A U.S. subsidiary of Chinese battery maker Gotion has scrapped plans to build a $2.4 billion facility in Michigan to produce electric vehicle battery materials, the Michigan Economic Development Corporation (MEDC) confirmed on Thursday, according to a report by Reuters. The project, first unveiled in October 2022, had been expected to create 2,350 factory jobs but faced mounting political backlash over its Chinese ownership.
The MEDC said that none of the $125 million in state grants allocated to the project were ever disbursed. However, the state will seek repayment of another $23.6 million that had already been used for property acquisition. The move effectively ends what had once been seen as a cornerstone of Michigan’s EV manufacturing ambitions.
Volkswagen, which holds roughly a 30% stake in Gotion High-Tech — the Chinese parent company of Gotion Inc — remains the largest single shareholder. However, U.S. lawmakers recently argued that China continues to exercise “effective control” over Gotion through several individual shareholders. In a statement, Benjamin Howes, Gotion Inc’s head of corporate and public affairs, did not comment directly on the Michigan plant’s status but said the company “remains firmly committed to its mission of driving America’s clean energy future,” citing ongoing operations at its Illinois facility.
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Tensions surrounding the Michigan project have been escalating for months. In March 2024, Gotion sued Green Township for allegedly breaching an agreement tied to the plant’s construction. Last month, the MEDC notified Gotion that it was in default of its grant agreement after more than 120 days of inactivity at the site, giving the company 30 days to resolve the issue. A lawyer representing Gotion rejected the state’s default claim as “utterly false,” citing local opposition and repeated “attacks” on the project. He urged a six-month suspension of the default to allow for “an open and candid discussion” about the site’s long-term prospects.
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The withdrawal marks the latest in a growing list of U.S. EV manufacturing projects to be delayed or canceled as consumer demand softens and trade policies shift under the Trump administration. Representative John Moolenaar, a Michigan Republican and chair of a congressional committee on China, welcomed the end of state support, saying it was a “win” for residents who opposed the project and for efforts to prevent U.S. subsidies from benefiting Chinese-affiliated firms.
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