Gotion sues tiny Michigan township to recoup costs from failed EV battery deal

Gotion Inc. is asking a judge to award financial damages after its conflict with Green Charter Township over a planned EV battery factory
The community near Big Rapids rescinded a development agreement, and two years later, the state eliminated incentives
Now the company says it’s owed for its time and expenses because the decision was made with ‘animus’

A China-backed electric vehicle battery company is making good on its threat to seek money from a mid-Michigan township that rescinded a deal on a $2.4 billion factory.

Gotion Inc. filed a request for monetary damages from Green Charter Township last week, five months after its lawsuit against the Mecosta County community was returned to US District Court in Grand Rapids.

Township officials initially backed the project, which was in line for $175 million in corporate subsidies from the state. But residents elected trustees opposed to the deal in 2023 who rescinded approvals for the project.

“The township legislated out of animus directed at Gotion,” the company’s attorneys said in their May 29 filing.

Among other things, trustees in the community of 3,300 residents nixed a development agreement to allow Gotion access to water and sewer lines and moved for greater planning oversight of land use.

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Gotion had struck the deal to build in the township in 2022 after Mecosta County, which previously had planning oversight in the township, vowed support.

“Such egregious abuse of official power shocks the conscience,” the company said.

Once a celebrated project, the Gotion deal was planned to take advantage of the Biden administration’s tax credits for clean energy technology.

But the proposal faced community opposition over traffic and other issues, and became an issue in the 2024 presidential election because it is a subsidiary of Gotion High-tech Inc., a firm with ties to the Chinese government.

Under the Trump administration, the US enacted so-called Foreign Entity of Concern restrictions on those tax credits. That prompted Chinese companies to sell their stakes in US projects or finding new partners, as Gotion did with its EV battery factory in Illinois.

Last fall, the Michigan Strategic Fund deemed the project in default and announced it is moving to recoup $50 million in subsidies. Separately, the state Attorney General is seeking $24 million in state funds Gotion used to buy land.

“It is clear the project cannot move forward in the face of this continued opposition and the state of Michigan’s withdrawal of support,” Gotion said in its filing.

A specific damage amount sought by Gotion was not listed. However, Gotion said it “has already invested substantial resources and efforts,” including $24 million from the state to buy land for the site.

Other costs include:

$500,000 for management and marketing fees
$56 million in salaries and infrastructure costs
$7.3 million for architectural and engineering design work

Gotion’s parent company had about $6 billion in revenues last year, while Green Charter Township’s general fund budget is less than $1 million.

Meanwhile, Bridge Michigan obtained documents through the Freedom of Information Act showing that detailed how $50 million in taxpayer money was disbursed to The Right Place economic development organization for the Gotion deal.

That group, in turn, gave $23.67 million to Gotion, as allowed by the state’s Strategic Outreach and Attraction Reserve (SOAR) fund incentive, according to the MEDC.

Other costs include $96,000 for the Mecosta County Road Commission to work on road engineering; and $333,900 for grant administration by The Right Place.

Another $27.4 million was unspent.

The state told Bridge early this year it continues to work with Gotion and that it hopes to recoup funds amicably.

A spokesperson said she had no update on Tuesday.

Township Supervisor Jason Kruse did not respond to a request to comment by Bridge.

The township has sought financial help to pay its legal bills, receiving nearly $200,000 of Mecosta County’s marijuana tax revenue.