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Chinese Battery Maker Picks Illinois for $2 Billion Factory

(Bloomberg) —

A Chinese battery maker picked Illinois for a $2 billion gigafactory that’s set to start production next year.

Gotion High-tech Co.’s facility will create 2,600 jobs and is the “most significant new manufacturing investment in Illinois in decades,” Governor J.B. Pritzker said in a statement on Friday. The plant, focusing on lithium-ion battery cell, battery-pack production and energy storage systems, received state incentives valued at $536 million.

Illinois has been trying to position itself as a hub for new technologies from quantum computing to life sciences and electric vehicle manufacturing. The state has recently created a task force, known as Innovate Illinois, aimed at luring federal dollars, including from the Inflation Reduction Act. The law, signed by President Joe Biden just over a year ago, provides generous tax credits and grants for electric vehicle, battery and clean energy projects, sparking a competition among states to offer their own incentives to attract these industries.

“All that we see here are of enormous value to us: an enabling business environment, a supportive state government for the new energy industry and their highly efficient work,” Li Zhen, chairman of Gotion, said in the statement on Friday. 

Gotion’s investment comes on top of a $2.4 billion plant it plans for Big Rapids, Michigan. It also signals Chinese manufacturers are making inroads penetrating the US market despite the political rhetoric. Earlier this week, Indiana-based Cummins Inc. said it would partner with Daimler Truck Holding AG, Paccar Inc. and China’s EVE Energy Co. to build a battery plant in the US.

Gotion, which has Volkswagen AG as a major shareholder, will reuse an existing manufacturing site instead of building a new plant from scratch. The 150 acre facility, located in Manteno — south of Chicago — is expected to produce 10 GWh of lithium-ion battery packs and 40 GWh of lithium-ion battery cells. 

The Chinese battery giant will be eligible for $213 million in tax benefits over 30 years, as part of Illinois’s funding package.

(Updates with Gotion’s Michigan investment in fifth paragraph.)

© 2023 Bloomberg L.P.


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