Michigan board approves $400 million to advance electric vehicle batteries

By JOEY CAPPELLETTI, Associated Press/Report for America

LANSING, Mich. (AP) — A Michigan Economic Development Board on Wednesday approved more than $400 million in state incentives for two battery installations valued at $4 billion and creating 4,500 jobs in the state.

Pending approval by state lawmakers, the incentive programs would build on a fund created less than a year ago to help the state automaker build significant business at the following the announcement that Dearborn-based Ford Motor Co. would begin building electric vehicle battery plants in other states.

“We are competing globally to ensure Michigan remains at the forefront of automotive manufacturing. Investments like the ones we announced today are game changers,” Michigan Governor Gretchen Whitmer said in an interview with The Associated Press on Wednesday.

A Michigan energy storage company, Our Next Energy, would be allocated $236 million in the deal for a project of up to $1.6 billion in the Detroit suburb of Novi. An allocation of $175 million in incentives will go towards a $2.4 billion installation planned by Chinese manufacturer Gotion for Big Rapids in northern Michigan. The main functions of the facilities would be to manufacture components used for electric vehicle batteries.

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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 the electric vehicle.”

Under its Cut 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’s Board of Directors passed the incentives on Wednesday, but final approval of the incentive packages will have to come from the House and Senate Appropriations Committees. A timeline for committee approval is unknown, according to a spokesperson.

The $2.4 billion Gotion project, which is planned on a 523-acre site in Big 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 essential components for electric vehicle batteries. The board also approved a 30-year Renaissance Zone that was approved last week by county officials and will save the company about $540 million.

Next Energy’s planned 59,589 square foot facility in Novi will cost $1.6 billion and is expected to create 2,112 new jobs. The facility, according to the company’s proposal, will create “battery packs for commercial and consumer electric vehicles.”

Quentin L. Messer Jr., CEO of the state economic development corporation, said the $400 million incentives are based on performance in the event a company fails to meet its goals.

“If the business is operating but then has a non-performance, and if that non-performance is not subsequently corrected, then those state tax dollars will be returned to the taxpayers of Michigan,” Messer said during of an interview with the AP.

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

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

“Michigan needs to compete for the jobs of tomorrow and the only way to do that is to be in the game,” Curtis Hertel, the top Democrat on the Senate Appropriations Committee, told AP last week.

Joey Cappelletti is a member of the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places reporters in local newsrooms to report on underreported issues.

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