Michigan Demands $23.6 Million Repayment as Gotion EV Battery Plant Deal Collapses

Lansing, Michigan – The state of Michigan has officially terminated its incentive agreement with Gotion Inc. for a proposed $2.36 billion electric vehicle battery plant, demanding the repayment of $23.6 million in previously disbursed site readiness funds. The Michigan Economic Development Corporation (MEDC) notified Gotion of default, citing the company's failure to meet contractual obligations and a prolonged cessation of project activities. This development marks a significant setback for a project initially championed by Governor Gretchen Whitmer's administration.

The MEDC confirmed the termination after Gotion failed to cure its default by the October 17 deadline, which stemmed from a September notice. The state accused Gotion of abandoning the project, noting a lack of "eligible activities" on the site for over 120 days and ongoing litigation as contributing factors. While the state had allocated $125 million in Critical Industry Program grants, none of these funds were ever disbursed to Gotion due to unmet milestones.

The Gotion project, announced in 2022, was slated to create 2,350 jobs in Green Charter Township, Mecosta County, and was initially supported by over $700 million in state incentives. However, it faced intense local opposition, fueled by environmental concerns and allegations regarding Gotion's ties to the Chinese Communist Party. This local backlash led to the recall of supporting township officials and subsequent legal challenges, including Gotion suing the township after water supply approval was rescinded.

Republican lawmakers and national figures, including U.S. Rep. John Moolenaar and former President Donald Trump, have been vocal critics of the project, citing national security risks. The collapse of the deal is expected to intensify scrutiny on Michigan's corporate subsidy strategies, particularly the Strategic Outreach and Attraction Reserve (SOAR) fund. As James David Dickson stated in a social media post, "This hearing Wednesday is nothing but bad news for Gretchen Whitmer," further questioning the Lansing media's coverage of the controversial project.

The MEDC stated that while this was "not the outcome we hoped for," it underscored the responsibility to ensure public funds are spent wisely. The state will actively pursue the repayment of the $23.6 million, while $26.4 million in unspent site readiness funds will be returned. This termination signals a re-evaluation of large-scale incentive programs in Michigan and their long-term viability.