Michigan’s ambitions to become a hub for electric vehicle battery manufacturing have hit a significant roadblock. The state is now reclaiming millions in incentives following a failed attempt to establish a Chinese company’s battery plant. The project’s termination comes after prolonged opposition from local communities and political figures.
Governor Gretchen Whitmer, representing the Democratic Party, backed the $2.36 billion investment in 2022. State legislators endorsed around $175 million in incentives for this venture. However, Gotion Inc., the California-based firm behind the project, faces allegations of defaulting on their commitment, prompting Michigan to demand the return of $23.6 million.
“While this is not the outcome we hoped for, we recognize the tremendous responsibility we have to the people we serve to make sure their hard-earned tax dollars are spent wisely and appropriately,” stated Danielle Emerson from the Michigan Economic Development Corporation.
Despite repeated attempts, representatives of Gotion have remained silent on the matter. The state communicated its intent in a letter dated September 17, noting the absence of any “eligible activities” on the proposed site near Big Rapids for over 120 days.
The state has sought to recover $23.6 million used in land acquisition, while an unutilized $26.4 million from the grant is set to be returned. Due to the project’s stagnation, a separate $125 million grant was withheld. Crain’s Detroit Business was the first to report on these developments.
Litigation against the project is cited as an adverse factor, contributing to the default claim. The state has set a deadline of October 17 for resolution, after which they expect repayment.
Local resistance in Green Township, primarily due to environmental concerns, led to the recall of five officials who had supported the factory project. Michigan’s automotive sector, crucial to its economy, has also been affected by recent tariffs impacting the industry and Canada. The project initially promised to create over 2,000 jobs by manufacturing key electric vehicle battery components.
Republican U.S. Rep. John Moolenaar, a staunch critic of Gotion, has raised concerns about the company’s alleged connections to forced labor and the Chinese Communist Party. Moolenaar, who leads the House Select Committee on China, also introduced legislation to prevent companies like Gotion from benefiting from electric vehicle tax incentives under President Joe Biden’s Inflation Reduction Act. This bill was signed earlier this year by President Donald Trump.
“Now that its contract with the State of Michigan and MEDC is set to be terminated, the people of Green Charter Township can finally move on from Gotion’s lies and broken promises,” Moolenaar expressed in a press release.
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