Michigan lawmakers remain split over whether a U.S.-based subsidiary of a Chinese-owned electric vehicle battery company should receive state incentive funding.
Back in October 2022, the Michigan Strategic Fund Board approved $175 million total in incentives to support the development of a Gotion Inc. battery component plant in Big Rapids.
Despite passing a multi-million dollar spending deal to free up the funding and the fanfare of the moment, some Republican lawmakers have since soured on the idea.
Gotion now awaits Senate Appropriations Committee approval for a legislative transfer request before it can receive funding.
Though Gotion Inc. is headquartered in California, critics worry its parent company, Gotion High-Tech Co., Ltd. would have to comply with a Chinese policy that could require it to share data with its government.
A mixture of House and Senate Republicans hosted a press conference at the state Capitol Tuesday to highlight those fears again.
Senator Jonathan Lindsey (R-Allen) said the Michigan Economic Development Corporation should do more security research before investing in foreign-owned projects.
He specifically referenced the Strategic Outreach and Attraction Reserve Fund, commonly called the SOAR Fund. That’s where the Big Rapids project’s proposed funding would come from.
“It doesn’t seem to me that the process, especially SOAR, was ever designed to really tell MEDC that you need to go and do these things. That’s where I hope we move. I hope we can make some policy changes to direct them to do a series of reviews,” Lindsey said.
The state, however, is vehemently pushing back against claims that it’s being too lax with considering which projects it supports. The MEDC said it takes its security cues from the federal government, saying the Committee on Foreign Investment in the United States (CFIUS) has not flagged Gotion for concerns.
Earlier this month, Gotion submitted documents for CFIUS review.
Josh Hundt is the Chief Projects Officer for the MEDC. He said there’s a diligent process to address concerns with investments before incentive money goes out.
“We review our projects based on the company’s credibility, the company’s business credibility, the company’s financial credibility to take on a project and the company’s legal ability to take on a project and we’ll continue that strong due diligence,” Hundt said.
Part of the state’s justification for the investment is the projected impact the development would have on the Big Rapids community. MEDC documents show the state anticipates the creation of up to 2,350 jobs as a result.
MEDC spokesperson Otie McKinley said the benefits are important to remember.
“The number of high paying jobs, the investment in the communities, the tax base that will be going into the communities where these projects have determined to make home. The value is generational, McKinley said.
The state has argued supporting investments like Gotion or southeast Michigan battery projects are positioning it as a leader for the future of the automotive industry and its electric vehicle transition. At times, that’s come with the assertion that Michigan had a duty to fight for every project available and not lose to other states.
Despite that, Republicans Tuesday weren’t so convinced the state needs to do business with Gotion. Going back to its concerns over Gotion’s parent company, Rep. Andrew Fink (R-Hillsdale) said the state should invest in domestic-owned battery technology instead.
“It’s not a mature market yet. And so, the fact is I think we’re sort of acting like it’s not okay to be in sort of an R & D phase on this stuff,” Fink said after the press conference.
The MEDC argues it is currently supporting business startups in the mobility sector.
