Michigan legislature approves $400 million for EV battery plant business

LANSING, Mich. (AP) — The Michigan Economic Development Commission approved more than $400 million in state incentives Wednesday for two battery facilities estimated to cost $4 billion and bring 4,500 jobs to the state post.

Pending approval from state lawmakers, the incentive package will come from a fund created less than a year ago to help the Auto State make big business following news of Dearborn-based Ford Motor Co. expansion. Construction of electric vehicle battery plants will begin in other states.

“We are in a global race to ensure Michigan remains at the forefront of automotive manufacturing. Investments like the one we are announcing today are game-changers,” said Michigan’s governor. Gretchen Whitmer said in an interview with The Associated Press on Wednesday.

Michigan-based energy storage company Our Next Energy will receive $236 million in the deal for a $1.6 billion project in the Detroit suburb of Novi.

Chinese manufacturer Gotion will allocate $175 million in incentives for a planned $2.4 billion facility in Big Rapids in northern Michigan. The main function of these facilities is to manufacture components for electric vehicle batteries.

President Joe Biden showcased his administration’s efforts to promote electric vehicles during an appearance at the Detroit Auto Show last month, when he said Michigan was “building the future of electric vehicles.”

Under his Reduced Inflation Act, electric vehicle batteries must be manufactured in North America to qualify for a federal tax credit of up to $7,500.

The Michigan Economic Development Corporation board passed the incentives Wednesday, but final approval of the incentive package needs to come from the House and Senate Appropriations Committees. The timeline for the committee’s approval is unclear, according to a spokesman.

The $2.4 billion Gotion project, planned on a 523-acre site in Grand Rapids, would create 2,350 jobs with an average wage of $29.42 an hour, according to the company’s proposal. The facility will include a cathode plant and an anode plant, two components that are key to electric vehicle batteries.

The board also approved a 30-year revival zone, which was approved by county officials last week and is expected to save the company $540 million.

Next Energy plans to build a 59,589-square-foot facility in Novi at a cost of $1.6 billion and is expected to create 2,112 new jobs. According to the company’s proposal, the facility would produce “battery packs for commercial and consumer electric vehicles.”

Quentin L. Messer, Jr., chief executive of the National Economic Development Corporation, said the $400 million incentive program is performance-based if the company doesn’t meet its goals.

“If the company performs well, but then bad behavior occurs, and that bad behavior isn’t subsequently corrected, those state taxes go back to Michigan taxpayers,” Messer said in an interview with The Associated Press.

The Strategic Outreach and Attraction Reserve Fund was passed by the Republican-controlled Legislature last year with a budget of $1.5 billion.

To date, $794 million in incentives from SOAR funds have been used, including $666 million for GM projects in March and $101 million for Ford projects in July. Lawmakers last week approved an additional $846 million to replenish the fund.

“Michigan has to compete for the jobs of tomorrow, and the only way to do that is to get involved,” Curtis Huttle, the top Democrat on the Senate Appropriations Committee, told The Associated Press last week.

Joey Cappelletti is a member of the Associated Press/US State Capitol Journalism Initiative. Report for America is a nonprofit, national service program that places journalists in local newsrooms to cover undercover issues.

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