BEIJING, September 12 (TiPost)— Gotion High-tech Co., Ltd., one of China’s leading electric vehicle (EV) battery makers, is going to make another major investment in the United States in less than a year.
Gotion and officials of the Illinois state government announced the Chinese company will locate its new state-of-the-art $2 billion EV lithium battery manufacturing plant in Manteno, a village Kankakee County. The plant is expected to begin production in 2024 and create 2,600 jobs in the village in northeastern Illinois. Gotion’s gigafactory is the largest EV battery production investment in Illinois to date, and a testament to Illinois status as a leading destination for companies and investors who want the most talented workers, the best transportation systems, and a collaborative economic growth mindset from their partners in government at all levels, said the state governor JB Pritzker.
The facility, covering approximately 150 acres, will focus on lithium-ion battery cell, battery pack production, and energy storage system integration. Once completed, the facility is expected to produce 10 GWh of lithium-ion battery packs and 40 GWh of lithium-ion battery cells, which will strengthen the American EV battery supply chain.
Illinois said Gotion selected the state to locate its factory due to a comprehensive incentive package including the Reimagining Energy and Vehicles (REV) incentive agreement and its new Invest in Illiois Fund. The state will grant an incentive package totaled $536 million to Gotion. Through REV, Gotion is eligible to receive tax benefits totaling $213 million over 30 years. The REV agreement specifies a minimum company investment of $1.9 billion and the creation of 2,600 full-time jobs that are paid at least 120% of the average wage of similar job classifications in Kankakee County. Gotion will also be the first recipient of Invest in Illinois funding in the amount of $125 million in capital funding to the company. The Fund was signed into law in early 2023 to make Illinois more attractive when vying for large projects in highly competitive sectors like clean energy.
Gotion’s new facility will promote application of Lithium iron phosphate batteries to reduce costs for American EVs that mainly empowered by nickel-cobalt-manganese ternary lithium batteries, thereby accelerating cultivation of the EV market in the United States. It also will help Gotion’s overseas expansion, especially expansion into U.S. customer base. “We believe that Gotion's battery technology will help to boost e-mobility in North America and the economic and trade exchanges between China and the U.S.,” said Gotion Chairman Li Zhen.
Gotion, backed by Volkswagen China as the largest shareholder, has just settled its new plant in Michigan last year. The company announced in October 2022 that it will invest $2.36 billion to set up a plant and create 2,350 local jobs in Big Rapids, Michigan. The facility is expected to produce up to 150,000 tons of cathode material and 50,000 tons of anode material a year. Gotion will receive about $715 million in financial incentives from Michigan.
Gotion’s investments took the advantage of the Biden administration’s EV boost. The Inflation Reduction Act (IRA) passed by U.S. Congress in August 2022 imposes requirements on a $7,500 EV tax credit designed to spur North American production of vehicles and battery components. The act requires 50% of the value of battery components to be produced or assembled in North America to qualify for a $3,750 credit and 40% of the value of critical minerals sourced from the United States or a free trade partner also for a $3,750 credit. Automakers are racing to in-source more battery and component production.
Gotion was ranked the ninth biggest battery maker by battery usage. It installed 7.8 gigawatt-hours (GWh) of batteries from January to July 2023, increasing 10.6% from a year ago, according to SNE Research. Data from the South Korea-based market research firm showed Gotion had 2.1 % of global EV battery market, down 0.8 percentage points year-over-year. Gotion is the top battery supplier for Chinese automakers JAC Motors and Chery, and became a new supplier for Guangzhou Automobile Group Co., Ltd. (GAC)’s EV brand Aion this year.