Gotion exec: $2.4 billion EV battery plant in Michigan 'not a done deal'

Gotion Inc. hopes to move forward with a $2.4 billion EV battery parts plant in the Big Rapids area, but it has a backup plan that could involve leaving the state if the deal falls apart, said Chuck Thelen, the company's vice president for North American operations.

Since announcing the plant and plans to create 2,350 jobs last year, the Chinese battery manufacturer has run into some resistance that has caused it to delay construction and reconfigure the factory footprint.

The company has remained largely silent amid the uncertainty, but in a Thursday interview Thelen opened up about how Gotion is responding to opposition, offering details of the planned factory and how it fits into the company's quest for EV battery dominance — if it comes to fruition.

"A project of this scope takes an awful lot of due diligence, and we're still performing that, so it's not a done deal," Thelen said. "We are still going through the discussions with the state and the township and the county and making sure this is all still a good fit."

The plant, which would be the company's first in the U.S. and would make anode and cathode materials for EV batteries, was originally pitched as several buildings totaling 2 million square feet, straddling two townships in Mecosta County. After Big Rapids Township board members voiced concerns over its ties to China and impact on the water table and environment, the company turned its focus solely onto Green Township.

Thelen said the investment amount and number of jobs created would remain the same in the altered plan.

"If the local population is not wanting the project, and we're not going to be afforded to be a good corporate citizen, then we would not choose that location, right, that just makes sense," he said, adding that he is still in talks with Big Rapids Township and "hopeful" about reaching a resolution.

Thelen declined to comment on how political tensions between the U.S. and China might be affecting the project.

Gotion, based in Shanghai and partly owned by Volkswagen, is the world's sixth-largest battery manufacturer with ambitions to be a bigger player. Key to that plan is expansion in the U.S., starting in Michigan.

Thelen said the company surveyed 44 locations around the U.S. before landing on the Big Rapids area site, due to the cost and availability of land, labor pool and proximity to Ferris State University, which would serve as the main job training pipeline.

The company considered existing buildings, including old General Motors and Ford Motor Co. plants around the country, but none were tall enough, Thelen said. The cathode and anode manufacturing process requires large mixing vats and ceilings at least 70 feet high. The typical manufacturing plant is no taller than 50 feet.

"So to use a brownfield really didn't lend itself to this operation," he said.

Construction of the plant in West Michigan is on hold until a host of permits are approved, including from the Michigan Department of Environment, Great Lakes and Energy, for wetland mitigation and moving land.

"We've had long conversations with EGLE and we have a tentative agreement for the site layout based on minimizing any wetland impact," Thelen said.

The company is also still awaiting approval of $715 million in state incentives. Thelen said he expects "final discussions" to take place next week.

Additionally, the project hinges on the ability to bring power and water to the newly configured footprint. Thelen said he is in discussions with Consumers Energy Co. about securing utilities on the site.

Water hookup remains a hurdle, as the original plan relied on buying 115 acres from Big Rapids Township with a water tower and a pair of 12-inch, ready-to-use wells. Some in the township expressed concerns that the plant would suck up all of its water, but Thelen said that is not the case.

The executive said he believes he can eventually allay worries.

"I do owe them some more conversations about some of their concerns," he said. "I think their concerns about water use might be misplaced."

If the plan moves forward, construction could start in the second or third quarter of this year, with a build duration of roughly two years.

"We wish to start quickly. It's all dependent on the state and local governments," he said. "But we do not have a final obligation from either side yet."

Thelen, who worked at Bosch for more than 20 years before joining Gotion, would serve as the plant manager. He recently moved from Oakland County to Mecosta County.

The plant would ultimately be overseen by parent company Gotion High-Tech Co. Ltd, whose C-suite and board members are based mostly in China.

Thelen said he is in charge of hiring managing directors at the plant, which he hopes to complete by the end of the year. He said the goal is to have primarily American workers, with an emphasis on local recruiting, but some key positions will require multilingual speakers to coordinate with sites in China, Germany and India.

He said it is not known whether workers at the factory would be represented by a union.

Most of the product from the factory will be supplied to Gotion plants that make final batteries, and the rest would be supplied externally, Thelen said. The company's battery plants are in China, but it recently built its first foreign plant in Germany.

Thelen did not detail the company's overall U.S. investment plans or say if Michigan could be in play for future investments.

"We are looking to be an international player, bringing the expertise that's already been defined in the China market to the rest of the markets," he said. "A lot of wonderful work has gone into many patents, not just for product but also process. We plan to bring that expertise and high-quality workmanship to the United States."