Chinese battery maker Gotion Inc. plans to move forward with a $2.4 billion battery parts plant near Big Rapids after receiving results from a federal review looking into potential national security risks.
The company said the Committee on Foreign Investment in the United States determined in its review of the project that its proposed purchase of land in Green Township in Mecosta County “is not a covered real estate transaction and is not a covered transaction under the Defense Production Act of 1950,” according to a Gotion news release.
A covered transaction is a deal subject to CFIUS jurisdiction. Covered transactions can include foreign investment in the United States and certain real estate transactions by foreign people that are reviewed to determine the effect of such deals on U.S. national security.
“We voluntarily submitted all the needed documents to the U.S. Department of Treasury Committee on Foreign Investment in the U.S. to be transparent and accountable and received the response that it is not a covered transaction,” Chuck Thelen, vice president of Gotion’s North American manufacturing, said in the release.
Gotion submitted to a voluntary CFIUS review in April for its planned factory in Green Township, which has become a lightning rod for criticism and political debate. The plan to build a factory spanning 2 million square feet — and possibly another 1 million square feet on top of the initial footprint — has been effectively on hold for the past month as the company awaited results of the federal review.
CFIUS is a federal agency composed of nine Cabinet members tasked with reviewing certain foreign investments in the U.S. and assessing their potential impact on national security.
Crain’s requested a full copy of the CFIUS review results from Gotion. Multiple requests to the committee for more information have been unanswered.
Officials with Big Rapids Township, which was eventually cut out of the factory footprint due to board opposition, called for a CFIUS review earlier this year, as did U.S. Rep. John Moolenaar, R-Mich., who represents Michigan’s 2nd District.
The company itself then submitted to the federal review in May to “dispel the horrible rumors that Gotion has bad intentions for Mecosta County,” Thelen said in an email to Crain’s last month.
During the CFIUS review, the company paused pre-development activity, including environmental permitting and a request to rezone 184 acres adjacent to the 245 acres already zoned industrial in Green Township.
“Gotion decided to not burden the township or county with the effort until we have our CFIUS result from the treasury department …” Thelen said in the email.
Gotion’s battery plant has been rife with controversy since plans were announced in October 2022. Besides concerns over the environment and impact on quality of life, the main criticism of the project has been the company’s ties to China.
Gotion Inc. is a subsidiary of China-based Gotion High-Tech Co. Ltd. that was established in California in 2014. Volkswagen is the company’s largest shareholder, with a 25 percent stake. Chinese national Li Zhen, who is founder and president of the company, is the next largest shareholder at 13.6 percent.
Critics have scorned the company’s ties to the Chinese Communist Party, pointing to its articles of association as a major red flag. As of last July, they stated: “The Company shall set up a Party organization and carry out Party activities in accordance with the Constitution of the Communist Party of China.”
In response, Thelen said those terms apply to parent company Gotion High-Tech Co. Ltd. but not the North American subsidiary. The executive has also repeatedly said the company is prepared to walk away from the project if it isn’t welcome.
Gotion isn’t the only corporation facing blowback for its ties to the Far East. Ford Motor Co. has been criticized for its partnership with Chinese battery giant Contemporary Amperex Technology Co. Ltd. on a $3.5 billion battery plant in Marshall.
The massive EV battery plant projects in Michigan have drawn scrutiny from the local communities to Washington, D.C., to Beijing amid elevated tensions between the U.S. and China. Also the subject of hot debate is whether these plants should qualify for lucrative federal subsidies designed to develop U.S. battery making capabilities — an industry dominated by China.
Construction on Gotion’s factory, which would produce anode and cathode materials for lithium-ion batteries in electric vehicles, was expected to start this summer and take two years to complete. In April, the state Legislature gave final approval for a $175 million subsidy on top of a $540 million, 30-year tax break for the project, which promises to produce 2,350 jobs.
