Michigan wants $750 million to prep site for Ford EV battery plant on top of $1 billion incentives deal

LANSING — Michigan economic development officials on Wednesday asked lawmakers to allot $750 million to buy land, upgrade infrastructure and do other work in support of Ford Motor Co.'s new $3.5 billion, 2,500-job electric vehicle battery factory in Marshall, 108 miles Wes of Detroit, bringing total state incentives for the project to nearly $1.8 billion.

The proposed site-readiness spending needs legislative approval. It is on top of a $1 billion package that the Michigan Strategic Fund Board authorized last week for the Dearborn-based automaker, including a $210 million grant — which also requires legislative authorization — and a tax break worth $772 million over 15 years.

The $750 million allocation from the Strategic Outreach and Attraction Reserve Fund would include:

• $330 million for the Michigan Department of Transportation and the Marshall Area Economic Development Authority to improve roads.
• $224.7 million for the MAEDA and Detroit-based Walbridge to make the site "pad ready," including demolition, remediation, grading, tree clearing, utility relocation, interior roads and installation of a storm water management system.
• $100 million for the MAEDA and Marshall to extend water mains, expand a wastewater treatment plant and partner with Battle Creek to supply treated water.
• $75 million to the MAEDA for land acquisition.
• $15 million to the MAEDA and Norfolk Southern Corp. for rail improvements.
• $5 million to the MAEDA and Marshall to contract for full-time permit processing and inspections staff for up to five years and to waive building permit fees for Ford.
• $300,000 to the MAEDA, Marshall and a private provider to extend a fiber optic system to the megasite and add another one.

"Not a dime of that will go to Ford," Michigan Economic Development Corp. CEO Quentin Messer Jr. told members of the Democratic-led House Appropriations Committee.

Landing Ford's investment, he said, "allows us to accelerate what we would have had to have done to secure any project for this site. This site has been something that has been marketed, it's been inspired and hoped for for at least 10 to 15 years. Having the BlueOval Battery Park Michigan is accelerating our ability to get this together. We're also playing a bit of catch-up. Other states have been doing this for years — in fact, several decades. But we have a plan that is timebound. Were this body to act, we will be right on time to be able to satisfy the requirements of Ford."

Legislators on the panel asked many questions, including about Ford's partnering with the world's largest EV battery supplier, China-based Contemporary Amperex Technology Co. Ltd. The tie has drawn scrutiny.

"It is not a joint venture. Ford is simply licensing technology to make these batteries. The government of China has no role in the project, and no tax dollars will go to the company licensing us the technology," said Chris Smith, Ford's chief government affairs officer.

But Rep. Andrew Fink, a Republican from Hillsdale County's Adams Township, said CATL would benefit even if it does not directly get state funds.

"They're going to receive money because of the appropriation. That just cannot be denied, or they wouldn't be participating," he said. "I'm sure you're aware that the Chinese national intelligence law requires all Chinese companies to cooperate with the intelligence-gathering operations of the Chinese government, which is wholly controlled by the Chinese Community Party. We can't talk about this seriously by simply saying, 'Well, they're not going to be a direct recipient.' I mean, what is the substantive reason that we shouldn't be concerned about the presence of an entity that is legally subject to the control of the CCP according to the laws of their own country?"

Smith said CATL is the "one company" that can provide technical service so Ford can build lithium iron phosphate batteries in the U.S. Those batteries currently are being imported, he said.

"That's very, very important for Ford and I think very much aligned with some of the supply chain national security concerns that we will be having as a company, as a region, as a state, as a nation," he said.

Ford, he added, always has to take security seriously and protect U.S. technologies and intellectual property regardless of whether it has a provider like CATL or not.

The committee did not vote Wednesday.

Assuming the $210 million grant is authorized, remaining money in the SOAR Fund will effectively be spoken for. Democratic Gov. Gretchen Whitmer, a supporter of the Ford project, recently proposed adding $800 million to the account and then an additional $1.5 billion over three fiscal years.