fbpx
Published in Economic Development
A rendering of Gotion Inc.’s planned $2.36 billion battery manufacturing plant in Mecosta County. A rendering of Gotion Inc.’s planned $2.36 billion battery manufacturing plant in Mecosta County. COURTESY RENDERING

‘HISTORY IS BEING MADE’: State board approves incentives for 2 major battery manufacturing projects

BY Wednesday, October 05, 2022 11:17am

A state board has approved hundreds of millions of dollars in tax exemptions and performance-based grants to help lure two large battery manufacturing projects that promise more than 4,000 jobs and nearly $4 billion in investment.

The Michigan Strategic Fund board this morning approved the project incentives for Gotion Inc.’s planned battery manufacturing plant in Mecosta County as well as Our Next Energy Inc.’s advanced battery manufacturing plant in Wayne County.

The projects add to the recent flurry of battery manufacturing investments across Michigan, which state economic development officials say is crucial for maintaining the state’s automotive manufacturing legacy.

“History is being made,” Michigan Economic Development Corp. President and CEO Quentin Messer, Jr. proclaimed after the MSF board approved Gotion’s incentive package, which involves $175 million in performance-based grants and a tax-free Renaissance Zone valued at roughly $540 million.

Gotion, a wholly owned subsidiary of Chinese battery manufacturer Gotion High-tech Co. Ltd. that is also partly owned by Volkswagen, plans to invest up to $2.36 billion at a sprawling plant that would span two townships in Mecosta County and create up to 2,350 jobs. The project would manufacture battery cells with lithium iron phosphate cathode and anode materials — key components for a burgeoning electric vehicle industry. The project would span more than 2 million square feet between the cathode and anode production facilities, according to an MEDC briefing memo on the project.

State officials have called the Gotion project a once-in-a-generation opportunity for rural Mecosta County, whose current largest employer is Ferris State University, which will play a key role in working with the company to develop talent. Local municipalities also backed the project last week by approving the 30-year Renaissance Zone tax exemption.

Project construction could start next year and finish in 2029, according to state officials. More than $11.5 billion in new personal income could be generated from the direct, indirect and induced jobs over the next 20 years.

Brent Case, vice president of business attraction with The Right Place Inc., said during the MSF board meeting that the project would help stop population decline in the area by luring workers and helping to retain Ferris State University graduates.

“It will also bring in many new suppliers, housing opportunities, hotels, restaurants and more customers for existing businesses in the Big Rapids area,” Case said.

Negotiations over the Gotion project have spanned more than a year, while the vacant industrial park has been prepared for large development for more than two decades. Messer said the Mecosta County site, which was picked over competing locations in six other states, had multiple components that made it attractive.

That included the vacant land, “talent and intellectual assets” with nearby Ferris State University, and “relationships” with local economic development partners at The Right Place.

“We began to figure out a pathway forward,” Messer said during a call with reporters this morning. “Those three things always come into play.”

Our Next Energy

Meanwhile, the MSF board approved a separate incentive package for Novi-based Our Next Energy (ONE) Inc., which plans a $1.6 billion battery manufacturing plant in Wayne County. 

The company’s “gigafactory” would produce batteries for the energy storage and consumer and commercial electric vehicle spaces. On the EV side, ONE’s technology relies on iron, lithium and phosphate rather than cobalt and nickel and expects to produce a longer driving range than traditional batteries.

A ONE executive told MiBiz earlier this year that the company’s Aries battery packs designed for commercial fleet vehicles are set to enter full-scale production in 2023. The technology has a $5 billion book of business over the next five years, according to the official.

Founder and CEO Mujeeb Ijaz said the Michigan-based company, which has secured nearly $200 million in startup capital from major automakers and clean energy investors, is focused on creating a U.S. supply chain for the battery manufacturing space.

“Thirty years ago, when I was working at Ford Motor Co. as an engineer, I couldn’t have imagined having this opportunity to build a U.S. battery factory,” Ijaz said during the MSF meeting.

ONE plans to invest $1.6 billion on a nearly 700,000-square-foot manufacturing facility in Van Buren Charter Township in Wayne County, creating 2,112 jobs in the process.

At the site, known as ONE Circle, the company will process battery materials in-house, manufacture anode-free cells, recycle battery materials and also provide an energy storage component for DTE Energy’s power grid.

The MSF board approved a $200 million Critical Industry Program grant, a State Essential Services Assessment tax exemption worth $21.6 million and a $15 million Jobs for Michigan Investment Fund loan 

The performance-based grants approved today are funded through the Strategic Outreach and Attraction Reserve (SOAR) fund created late last year to help lure major economic development projects to Michigan. State lawmakers will now have to sign off on the SOAR allocations for Gotion and ONE.

Never miss MiBiz’s biggest stories and breaking news. Sign up to get our reporting sent straight to your inbox every weekday morning.
 
Read 2953 times
SUBSCRIBE TO MIBIZ TODAY FOR WEST MICHIGAN’S FINEST BUSINESS NEWS REPORTING >