China-linked battery firm scraps plan for US$2.4 billion Michigan EV plant
People are seen next to robotic arms for a second battery tray assembly line at the opening of a Mercedes-Benz electric vehicle Battery Factory, in Woodstock, Alabama, US, March 15, 2022. (Photo: Reuters/Elijah Nouvelage)
WASHINGTON: A subsidiary of Chinese battery maker Gotion has scrapped plans to build a US$2.4 billion electric vehicle battery materials plant in Michigan, state officials said on Thursday (Oct 23).
The project, first announced in October 2022, was expected to create 2,350 jobs but drew political backlash over Gotion’s Chinese ownership. The Michigan Economic Development Corporation (MEDC) said none of a US$125 million state grant had been disbursed and that it would seek repayment of another US$23.6 million that funded the property purchase.
Germany’s Volkswagen, which owns about 30 per cent of Gotion High-Tech, is the company’s largest shareholder. But US lawmakers have argued that Beijing still exerts “effective control” through individual Chinese investors.
COMPANY DISPUTES ABANDONMENT CLAIM
In a letter to the MEDC seen by Reuters, Gotion’s lawyer rejected the claim that the firm had abandoned the project, calling it “utterly false”. However, the letter acknowledged that due to “the continuing barrage of attacks” and opposition from Green Township, the company would suspend work for six months to “have an open and candid discussion about the viability of the project and the long-term plan for this site.”
The state had previously warned Gotion it was in default on its grant agreement because no activity had occurred on the site for more than 120 days. The company had been given 30 days to respond.
POLITICAL PUSHBACK AND EV MARKET SHIFT
Gotion filed a lawsuit in March 2024 against Green Township for allegedly breaching an agreement to allow the plant’s construction. The company’s plans also came under scrutiny as US enthusiasm for electric vehicles waned, prompting automakers to delay or cancel projects following policy shifts by the Trump administration.
Representative John Moolenaar, a Michigan Republican who leads a congressional committee on China, welcomed the withdrawal of state support. “This is a victory for transparency and national security,” he said, adding that federal subsidies should not support Chinese-affiliated battery firms.
Volkswagen and Gotion did not immediately respond to requests for comment.
