New scrutiny challenges Michigan's investment in Gotion EV battery plant

• The recall election in Green Charter Township means new officials are now weighing the local impact of the proposed $2.36 billion Gotion Inc. factory
• The township board recently rescinded two shows of support for the project from the previous board
• Gotion says it is working on site plans for its 270 acre property, which state officials determined is one-fifth protected wetlands

The west Michigan township chosen to house a Gotion Inc. electric vehicle battery gigafactory is shifting gears from advocacy for the deal to scrutinizing how the controversial project could impact the community. 

During a special meeting on Sunday, the newly elected Green Charter Township board officially changed the township’s position on the $2.36 billion development, which promises to hire about 2,350 people in Mecosta County.

While the former township board had supported the project, the new board voted Sunday to officially rescind that support. 

The vote came about three weeks after the new board also rescinded the township’s support for extending water lines from Big Rapids to the Gotion project, new Supervisor Jason Kruse told Bridge Michigan.

Related:

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• Jobs v. China: How politics, communist ties roiled $2.3B Gotion plan in Michigan
• Anti-China ‘propaganda' stokes fears as Michigan town weighs Gotion factory

Both moves are among the first for the new township trustees who unseated five board members, including former township Supervisor Jim Chapman, in a November recall election. Two more seats also were recently filled after trustees resigned as the battery plant roiled the Big Rapids area.

Kruse, who won 60 percent of the vote, has now taken over leadership of the rural township near Ferris State University that includes the 270 acres planned for the battery component gigafactory. 

He knows what voters expect of him: “I’m elected to be a no-Gotion guy,” Kruse told Bridge Michigan on Monday. 

As a result, Kruse and the board will “challenge Gotion to make sure the deal is square if it needs to go through” by ensuring that the public’s questions are fully addressed and that the impact of the project will be understood. That includes its impact on the environment, which Kruse said has not been fully vetted.

“Everybody's working together right now to try to drill down and get some facts,” Kruse said. The alternative, he added, is “the deal goes away.”

The Green Charter Township election results are the most definitive backlash among the Michigan communities that, over the past year, have mounted fights against the massive factories that have been subsidized by the state. 

Since early 2022, Gov. Gretchen Whitmer and her administration — seeking billions in investment and promises of thousands of jobs from the EV industry — pledged about $6 billion in support for five major EV projects, including over $1.2 billion total in direct awards and land preparation funding.

Today, most of the projects face delays as manufacturers reset their production volume amid a slower-than-expected market, Bridge reported in late November.

Gotion, however, maintains that it is on target, save for a one-year setback when it reconfigured its building plans solely into Green Charter Township, instead of spanning the property into neighboring Big Rapids Township.

But several steps remain that could be more difficult with the new local trustees in office: Much of Gotion’s property at 18300 220th St. is zoned for industrial use, but a portion faces rezoning approval before the company can build. No site plan has been submitted for the gigafactory, which also will need both municipal water to reach the site and high-power electrical lines. 

Beyond local approvals, the company will also need a state permit to build on and mitigate the wetlands that make up about 60 acres of the site — just over one-fifth of the land area and twice what Gotion engineers anticipated, according to state documents. Those approvals could take a year or longer due to the large size.

Local Gotion spokesperson and company vice president Chuck Thelen said in a statement to Bridge on Tuesday that the project “remains on track and we will continue to work with the entire Green Township Board to ensure that all contractual obligations are met by both parties.”

The company is developing, planning, and finalizing the site plan for the materials facility, he said. 

But Kruse said he and the rest of the just-sworn township board have no knowledge of where the project stands to confirm that it’s on track.

“There's no communication,” Kruse said. “I don't know what they're doing, what they're thinking or where they're at.”

Thelen, however, said he did reach the township Clerk Corri Riebow on Monday, “so we have hopes of possible future collaboration.”

Gotion Inc. operates in the U.S. as a subsidiary of Gotion High-tech, the 8th largest EV battery supplier in China, based on 2022 data. 

The Chinese connection generated national controversy as the details of the project unfolded after the Michigan Strategic Fund, the public funding arm of the Michigan Economic Development Corporation, awarded $175 million in funding to the company as part of a $1.14 billion subsidy offer that includes deals from the state and Consumers Energy, in addition to tax savings.

The strained relationship between the U.S. and China should warrant more state scrutiny, many critics say, since Chinese government regulations by the ruling Chinese Communist Party say the CCP must have a presence in businesses.

However, Gotion Inc., which already operates in the U.S., said no CCP presence would be involved at the Big Rapids-area factory or in other American facilities. 

Critics of the deal, including new board members, also point to unanswered questions about land use, the size of the project and environmental impact. 

“We never got a solid number on the gallons of water they're going to need,” Kruse said. Further, he said, “the infrastructure isn't even remotely close to what that type of a project is going to need, plus subsidiary companies that will come in.”

Meanwhile, Gotion also is developing a factory in a former Kmart warehouse in Manteno, Illinois. The $2 billion, 150-acre project — which also generated local controversy — was cleared for development after local officials approved rezoning on Monday night. 

The Manteno site will produce lithium ion batteries when it opens next year, according to reports about Illinois’ $536 million incentives toward the development that is about 50 miles south of Chicago. Gotion is already hiring for the site. 

In a news release from the state of Illinois announcing the deal, Li Zhen, the CEO of Gotion High-tech, said Gotion’s battery technology should help boost economic and trade exchanges between China and the U.S. 

 "All that we see here [in Illinois] are of enormous value to us: an enabling business environment, a supportive state government for the new energy industry and their highly efficient work, as well as the prospects of the State of Illinois in the coming years,” he said.