Michigan committee gives $175 million for EV battery plant

Michigan's Senate Appropriations committee has narrowly approved giving $175 million in state funds to a factory planned by Chinese manufacturer Gotion in northern Michigan

Michigan Electric Vehicles (Copyright 2022 The Associated Press. All rights reserved.)

A Michigan Senate committee gave final legislative approval to allocate $175 million in state funds to a factory planned by Chinese manufacturer Gotion in northern Michigan that proponents say will create thousands of jobs and be a boon for the local economy.

The funds were approved in a narrow vote Thursday by the Senate Appropriations committee after multiple Democratic lawmakers sided with Republicans following concerns over Gotion's foreign ties and the plant's potential environmental impacts.

The $2.4 billion Gotion project, which is planned on a large site in Mecosta County's Big Rapids, would create 2,350 jobs with average wages of $29.42 per hour, according to the company’s proposal. A 30-year Renaissance Zone was approved by the state last year and will save the company an additional estimated $540 million. The factory will produce cathodes and anodes, two components that are key to electric vehicle batteries.

In a statement following the committee's approval, Jim Chapman, supervisor of Green Charter Township located near Big Rapids, said the Gotion plant will be the “largest single business investment in Mecosta County history," and is a “once-in-a-lifetime opportunity,” for the community.

While Gotion Inc. is located in California, its parent company — Gotion High-tech — is based in China, which critics have said could present a national security threat. The pushback comes at a time when U.S. lawmakers are considering a ban of TikTok due to its Chinese connections and concerns over data security.

Before the committee’s vote, community members also spoke out regarding potential environmental impacts of the massive plant. One speaker, who said he owns an organic farm near where the plant would be built, expressed concerns over spillage destroying his crops.

Republican Rep. John Moolenaar, whose district includes Mecosta County, said in a statement Thursday that the appropriation committee's approval was a “historic mistake."

“Despite what any current politician might say, there is no communist plot within Gotion to make Big Rapids a center to spread communism,” Chuck Thelen, the company’s vice president for North American operations, said earlier this month at a Green Charter Township meeting.

Thelen told the Senate committee Thursday that Gotion had also undergone a voluntary review by the Department of Treasury’s Committee on Foreign Investment in the United States to clear up any concerns. The committee determined “that our proposed transaction was not subject to further review and we may proceed with the proposed transaction,” Thelen said.

Democratic state Sen. Sarah Anthony, who chairs the appropriations committee, released a statement following the vote that it was committee members' responsibility to separate “fact from fiction and policy from politics,” and that Gotion’s voluntary actions had addressed any concerns.

The funds approved Thursday are part of the state's effort to attract large economic projects to Michigan. In February, the Michigan Strategic Fund approved a large tax incentive package to bring a $3.5 billion electric vehicle battery plant to the state, planned by Ford.