[Asia Economy Beijing=Special Correspondent Kim Hyun-jung] A Chinese electric vehicle battery company is investing about 3 trillion won to build a battery material production plant in the United States. The state of Michigan, where the plant site is located, is providing support worth about 1 trillion won.
On the 6th, Chinese local economic media Caixin cited an announcement from the Michigan state government, reporting that "China’s Gotion High-Tech will benefit from Michigan’s incentive package." Gotion High-Tech has applied for support from the state government along with a plan to invest approximately $2.36 billion (about 3.33 trillion won) to establish an electric vehicle battery material plant in Michigan.
On the same day, the state government’s strategic fund board approved a subsidy of $175 million related to the construction of the plant and indirect support measures worth $540 million, including land use changes and tax reductions. According to reports, the planned investment of $2.36 billion is expected to be fully invested within six years after groundbreaking, with completion targeted for 2030.
The plant aims to produce a total of 200,000 tons annually after completion, including 150,000 tons of cathode materials and 50,000 tons of anode materials. Cathode and anode materials are key components of electric vehicle batteries. The company also announced plans to create a total of 2,350 jobs. However, the final assembly location of the produced parts has not been disclosed but is known to be located in North America.
Under the U.S. Inflation Reduction Act (IRA), which has been in effect since August, the U.S. provides subsidies of up to $7,500 only for electric vehicles that are finally assembled domestically. The IRA reduces the tax credit amount for electric vehicle batteries that use critical minerals and components not produced in the U.S. Since then, automakers have been competing to insource more battery and component production. Gotion Global stated in a press release, "We are committed to producing world-class lithium batteries in North America and providing high-quality products."
Gotion High-Tech was established in 1995 and listed on the Shenzhen Stock Exchange in 2006, ranking fourth in China’s electric vehicle battery production. In 2020, Volkswagen invested and became the largest shareholder with about a 26% stake. The U.S. subsidiary is located in California.
The company’s main products include lithium iron phosphate materials and has recently been gaining attention for producing batteries for electric vehicles. According to major foreign media, Gotion previously announced that by 2025, it will allocate one-third of its production capacity outside China to respond to the rapidly increasing demand for electric vehicles.
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