• Michigan economic officials say the Gotion project near Big Rapids is dead 
• The state had spent $23.6 million in land for the project and will try to recoup those costs
• ‘This is not the outcome we hoped for,’ Michigan officials say

Gotion Inc.’s plans to build a $2.4 billion electric vehicle battery plant near Big Rapids are dead, following years of lawsuits, delays and controversy over the firm’s ties to China.

Michigan officials on Thursday released a letter stating the company was in default of its agreement with the state, which had pledged $175 million to the company and purchased 270 acres for the project in Green Charter Township.

“This is not the outcome we hoped for,” the Michigan Economic Development Corporation said Thursday in a statement.

The state will now pursue repayment of $23.6 million spent on the land Gotion had planned for the factory. The rest of the funding had not been used.

Michigan economic officials told Bridge Michigan this month there was no change in the status of the project, even though the default letter sent to Gotion was dated Sept. 17.

Related:

• Michigan donors — and Gotion — pumped millions into Trump inauguration
• Big Rapids Twp. eyes life after Gotion; could cash in on state-bought land
• Warning of China threat, Trump and Michigan Republicans bash EV battery plant

Announced with fanfare in 2023, the project was expected to create 2,350 jobs. It was beset with controversy from the start and became an issue in the 2024 campaign for president because Gotion is a US subsidiary of the Chinese company Gotion High-Tech Inc.

The release of the letter comes after Gotion replied to the state on Oct. 15, saying it was “shocked” by the default and sought a six-month delay.

“It is even more surprising that the state of Michigan suggests that Gotion has ‘abandoned’ the project considering the immense challenges that Gotion has experienced in Michigan,” wrote the company’s attorney, Mark Heusel of Dickinson Wright, in the letter.

It is the second major project to die in the past few months in Michigan, following Sandisk’s decision in July not to build a $63 billion semiconductor plant in Genesee County.

The Gotion project was also one of the higher-profile beneficiaries of Gov. Gretchen Whitmer’s signature economic development program, the $2 billion Strategic Outreach and Attraction Reserve.

The Legislature defunded the program earlier this month.

Senate Majority Leader Winnie Brinks, D-Grand Rapids, said in a statement sent to Bridge she is disappointed Gotion “did not live up to its commitments” but Michigan must “double down to create better, more effective tools to attract and retain high-wage jobs.”

“The overall goal is and always has been to create good jobs that people want to come to and stay in Michigan for – jobs that anchor good neighborhoods and schools and communities – and that remains my objective,” she said.

Activists near Big Rapids opposed the project because of its size, potential impact on the environment and worries about its viability. They cheered the news of the project’s demise on Thursday.

“Thank you,” said Marjorie Steele, who founded the Economic Development Responsibility Alliance .

“It’s about damned time.”

Steele said residents felt railroaded by local officials who “colluded” with the state to finalize the project. Opposition was ignored, she said, as local officials and the state officials rubber-stamped the project.

“What the MEDC tried to pull here in Big Rapids was just so egregious,” Steele said.

Voters in Green Charter Township recalled township officials who supported the project in 2023, electing members who rescinded support for the project and prompting a lawsuit with Gotion.

The company’s attorney blamed the litigation for slowing the project. In the letter to the state, Heusel wrote that the opposition was “politically motivated” and “due solely to racist and ethnically charged stereotypes.”

Rep. Tom Kunse, R-Clare, said the project was ill-conceived and lacked transparency, despite the tax subsidies.

“This is yet another example of why corporate welfare doesn’t work. Taxpayer funded incentive deals often fail to deliver on promises, leaving our communities with broken commitments and wasted public dollars,” said Kunse, whose district includes the Gotion site.

The next step is unclear. Rich Studley, the former president and CEO of the Michigan Chamber, said he has “zero confidence” Michigan will recover the millions spent on the land or “or that they won’t do it again.”

“I’m not happy that we missed an opportunity to encourage job creation and economic growth in the Big Rapids area,” he added. “But, it is encouraging to see the (state) and Gotion held accountable.”

The Gotion announcement comes amid ongoing questions about the future of Michigan’s economic development programs, particularly SOAR.

The largest SOAR projects have received about $1 billion of $1.5 billion in promised state funding, but so far have yielded zero of the more than 13,000 jobs promised.

State officials have said hiring was a long-term goal, in many cases giving the companies awarded SOAR funds several years to reach their goals.

However, the projects also have experienced delays and other issues.

Ford Motor Co. shrunk its Marshall plans. Our Next Energy — which received approval of its $200 million SOAR award on the same day as Gotion — recently announced a downsizing in Van Buren Township. General Motors sold its new EV battery factory near Lansing to partner LG Energy Solution, which plans a different product there. Another Ford project was never finalized after it was announced.

Business Watch