Bill would block Gotion from federal tax credits for EV battery parts plant in Big Rapids

Washington ― A new bill authored by a pair of House Republican lawmakers aims to prevent battery parts manufacturer Gotion Inc. from receiving federal tax credits under the Inflation Reduction Act because its parent company is a Chinese firm.

The lawmakers, U.S. Reps. John Moolenaar of Caledonia and Darin LaHood of Illinois, said their legislation is in response to Gotion Inc., an American subsidiary of a Chinese-based company, planning to build EV battery materials factories near Big Rapids and in Manteno, Illinois, that would potentially qualify for the tax credits under the IRA. 

The bill is notable in part because the Inflation Reduction Act's pot of nearly $200 billion in advanced manufacturing credits is considered a major reason why foreign-owned companies such as Gotion are investing in U.S.-based factories.

The legislation is named the No Official Giveaways Of Taxpayers’ Income to Oppressive Nations (NO GOTION) Act, and would disqualify from green energy tax credits "any entity created or organized in, or controlled (in the aggregate) by, one or more countries of concern," defined as China, Russia, Iran or North Korea.

Moolenaar said in a statement that the bill's purpose is to prohibit companies affiliated with the Chinese Communist Party, including Gotion, from receiving federal tax dollars.

"If America is going to have a secure energy supply, we cannot give federal tax credits to CCP-controlled companies and allow them to expand their influence in the U.S.,” Moolenaar said. “Quite simply, the tax dollars of the American people should not be used to pad the profits of a company beholden to the CCP.”  

Gotion Inc. is controlled by Gotion High Tech, which is based in China and whose articles of association require that the company "carry out party activities in accordance with the constitution of the Communist Party of China."

In a similar statement, LaHood said, "hard-working taxpayers should not be on the hook for billions in federal subsidies funneling to companies beholden to malign actors, like the CCP."

Moolenaar, who sits on the House Select Committee on CCP, has long raised concerns over Gotion's plans to build a manufacturing plant near Big Rapids. He's cited the company's links to China and the planned site's location within 100 miles of Camp Grayling, where the National Guard helps to train Taiwanese military leaders.

In a statement Thursday, Gotion said the legislation was an attempt by Moolenaar "to spread misinformation and make misleading claims about Gotion that have no basis in logic, business or reality" and said the congressman's "attempts to derail good-paying jobs for his constituents is disheartening and misguided."

“In keeping with our well-established record of an international company with facilities in 10 countries, including seven and a half years in North America, Gotion never has and never will promote any political philosophy in the USA," the company said.

Chuck Thelen, vice president for Gotion Global Inc., has said the articles of association apply to the parent company only, not the U.S. subsidiary planning to build a plant on the outskirts of Big Rapids. Thelen has said he's never seen any company executive he's worked with profess any sort of political view.

A federal panel tasked with investigating foreign investments for national security risks in June said it didn't have the proper jurisdiction to conduct a review of the Big Rapids-area project.

Feds decline review of Chinese battery plant plans in Big Rapids, company says

Gotion announced plans in October 2022 for a $2.4 billion EV battery parts facility on the outskirts of Big Rapids. The project would receive more than $800 million in incentives, including about $636 million in tax abatements over 30 years and $175 million in taxpayer cash from Michigan's business incentive program, the Strategic Outreach and Attraction Reserve fund.

Last month, Thelan said it wasn't pursuing federal tax credits under the IRA for the Michigan plant.

"Although Gotion Inc.'s planned facility in Green Charter Township is not pursuing IRA tax credits at this time, our financial and legal teams are in the process of reviewing and assessing the law," Thelan said in a statement to Crain's Detroit Business. "Our main focus is how we can potentially pass these cost-saving credits onto our American customers."

Other Michigan co-sponsors of the legislation include Reps. Jack Bergman of Watersmeet, Bill Huizenga of Holland, John James of Shelby Township, Lisa McClain of Bruce Township and Tim Walberg of Tipton.

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