By David Shepardson
WASHINGTON (Reuters) -A subsidiary of Chinese battery company Gotion has abandoned a plan to build a $2.4 billion plant in Michigan to produce key materials for electric vehicle batteries, the state said on Thursday.
The plan, first announced in October 2022, was expected to create 2,350 factory jobs but came under criticism from some lawmakers for the company's Chinese ownership.
The Michigan Economic Development Corporation (MEDC) said none of a $125 million state grant for the
project was ever disbursed and it will pursue repayment of another $23.6 million state award that went toward purchase of the property.
Germany's Volkswagen is the largest single shareholder in Gotion Inc's parent company, owning about 30% of Gotion High-Tech. U.S. lawmakers said last month China maintains "effective control" through multiple individual shareholders.
Gotion Inc's head of corporate and public affairs, Benjamin Howes, would not address specific questions on the plant but said in a statement the firm "remains firmly committed to its mission of driving America's clean energy future" including at a plant in Illinois.
Volkswagen was not available to comment.
In March 2024, Gotion sued Green Township in Michigan for allegedly breaching an agreement to build the plant.
The MEDC last month sent Gotion a letter saying it was in default on its grant agreement because there had been no actions on the project site in more than 120 days. The state had given Gotion 30 days to resolve the default.
A lawyer acting for Gotion Inc said in a letter to the MEDC seen by Reuters that it was "utterly false" to accuse the company of abandoning the project.
He added because of a "barrage of attacks that Gotion has had to endure at this site" and Green Township's opposition, that a better course of action was to suspend the default for six months to have "an open and candid discussion about the viability of the project and the long-term plan for this site."
Over the last year, Americans' waning enthusiasm for electric cars led automakers to delay or scrap factory projects. After recent EV policy changes by the Trump administration, automakers are further retrenching.
Representative John Moolenaar, a Michigan Republican who chairs a select committee on China, praised the withdrawal of state support for the project. He had worked with residents in Green Township to oppose the project and bar U.S. government subsidies for Chinese-affiliated battery companies like Gotion.
(Reporting by David Shepardson; Additional reporting by James Pomfret in Hong Kong; Editing by Elaine Hardcastle and Christopher Cushing)
