House panel advances $585M in state incentives for battery plant projects

Proposals to grant a combined $585 million in state incentives to three major battery manufacturing projects advanced Wednesday with approvals from the Democratic-controlled Michigan House Appropriations Committee.

The committee, on a 16-12 party-line vote, approved transferring $175 million for a Gotion Inc. project outside of Big Rapids, $200 million for an Our Next Energy project in Van Buren Township, and $210 million for a Ford Motor Co. project in Marshall. The money would come from the state's Strategic Outreach and Attraction Reserve business incentive fund. The transfer requests must next be approved by the Senate Appropriations Committee.

The transfer requests were added to the committee's agenda minutes before the start of the hearing, which featured a presentation that provided further details on the Gotion project. That project has resulted in some scrutiny of the company's ties to China, where Gotion was founded.

The project is slated to bring a $2.3 billion investment and 2,350 new jobs, with an estimated average starting wage of $45,000 per year, not including benefits.

Gotion announced plans in October for a $2.4 billion battery parts facility on the outskirts of Big Rapids. The project is slated to receive more than $800 million in incentives, including about $636 million in tax abatements over 30 years and the $175 million in SOAR funding.

Chuck Thelen, vice president of North American operations for Gotion, told legislators that the company — founded by Chinese entrepreneur Zhen Li — already has a presence in numerous global markets, including Vietnam, Thailand, the U.S. and Germany, with plans for further expansion. It employs more than 12,000 people, he said. Gotion's footprint in the United States includes research and development centers in California and Ohio.

Thelen also detailed milestones in the company's history, including stock listings in China and Switzerland. Volkswagen Group in 2020 became a majority shareholder in the company, and Gotion's board is made up of directors from Germany, China and the United States. Li continues to manage the company as chairman and CEO.

Gotion plans for "at least" 95% of the operation near Big Rapids to be locally staffed, according to Thelen. That facility would focus on battery materials manufacturing for unnamed customers in the United States.

Gotion produces battery cells and battery cell systems. The Michigan plant would produce battery materials including cathodes, anodes and separators. Those materials then would be shipped to battery cell manufacturing plants that Gotion plans to build in the United States.

Gotion specializes in lithium iron phosphate, or LFP, batteries. Though he declined to name customers Gotion will supply from the Big Rapids plant, Thelen said the company supplies components for passenger vehicles, commercial vehicles, special vehicles, light-duty vehicles and energy storage and solutions. Gotion already ships energy storage and solutions products to multiple companies in the United States.

“What differentiates Gotion is we’re very vertically integrated," said Thelen. "We own our own mines for raw materials. We build our own and refine our own battery materials. … We have all our own refineries, and we have our own patents for those processes.”

The company hopes to break ground this spring, Thelen said, and for the operation be up and running by the second quarter of 2025.

Thelen also detailed some of Gotion's site selection process, saying that the property near Big Rapids ultimately was chosen after the company narrowed down a list of 44 greenfield sites across the U.S. to 14 sites he personally visited. It was the winner out of three finalists.

“We chose Big Rapids, and there’s multiple reasons for that. One is because of our very strong relationship with Ferris State University," he said. "What we saw with Ferris State is, they have technology programs that are unlike anything we’ve seen in the country.”

The availability of sustainable energy supplied by Consumers Energy was another factor, he said.

Thelen and other presenters fielded numerous questions from committee members on the availability of local labor, the influence of the Chinese government into the company's operations, ecological considerations, and the selection of a greenfield rather than a brownfield site, among other topics.

The transfer requests that the committee approved also included funds for a Ford electric-vehicle battery plant project in Marshall and another battery plant being built by ONE in Van Buren Township.

The Dearborn automaker last month announced plans for the project, under which a wholly owned Ford subsidiary would produce battery cells at "BlueOval Battery Park Michigan" with technology licensed from Chinese battery maker Contemporary Amperex Technology Co. Ltd., or CATL. The plant would employ 2,500 people.

jgrzelewski@detroitnews.com

Twitter: @jgrzelewski

Staff Writer Beth LeBlanc contributed.