A U.S. subsidiary of Chinese battery maker Gotion High-Tech has dropped plans to build a $2.4 billion electric vehicle battery materials plant in Michigan, the state’s economic development agency said Thursday. The project, initially announced in 2022 and expected to create over 2,300 jobs, faced intense political opposition over the company’s Chinese ownership.
According to the Michigan Economic Development Corporation (MEDC), Gotion’s U.S. arm never received any portion of a $125 million state grant, and the state will now seek repayment of $23.6 million already allocated for land acquisition. The MEDC confirmed the project had been inactive for over 120 days, triggering a default under its grant agreement.
Gotion is partly owned by Volkswagen, which holds roughly 30% of Gotion High-Tech, but U.S. lawmakers have maintained that the Chinese government retains “effective control” through individual shareholders. Political resistance, coupled with rising scrutiny of Chinese investments in U.S. critical industries, has fueled controversy surrounding the project.
Gotion’s spokesperson, Benjamin Howes, said the company remains committed to its U.S. clean energy goals, citing continued operations at its Illinois plant. However, in a letter seen by Reuters, the company’s lawyer denied that it had abandoned the Michigan site, arguing instead that local hostility and political “attacks” made progress impossible.
The project’s collapse reflects broader headwinds for the U.S. EV sector. Diminished consumer demand and new Trump administration policies scaling back EV incentives have prompted automakers to delay or cancel several large-scale battery investments.
Republican Representative John Moolenaar, who led opposition to the project, praised the state’s withdrawal of support, calling it “a victory for American taxpayers and national security.”
