Michigan Seeks $23.6 Million Repayment as Chinese EV Battery Plant Project Collapses

Project Termination and Financial Repercussions

Michigan is seeking to recover $23.6 million in state incentives from Chinese battery manufacturer Gotion Inc. after the company’s planned electric vehicle battery plant project near Big Rapids collapsed, according to reports from state economic development officials. The state has declared the company in default of its economic development grant obligations, with sources indicating the project saw no “eligible activities” on the site property for over 120 days.

Project Termination and Financial Repercussions
Political and Community Opposition
Legal Challenges and Default Declaration
Economic Context and Fallout

The Michigan Economic Development Corporation confirmed the state is attempting to claw back funds that were disbursed toward land purchase for the factory site, located approximately 200 miles northwest of Detroit. According to the agency’s statement, an additional $26.4 million from the grant that remained unspent will be returned to state coffers.

Political and Community Opposition

The $2.36 billion factory project, initially supported by Democratic Governor Gretchen Whitmer in 2022, faced mounting resistance from multiple fronts. Local residents in nearby Green Township expressed strong opposition to the development, with some raising environmental concerns about the battery manufacturing facility. The resistance grew so intense that voters in 2023 recalled five local elected officials who had supported bringing the factory to the area.

Republican U.S. Representative John Moolenaar emerged as the project’s most prominent critic, repeatedly accusing Gotion of connections with forced labor and the Chinese Communist Party. Analysts suggest Moolenaar’s position as chair of the House Select Committee on China gave his opposition significant weight in the ongoing debate about foreign investment in critical U.S. industries.

Legal Challenges and Default Declaration

According to documents obtained by reporters, Michigan officials sent a formal default notice to Gotion on September 17, citing both the lack of progress on the project and two ongoing lawsuits that were creating a “material adverse effect” on development. The state reportedly set a 30-day deadline for resolving the defaults, which passed on October 17 without resolution.

The report states that a separate $125 million grant was never distributed to Gotion due to the lack of project advancement. The company, which is headquartered in California, did not respond to multiple requests for comment from journalists covering the story.

Economic Context and Fallout

When originally proposed, the factory was positioned as a significant economic development opportunity for Michigan, with officials projecting it would create over 2,000 jobs and produce critical electric vehicle battery components. The state’s auto manufacturing sector, described by economists as the lifeblood of Michigan’s economy, has faced recent challenges including tariffs affecting the industry.

According to the analysis of economic development experts, the original incentives were approved as state officials sought to bolster manufacturing within Michigan’s borders. The project’s collapse represents a significant setback for those efforts and highlights the complex challenges facing electric vehicle supply chain development in the United States.

Representative Moolenaar celebrated the project’s termination in a press release, stating that “the people of Green Charter Township can finally move on from Gotion’s lies and broken promises.” The congressman had previously introduced legislation that prevented companies like Gotion from receiving electric vehicle tax credits under President Joe Biden’s Inflation Reduction Act.

References

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