Michigan to fund new battery plants in the state
Michigan is about to approve $400 million in incentives to help companies build battery factories worth $4 billion in the state. Preliminary funding approvals confirm earlier rumours of VW partner Gotion High Tech planning to manufacture in the (former) centre of the US car industry. There are also implications for BMW.
A Michigan economic development board approved more than $400 million in state incentives this week to fund two battery factories estimated to cost around $2 billion each. State lawmakers must still approve the packages; however, the deals appear far advanced, with beneficiaries already named.
So far, funding of $175 million will go to Gotion High Tech. A partner to Volkswagen, the company’s plans surfaced earlier this month in the form of an application filed in Michigan. Today’s news confirmed that Gotion plans to invest $2.36 billion (2.41 billion euros) in the new facility now positioned at Big Rapids. Both Michigan and Gotion expect to see 2,350 new jobs created. The factory is scheduled to go into operation in 2024 with 586 employees, with completion set over four construction phases running until 2031. The capacity or the type of cells remains undisclosed.
The second beneficiary poses more of a surprise. An allocation of $236 million will go to Our Next Energy. The company counts BMW among its supporters and is reportedly working on an “anode-free” battery, as it removes the anode from the production process, not the battery. ONE first mentioned plans for a US plant in March without confirming a location. The company is, however, based in Novi, Michigan, near the Van Buren Township that has now been named as the location for the new plant estimated to cost $1.6 billion.
The Michigan Economic Development Corporation board passed the incentives Wednesday, but legislators in the House and Senate will still need to approve, with an unknown timeline for the approval.
The funding comes as part of the ‘Strategic Outreach and Attraction Reserve’ fund passed last year with a $1.5 billion budget. Beneficiaries so far included General Motors and Ford. GM is building a factory in Lansing and also operates two vehicle plants in Michigan. The state has also supported LG ES in its $1.7 billion investment to expand battery manufacturing in the state that’s home to Motown.
“We are in global competition to make sure that Michigan stays on the cutting edge of auto manufacturing,” Michigan Gov. Gretchen Whitmer said Wednesday in an interview with The Associated Press.