With obstacles to Gotion’s EV battery plants mounting, panel including Rep. Darin LaHood demands a halt – Wirepoints

By: Mark Glennon*

A panel convened last week in Michigan discussed growing problems for Gotion’s electric vehicle battery factory plans for Manteno, Illinois and Green Charter Township, Michigan. Gotion is the Chinese company tied to the Chinese Communist Party (CCP), slated to receive over $8 billion in state and federal subsidies for its Manteno project.

With risks to the project multiplying, an obvious question is why Gotion would press ahead. We’ll get to a possible answer, but first, more about the panel and new issues.

Rep. John Moolenaar (R-Michigan) chaired the panel that included Darin LaHood (R-Illinois), various experts on the CCP and representatives of citizen opposition groups in Illinois and Manteno. Moolenaar chairs the U.S. House Select Committee on the CCP, on which LaHood sits. Video of the panel is here.

China “plays by a different set of rules and standards,” LaHood said, and “The CCP is attempting to infiltrate and dominate American supply chains.” He quoted Albert Einstein, saying, “If I were to remain silent, I’d be guilty of complicity.”

The panel discussed most of the recently developing obstacles to the Gotion projects:

• Opponents who sued to stop the Manteno plant are enthused by a recent hearing on their lawsuit. The case is being heard by a conscientious judge, Lindsay Parkhurst, who is taking the time to read the voluminous case presented by opponents alleging zoning law violations and chemical dangers, and she appeared receptive to the lawsuit. A decision on whether to allow the case to proceed is expected on September 30.
• The U.S. Department of Defense has prohibited the military from purchasing batteries made by Gotion and five other Chinese companies.
• The U.S. Treasury Department in June issued a proposed rule expanding scrutiny over Chinese land purchases near sensitive U.S. military facilities. The expansion would include Gotion’s Michigan project. While the rule would not likely apply retroactively to Gotion’s current plans there, the expansion could raise issues. The Manteno plant will be dependent on the Michigan plant for parts.
• A group in Congress in June presented evidence alleging that Gotion benefits from forced labor in China and demanded a ban on Gotion imports.
• A recent U.S. Supreme Court decision strictly limits rule making by federal agencies. It’s now widely thought that federally mandated average vehicle emission limits may be invalidated, which would pull the rug out from under a main driver of the push to EVs.
• EV sales continue to languish. While sales continue to beat prior years, EV makers are suffering huge losses and sales are not growing fast enough to get them to profitability in the foreseeable future.
• If Republicans prevail in November’s election for the White House and Congress, both Gotion deals would likely die. Moolenaar and LaHood already have legislation pending to kill the deals. Their No Gotion Act would take away the federal tax credits, likely making the projects unviable.

Those obstacles are in addition to problems that have vexed the projects from the start. Gotion, which will own the plant, is a Chinese company with multiple ties to the Chinese Communist Party. Taxpayers will be on the hook for over $8 billion in subsidies to the Chinese company, comprised of $536 million from the State of Illinois plus $7.5 billion from federal taxpayers – for a project that will cost Gotion just $2 billion. Local residents in and around Manteno, Illinois, where the project is sited, fear hazardous chemicals they say will be used at the plant.

For those reasons and more, opposition quickly organized in Manteno. Earlier polling showed statewide opposition to the plant at nearly two-to-one, and still stronger around Manteno. In Michigan, a similarly sized Gotion battery project on a similar timeline met the same levels of resistance. The Michigan plant is needed by Gotion to supply parts for the Illinois plant operation.

Gotion responded to the panel by essentially denying categorically all criticisms. The company’s full statement is here.

Why would Gotion plow ahead in the face of so many threats to its Manteno project? Here’s one good reason: Gotion is playing with the house’s money. taxpayers are paying Gotion along the way.

The State of Illinois has already paid Gotion at least $125 million on its $536 million subsidy. That bought the land but there has been little else happening at the site. And if the project is finished and stays in operation, Gotion will have been paid about four times its costs when you include the federal tax credits.

No risk. All upside. Nice deal if you can get it.

*Mark Glennon is founder of Wirepoints.

UPDATE 7/29/24: Gotion has amended its Foreign Agents Registration Act filing to say that it is partially funded by the Peoples Republic of China.