A Chinese battery giant’s plans to build a massive Michigan manufacturing plant have officially collapsed, with the state now demanding millions back after years of grassroots opposition, Chinese ownership controversies, and Trump administration policy shifts killed what was once touted as Northern Michigan’s largest economic project ever. Gotion Inc. abandoned its $2.4 billion electric vehicle battery materials plant near Big Rapids after Michigan officials declared the company in default and terminated all state incentives worth $175 million.

The failure marks the latest casualty in America’s troubled push for domestic battery manufacturing, coming just weeks after the September 30 expiration of federal EV tax credits that had promised to fuel the industry’s growth. For EV owners and enthusiasts watching the battery supply chain struggle to establish itself on American soil, Gotion’s collapse raises serious questions about whether Chinese technology and capital remain welcome in the U.S. market—or even necessary.

From $175 Million Promise To Complete Collapse

Michigan’s economic development agency announced Thursday it’s pursuing repayment of $23.6 million already spent on land purchases while suspending a separate $125 million grant that was never disbursed. The Michigan Economic Development Corporation sent Gotion a default notice in September after determining no construction or development activities had occurred on the 270-acre site for more than 120 consecutive days.

When Governor Gretchen Whitmer celebrated the October 2022 announcement, the project promised 2,350 factory jobs paying $62,000 annually—more than 50% above the local median income. The plant would have produced 150,000 tons of cathode materials and 100,000 tons of anode materials annually for EV batteries. But local opposition erupted almost immediately, focused on both environmental concerns and the company’s Chinese ownership structure.

The Michigan Strategic Fund’s September 17 letter to Gotion cited both the project abandonment and ongoing lawsuits as constituting “material adverse effect” violations of the grant agreement. The state gave Gotion 30 days to cure the defaults. That deadline passed October 17 with no resolution.

Local Rebellion Defeats State And Corporate Alliance

The Gotion saga became a case study in grassroots political power defeating entrenched interests. In November 2023, Green Charter Township voters recalled all five township board members who had supported the project, replacing them with officials openly opposed to the development. The new board subsequently rescinded support and, critically, voted to cut off access to water infrastructure essential for factory operations.

Marjorie Steele, founder of the Economic Development Responsibility Alliance that led the opposition, told reporters “What the MEDC tried to pull here in Big Rapids was just so egregious.” Residents organized protests, packed public meetings, and plastered the area with anti-Gotion yard signs, creating a political climate that made construction impossible.

Gotion fought back with a March 2024 breach of contract lawsuit against Green Charter Township. A federal judge granted Gotion an injunction in May 2024 requiring the township to honor the original agreement, but the township appealed. The legal battles stalled the project completely, with Gotion pausing environmental studies and state permitting applications.

In its October response to the state’s default notice, Gotion’s attorney Mark Heusel called the accusations “utterly false” and blamed “racist and ethnically charged stereotypes” for the township’s breach. He argued that ongoing legal expenses, property taxes, and site maintenance constituted “eligible activities” under the grant agreement, and requested a six-month suspension to negotiate an “open and candid discussion about the viability of the project.”

Political Opposition Centered On Chinese Communist Party Ties

The project became a flashpoint for growing U.S.-China tensions and skepticism about Chinese investment in critical industries. Congressman John Moolenaar, a Michigan Republican who chairs the House Select Committee on China, emerged as the project’s most prominent opponent. Moolenaar introduced legislation blocking companies like Gotion from receiving EV tax credits under the Inflation Reduction Act—a bill that President Trump signed into law earlier this year as part of the “Big Beautiful Bill”.

Critics pointed to Gotion’s corporate structure and Chinese government connections. While Germany’s Volkswagen owns approximately 30% of Gotion High-Tech’s parent company, U.S. lawmakers maintain that China retains “effective control” through multiple individual shareholders. The company’s ties to Chinese Communist Party activities, including employee visits to party memorials and executives attending political study sessions, fueled suspicions among opponents.

Moolenaar praised Thursday’s announcement, stating the people of Green Charter Township “can finally move on from Gotion’s lies and broken promises.” For supporters of domestic battery production, the congressman’s rhetoric highlighted the impossible political environment Chinese companies now face in the United States.

Illinois Plant Proceeds While Michigan Dreams Die

The stark contrast between Gotion’s Michigan failure and its Illinois success reveals how location and local politics determine project viability. Gotion’s $2 billion Manteno, Illinois plant began production in late 2024 and has hired approximately 150 employees toward a target of 2,600 workers. The facility converted a former Kmart distribution center into a battery assembly plant producing both EV battery packs and energy storage systems.

Benjamin Howes, Gotion’s head of corporate and public affairs, said the company “remains firmly committed to its mission of driving America’s clean energy future” including at the Illinois facility. The Illinois project received $536 million in state incentives, though it too faced local opposition, including anti-Gotion candidates winning April 2025 municipal elections in Manteno.

The key difference: Illinois officials maintained support through the political turbulence, and manufacturing started before opposition could build sufficient momentum. Michigan’s project never broke ground, allowing resistance to calcify and spread.

Part Of Broader Chinese Battery Retreat From America

Gotion’s Michigan collapse fits a troubling pattern for U.S. battery manufacturing ambitions. EVXL has documented multiple Chinese-backed battery projects failing or stalling in recent months. In June, another Chinese-owned manufacturer AESC halted work on a $2 billion Kentucky plant and paused construction on a separate $1.6 billion South Carolina facility originally designed to supply BMW.

The timing couldn’t be worse for the U.S. EV industry. Federal EV tax credits worth up to $7,500 expired September 30, 2025, eliminated under Trump’s tax reform legislation. The loss of both consumer incentives and manufacturing tax credits has triggered exactly the industry contraction many analysts predicted.

Ford’s Michigan battery plant using CATL technology survived only after months of political battles over Chinese licensing deals. Rivian recently laid off 600 workers—its third workforce reduction in four months—directly citing the expired tax credits and weakening EV demand.

For automakers like Ford and GM racing to build domestic battery capacity, the collapse of Chinese investments leaves a critical gap. Chinese companies including CATL, BYD, and Gotion possess the world’s most advanced battery manufacturing technology and lowest production costs. Without Chinese capital and expertise, American battery production faces both technical challenges and cost disadvantages that could take years to overcome.

EVXL’s Take

We’ve been tracking the slow-motion collapse of Chinese battery investments in America for months, and Gotion’s Michigan failure was entirely predictable. When we covered Ford’s battles over its CATL-licensed Michigan plant back in May, the political writing was already on the wall: Chinese battery technology might be essential to the EV revolution, but Chinese ownership has become politically radioactive.

Here’s what nobody wants to say out loud: America needs Chinese battery technology and manufacturing expertise to build a competitive EV industry, but American politics now make Chinese investment essentially impossible. That’s not a bug, it’s a feature—at least according to lawmakers like Moolenaar who view any Chinese involvement as a national security threat.

The Gotion collapse reveals a deeper problem than just one failed project. Michigan taxpayers are out $23.6 million. Big Rapids lost 2,350 promised jobs that won’t materialize. And the U.S. battery supply chain just lost a major planned supplier at exactly the moment when Trump’s elimination of EV tax credits has automakers scrambling to cut costs and scale back EV production.

This is the same pattern we documented with AESC’s failed Kentucky and South Carolina plants back in June, and with another South Carolina battery plant that halted construction amid policy uncertainty. Foreign battery manufacturers arrive promising jobs and investment, politicians lavish them with subsidies, local opposition erupts over Chinese ownership, federal policy shifts, and projects die. Rinse, repeat. Michigan just added another corpse to the pile.

The timing makes this worse. Trump’s “Big Beautiful Bill” eliminated the $7,500 EV tax credit effective September 30—just weeks before Michigan pulled the plug on Gotion. That’s not a coincidence. When we covered Rivian’s 600 layoffs earlier this week, we noted how the expired tax credits are forcing EV makers into crisis mode. Now we’re seeing the same policy shift kill battery supply before it even gets built.

Interestingly, back in May we reported on Rivian’s clever move to stockpile Gotion batteries before tariffs hit. That stockpiling now looks prescient—Gotion’s Michigan plant was supposed to supply the U.S. market, but it’ll never produce a single battery cell. Rivian saw this coming.

The Illinois plant’s survival offers a hint: projects that start production before opposition organizes can weather the political storm. But that’s cold comfort for the dozens of announced battery projects that haven’t broken ground yet. If Chinese companies are essentially banned and domestic companies lack the technology and cost structure to compete, who exactly is going to build America’s battery industry?

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