(In July 9 story, in paragraph 7, corrects that Mike Gallagher

is now a former member of Congress.)

By Nora Eckert

DETROIT, July 9 (Reuters) - Ford Motor ( F ) is

receiving a reduced incentive package from Michigan for its

battery plant in the city of Marshall after the automaker cut

expected production at the facility to match demand for electric

vehicles.

The Dearborn, Michigan-based car company is building the

plant and plans to license technology to produce low-cost

lithium-iron batteries at the facility from China's Contemporary

Amperex Technology Co Ltd (CATL), one of the world's

largest battery manufacturers.

The new package from the Michigan Strategic Fund provides a

maximum incentive of $409 million, down from a previous $1.03

billion.

Ford announced in November it would scale back expected

battery production at the plant from a capacity of 35 gigawatt

hours to 20 gigawatt hours, and employee numbers to 1,700 from

2,500.

The automaker has scaled back this and other EV investments

to match lower-than-anticipated demand for EVs. It is expecting

to begin battery production at the Marshall plant in 2026.

The plant has come under fire from politicians for its use

of Chinese technology.

Former Representative Mike Gallagher, a Republican who

chaired the U.S. House committee on China, urged Ford to call

off the deal late last year, saying it was "unethical" for the

automaker to receive taxpayer subsidies for such a project.

Ford has rejected such criticism and reiterated the plant

will create thousands of U.S. jobs.

The company said on Tuesday it was reacting to the slower

growth in EV demand.

"We are nimbly adjusting our manufacturing operations to

match evolving customer demand and the Michigan Strategic Fund

board is revising its incentive offers accordingly," Tony

Reinhart, Ford's director of state and local government affairs,

said in a statement.

Michigan also reduced incentives for a separate Ford

investment project the company announced in June 2022 that would

create thousands of new unionized jobs in the Midwest.

The automaker revised that plan in January, scaling back

production at its F-150 Lightning electric pickup plant, and

adding a new shift to an assembly plant in Michigan that

produces its popular Bronco and Ranger gasoline-powered

vehicles.

Michigan retracted a $100 million grant for the Lightning

plant.