Gotion High-Tech, whose biggest investor is Volkswagen Group, has confirmed that the Chinese electric vehicle battery giant will build a USD2.4 billion battery project in Michigan over one year after the local governor's announcement.
The project, to be located in Green Charter Township, Mecosta County, will likely cover an area of about 276.4 acres, the Hefei-based firm announced yesterday. Construction is scheduled to be completed on Dec. 31, 2031, it added.
The information disclosed is generally consistent with the statement released by Michigan Governor Gretchen Whitmer on Oct. 5 last year. Gotion will build a factory in Big Rapids to produce up to 150,000 tons of lithium-ion battery cathode material and two plants with an annual output of 50,000 tons of anode material a year, said Whitmer.
Gotion signed the purchase deal for the project's land, while its US unit inked a Critical Industry Program Grant Agreement, Strategic Site Readiness Program Development Agreement, and others with the Michigan government on Oct. 24, the parent firm noted. The expected investment by stage and subsidies planned by the state have been finalized, it added.
New energy lithium-ion battery demand in North America is growing with the global expansion of the new energy industry, Gotion pointed out. The US government's Inflation Reduction Act and gradually issued regulations will encourage and support local development of the sector's supply chain, it noted.
Building the anode and cathode material factory in Michigan aims to refine the North American supply chain and secure the production and supply of lithium-ion batteries in the region, Gotion said. As construction on the project will last for a long time, it may face other uncertainties, impacted by factors such as geopolitics and trade protection changes, it added.
Founded in 2006, Gotion's installed capacity reached 6.04 gigawatt-hours in the first half of this year, ranking fifth in China with a 4.2 percent market share, according to data from CGII. Its batteries will be installed on Volkswagen's cars in Europe next year. Established in 2014, its US subsidiary mainly sells, researches, and develops power batteries.
The US Inflation Reduction Act, which came into effect in August last year, has imposed harsh restrictions on the local production of battery raw materials and components for US consumer purchases of clean energy vehicles, according to analysts. This has benefited South Korean firms, the biggest overseas rivals to Chinese battery companies, they added.
Gotion's shares [SHE: 002074] fell 1.9 percent to CNY21.47 (USD2.93) apiece as of 11 a.m. in Shanghai today.
