investment have been

announced this decade, promising to inject tens of thousands of

jobs in Republican-dominated states like Georgia and Kentucky.

By last year, though, Americans' waning enthusiasm for

electric cars led automakers to delay or scrap some factory

projects. Now, the additional fallout from U.S. President Donald

Trump's recent policy changes is descending on the Battery Belt.

Ford CEO Jim Farley last week offered the prediction that

electric-car sales could fall by around 50% following the Sept.

30 expiration of a $7,500 tax credit for buyers, echoing other

gloomy forecasts for the EV market.

The uncertain fate of these massive, high-tech factories and

their employment has rattled the small rural communities that

spent years hitching their economic futures to these projects.

"That's on everybody's mind, quite frankly," said Allan

Sterbinsky, who retired as mayor of Stanton in December and

advocated for the site for years before Ford came to town. Some

residents worry that Ford will never follow through on the

plant, the former mayor says. Others hope the company will

repurpose the 3,600-acre site if demand doesn't increase for

EVs.

A Ford spokesperson pointed to the automaker's community

work in Stanton, including grants to public safety organizations

as part of a broader $9 million commitment to the area.

A Reuters review of U.S. battery-investment plans shows

those worries are justified. The industry appears headed toward

a huge glut of factory capacity, if all those projects were to

move ahead as planned.

By 2030, the planned battery plants would provide the

capacity to produce 13 million to 15 million EVs annually,

according to figures provided to Reuters by research firm

Benchmark Mineral Intelligence. But the industry now might only

need about one-quarter of that factory space. S&P Global

Mobility predicts only around 3 million EVs will be produced

that year, and some would likely use batteries imported from

other countries.

Some of that excess roughly 10 million-EV worth of battery

capacity would likely be used for hybrids and extended-range EVs

as well as the booming energy storage industry, but there is

still a sizable gulf, said Stephanie Brinley, S&P Global

Mobility automotive analyst.

The demise of the $7,500 tax credit - which had been in

place for more than 15 years to persuade Americans to try green

cars - is only the highest profile of several anti-EV measures

put forth by the Trump administration. Combined, they further

jeopardize battery projects and other electric-car-related

investments, experts say. In the last few months, several

automakers have canceled, delayed or downsized EV projects.

Meanwhile, a pot of tens of billions of dollars available to

companies that make EV batteries domestically has tighter

restrictions that will likely reduce the amount of federal money

that flows to the battery sites.

"All of a sudden, much of what was originally going to

benefit from these credits now no longer can to a large degree,"

said Jennifer Stafeil, tax auto sector lead for KPMG.

Trump has said he is not anti-EV, but prefers that consumers

decide what cars to buy, without government influence. He also

has criticized EV-friendly regulations implemented under former

President Joe Biden, which Trump has said were costly and

threatened American auto jobs.

One of the nation's largest EV projects, Hyundai Motor's ( HYMLF ) $12.6

billion assembly plant and joint-venture battery factory near

Savannah, Georgia, is moving ahead. Last month the project

suffered a setback when federal law enforcement raided it.

Hyundai has said the fallout would delay the battery plant by at

least two to three months.

In the three years since Hyundai announced the

megasite, 21 suppliers have opened operations near the site.

"Hyundai is committed to offering a diverse product lineup,

including internal combustion, hybrid, plug-in hybrid, and EV

models. We understand that every customer is unique, and we

strive to meet a wide range of needs," a spokesperson said.

The complex is gearing up to hire 8,500 employees by 2031, and

is paying wages 25% above the county average, said Trip

Tollison, president of the Savannah Economic Development

Authority.

Tollison acknowledged that some in the community worry about the

uncertain future of the nascent EV industry that underpins all

that development. He is hopeful Hyundai can flexibly shift to

hybrid production if the EV market doesn't take off.

"That's how you provide opportunities like this to lift people

out of poverty," he said.

(Editing by Mike Colias and Anna Driver)