Illinois finally lands a big EV battery plant

Illinois finally has struck paydirt in its years-long drive to lure a major electric vehicle battery plant here.

Sources in both state government and the EV industry confirm that Gotion, a Chinese battery maker that earlier announced plans to open a plant in Michigan, has decided on Manteno in Kankakee County for a second, related $2 billion facility.

The Michigan facility will make components that will be assembled into battery packs in Manteno, 50 miles South of Chicago. About 2,600 workers will be employed when the Manteno plant is fully up to speed.

The decision comes at a cost, with the state promising $536 million in economic incentives and local governments making property tax concessions. But Illinois Governor J.B. Pritzker in a phone interview strongly argued that the expenditure is worth it, with the project to be one of the largest new industrial developments in the state in decades and in position to anchor Illinois’ status in the fast-growing EV business.

"It's a big deal. We're thrilled," said Pritzker. "It will be very helpful in dealing with other companies."

Pritzker gave no details, but industry sources have been reporting for a while that two other battery makers have been discussing major investments here. Illinois had been in negotiations with Gotion for two years, Pritzker said.

Pritzker said the state had many things to offer Gotion, but the "deal closing fund," approved last year by the General Assembly, was critical. "It sent a signal to the nation and the world that Illinois is open for business," he said.

Illinois already has two EV assembly plants, Rivian’s factory in Normal and Lion Electric’s facility in Joliet, which makes buses and other commercial vehicles. Just as important, the state has been in extensive discussions with Stellantis, the parent company of Dodge and Jeep, about converting its now shuttered Belvidere plant to make EVs and hopes to eventually get Ford to convert or replace its Torrence Avenue factory on Chicago’s South Side to EV production.

“This is a big win for Gov. Pritzker and Illinois, which has made major strides in revamping the package of incentives to make us competitive with neighboring states,” Illinois Manufacturers’ Association President Mark Denzler said in an email. "The IMA worked with the governor and lawmakers on both sides of the aisle to pass these changes in the General Assembly, and it’s great to see today’s announcement of significant new jobs and capital investment that are a direct result of these new laws."

As previously reported, the new plant — like plants in other states — will receive a wide range of state and local tax breaks and other subsidies.

The biggest chunk, $213 million in payroll tax credits, will be paid over 30 years, assuming Gotion meets stated hiring goals of creating 2,600 full-time jobs that pay at least 120 percent of the average wage of similar jobs in Kankakee County — putting salaries at $55,000 — and that the company invests at least $1.9 billion here.

In addition, the company will be the first beneficiary of Pritzker’s “deal closing fund,” receiving $125 million in capital funds. And the state will finance a new job-training academy nearby to prepare workers at the plant.

Local property taxes on the now-mostly vacant site will double to just under $2 million a year but then be capped at that level for 30 years. The abatement already has been approved by Kankakee and nine other local governments.

The Manteno site includes a warehouse formerly used for distribution by the defunct Kmart retail chain, which now produces about $1 million a year in property taxes.

In Michigan, Gotion announced plans last fall to build a $2.4 billion battery parts plant near Big Rapids after the state of Michigan offered an incentive package valued at $715 million. The Michigan project has generated some controversy because of questions about the company’s ties to the Chinese government.

Pritzker shrugged off complaints that Illinois should not be doing business with a Chinese-owned firm. In fact, despite such "idealogical" gripes, Gotion does business all over the world with many companies and is based in California. "Michigan was glad to have Gotion. Illinois is glad to have Gotion," he said.