Where mega battery, EV projects stand after $1 billion in Michigan subsidies
Michigan Gov. Gretchen Whitmer has staked much of her economic legacy on transitioning the auto industry to electric vehicles, arranging incentives and corporate tax breaks of more than $2 billion to five companies.
The transition is going slower than many analysts expected, as EV sales are slumping and costs are rising.
Here is the progress of each major battery plant, as of early June: General Motors, LG Energy Solution Michigan, Gotion Inc., Our Next Energy and Ford Motor Co.
General Motors: Orion Assembly and Ultium Cells
Whitmer worked with legislators in 2021 to create the Strategic Outreach and Attraction Reserve (SOAR) Fund to recruit “critical industries” and megasite projects, a pot that has since grown to $2 billion.
The first award went to General Motors and its EV battery partnership with LG Energy Solutions for two major projects. One involves adding capacity to GM’s Orion Assembly plant in north Oakland County, converting it into an EV truck production center. The other is for construction of an Ultium Cells EV battery factory near Lansing on land adjacent to GM’s Delta Township Assembly factory.
Related:
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The battery factory is in progress and is expected to open in late 2025, a year later than originally planned.
Ultium Cells is expected to start production in early 2025.
Planned company investment: $6.5 billion
Promised state subsidy: $666.1 million to GM, Ultium Cells and the Lansing Economic Area Partnership
How much Michigan has spent: $517,326,524 at the end of the 2023 MEDC budget year
Additional incentives: Local tax break and an 18-year, tax-free Renaissance Zone designation
Hiring outlook: Orion Assembly workers have been transferred to other factories. Michigan officials said the new operation would retain 1,000 jobs and add 2,300 when at full capacity, but the state only requires 1,860 for the subsidy.
None have been hired during the construction phase, and a GM contractor told Orion Township officials in May that the factory will employ fewer workers than planned.
Ultium Cells projected up to 1,700 new hires when announced, but 1,340 are required for the subsidy. The factory had hired about 120 people as of early March. The company would not disclose to Bridge further hiring plans.
How the companies are doing: GM CEO Mary Barra said in May that the company’s EV division could be profitable by year-end, though earlier reports pushed that to 2025. GM’s EV issues go beyond the sales of autos: The launch of the Ultium battery platform also slowed the automaker, as it worked through quality and software problems.
What comes next: Orion Assembly was expected to produce EV trucks. The automaker says it is increasing its production flexibility to also build internal combustion and hybrid versions of the same models. GM has not said whether that plan will be used in Orion.
Ultium Cells production is expected to start in 2025, but original plans were for the factory to support Orion’s EV trucks.
Capacity of 36 gigawatt-hours would allow it to build 36,000 to 72,000 batteries per year.
In 2023, GM sold 75,800 EVs total.
The Holland-based EV battery company is a wholly owned subsidiary of the South Korean battery company LG Energy Solution, a division of LG Chem. The company built its first large battery plant in Michigan in 2010 to make Chevrolet Volt batteries. Operations grew over a decade to nearly 1,500 employees. A second factory on the complex is under construction and should be active in 2025. The expansion would allow the Holland site to make five times the number of lithium-ion EV batteries. Customers include Ford Motor Co., Stellantis and Toyota.
Planned company investment: $1.7 billion on a second battery plant
Promised state subsidy: $56,550,000 in March 2022
How much Michigan has spent: $0
Additional incentives: $2.8 million from Michigan Department of Transportation for nearby road upgrades; a 20-year, tax-free Renaissance Zone.
Hiring plan: 1,200 jobs
Hiring outlook: The company laid off about 170 Holland-based workers in fall 2023 as it retools its original production lines. Incentives will be measured by job growth over 1,495 positions, according to MEDC documents. The first incentive disbursement can come after 50 people are hired.
How the company is doing: Another division of the parent company is developing the Ultium Cells EV batteries with General Motors, including one factory under construction near Lansing.
Overall, LG Energy Solution was profitable in the first quarter only because of federal tax credits. The company continues to make automotive deals for EV batteries, but also is moving further into energy storage and software development.
What comes next: The Holland company is looking ahead to more growth and local tax breaks, but also sought an extension of terms for its 2022 state incentive award. A third expansion is in planning, Holland city officials said. That development would further increase capacity, but not add jobs.
The U.S.-based division of Chinese EV battery maker Gotion High-Tech plans an EV battery component factory near Big Rapids. The components will be shipped to a planned factory in Illinois for assembly. Construction on the Michigan factory has not started, though environmental, clearing and surveying work has been in progress this spring.
Planned company investment: $2.4 billion
Promised state subsidy: $175 million and a 30-year, tax-free Renaissance Zone
How much Michigan has spent: $50.9 million. This is the full Strategic Site Readiness Program subsidy and two additional grants totaling $908,000 to develop the property. The figure includes $23.6 million given to Gotion to reimburse it for land purchases.
Additional incentives: A local tax break initially was expected.
Hiring plan: 2,350 by the end of 2031; the company recently said it should reach that number by the end of 2033.
Hiring outlook: Six workers have been hired so far. By year-end, about 60 hires are forecast.
How the company is doing: Gotion is battling community opposition in Michigan and Illinois, where it plans to build EV batteries using materials from its Big Rapids factory. It also faces opposition because of its ties to China. Globally, Gotion’s parent company continues to expand and announce new battery technologies.
What comes next: Gotion is suing Green Charter Township in federal court, alleging that the township board — elected in November on an anti-Gotion platform — is violating a development agreement. In mid-May, Gotion obtained a preliminary injunction ordering the township to honor the agreement while the case continues. Gotion is using contract workers for many of its needs as it prepares to submit building permits. Depending on permitting and litigation, the company expects to open the factory in 2026.
The energy storage startup based in Novi established a prototype factory in Van Buren Township, ONE Circle. It promised to build long-range batteries for electric vehicles as well as large-scale energy storage systems. Production was initially forecast to escalate this year, but the company says year-end 2025 is now likely.
Planned company investment: $1.6 billion
Promised state subsidy: $215 million in October 2022
How much Michigan has spent: $78,297,910
Additional incentives: Local and corporate tax breaks
Hiring plan: 2,112 jobs by December 31, 2029
Hiring outlook: About 50 technicians and engineers work at the new site, with another 200 now employed by ONE after two rounds of layoffs since fall. Hiring for the factory is expected to escalate at the end of 2025.
How the company is doing: Founder Mujeeb Ijaz was replaced as CEO last fall as a key funder withdrew support. The company recently hired a consultant to help fund-raise, months after it lost a commitment from London-based venture capital firm Just Climate. An announced energy storage component factory in West Virginia has also slowed.
What comes next: ONE Circle started producing prototype battery cells for potential customers in late 2023. Machinery is on order for the 660,000-square-foot factory that would allow automakers to shift to an American-made battery and obtain federal credits. The company so far has no automotive contracts, though a commercial vehicle battery has been in production.
Ford BlueOval Battery Park Michigan
Ford Motor Co. announced in early 2023 that it would build this EV battery factory, a wholly owned subsidiary, in Marshall. The factory is the first construction at the 1,900-acre Marshall Megasite. Ford has said it will build lithium iron phosphate (LFP) batteries there, using licensed technology from Contemporary Amperex Technology Co. (CATL), the largest Chinese EV battery maker. The automaker paused the project last fall, but restarted it year-end. But its capacity is about one-third less than announced.
Planned company investment: $3.5 billion. Ford has not updated that number since the project was downsized, a move that prompted speculation that the smaller site would then cost about $2 billion
Promised state subsidy: $853.37 million: $210 million to Ford; the rest to the Marshall Area Economic Development Alliance as Strategic Site Readiness Program awards, a state allocation, three build-ready grants and $36 million loan.
How much Michigan has spent: Estimated $314.6 million
Additional incentives: Local tax breaks; $330 million allocated by the Michigan Department of Transportation for road changes, with $2.1 million spent; 15-year tax-free Renaissance Zone.
Hiring plan: Initial 2,500 worker target was reduced in fall 2023 to 1,700
Hiring outlook: Ford has been hiring early launch staff, including program managers and an engagement specialist
How the company is doing: Ford officials said in April that lower-cost batteries will be key to the company turning a profit from its money-losing EV division. That may mean LFP batteries, such as what’s planned in Marshall. Ford profitability rests today with its legacy product lines, including commercial trucks. Ford lost more than $100,000 on each EV it sold during the first quarter.
What comes next: Construction is continuing. Ford maintain its original opening target of 2026. A citizen group opposing the rezoning for the megasite continues with litigation over the site’s rezoning; it seeks to put the question to voters, which it says was improperly denied by the city of Marshall.
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