From the start, Illinois’ plans for a new factory to make lithium batteries for electric vehicles faced major hurdles.
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 in federal taxpayers – for a project that will cost Gotion just $2 billion. Local residents in and around Manteno, Illinois, where the project is sited, feared 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.
Now, more serious obstacles have emerged:
• Opponents who sued to stop the Manteno plant are enthused by a recent hearing on their lawsuit. The case is being heard by 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.
• 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.
• Probabilities have increased that Donald Trump and Republicans will prevail in November’s election for the White House and Congress. Republicans, for the most part, want the Gotion deals killed, which they could do if they sweep.
“Government and business elites in Illinois and Michigan moved fast and in secret in their corrupted ‘deals’ with PRC-based and CCP-tied Gotion, jeopardizing our national security, wasting taxpayer dollars on a product there is low consumer demand for, and rupturing the consent of the governed,” Joseph Cella told me. He’s a former U.S. ambassador and an active Gotion opponent. And now, “citizens exposed these deals,” he said, “so the legislative, judicial and executive branches on the state and federal level are now holding Gotion to account.”
Why would Gotion plow ahead in the face of so many threats to its Manteno project?
Here’s one good reason: They are playing with the house’s money. You 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, which describes itself as an independent research and commentary nonprofit organization.