Embattled Chinese battery maker Gotion vows ‘more vocal’ US strategy after filing lawsuit in Michigan

‘People have been hearing a lot of mistruths’ about the company and its planned US$2.3 billion EV plant, top North American official tells Post
Gotion’s more outspoken tack signals strategic shift, having previously tried to address concerns by attending events hosted by township officials

US-China relations

Khushboo Razdanin Washington

Published: 5:00am, 19 Mar 2024

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Days after a Chinese battery maker sued a Michigan community for breach of contract over a US$2.3 billion electric-vehicle plant it aims to build there, the company’s top North American official told the Post it was now going to be more outspoken.

“I think people have been hearing a lot of mistruths, fabrications for the last nine months,” Chuck Thelen, vice-president of North American manufacturing for Gotion Inc, said in an interview on Monday.

“We’re now on a mission to make sure they hear the truth, even though we’ve been speaking the truth, or [people are] not really hearing it. And now we’re going to be a little more vocal.”

Saying he had “personally experienced a great deal of bullying from a number of people”, Thelen portrayed Gotion as trying to “dispel the whole Asia-hate thing that we’re definitely seeing around the United States right now and trying to show why it’s misplaced”.

On Saturday, for example, a post on X (formerly Twitter) slammed Thelen as a “useful idiot for the Chinese Communist Party; chronic liar about the Gotion project”.

Thelen’s comments represent a shift in tack for the company. For almost a year, Gotion primarily sought to address concerns by attending events hosted by township officials and speaking with local reporters in Michigan, while sharing only brief comments with national and international media.

On Monday, Thelen said Gotion had been “forced to file” the lawsuit to defend its investment. Its complaint filed in a US federal court in Michigan on Friday claimed the company had already invested about US$24 million in the project to acquire 270 acres of land and took on nearly US$500,000 in additional costs.

The project was first announced in the state’s rural Green Charter Township in 2022 with a promise of creating more than 2,000 jobs in the next eight to 10 years. In return, the company was poised to receive US$175 million in state tax incentives.

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But even as the project’s supporters including Democratic Michigan Governor Gretchen Whitmer have touted its promise of new jobs and technology, Gotion has drawn public and political ire over its links to China and the Chinese Communist Party.

Several local media outlets have highlighted a document stating that Gotion’s parent company in China was required to create an in-house Communist Party cell to operate there. Critics have claimed the US operation is a Trojan horse for Beijing.

Gotion, a publicly traded company in China also known as Guoxuan High-Tech Company, is partly owned by German carmaker Volkswagen.

In a sign of mounting unease in Michigan, residents of Green Charter Township last November ousted five of seven local government officials in a recall election over their support for the Gotion project. More than a thousand residents cast ballots from a township comprising some 3,200 residents.

The same month, two Republican congressmen – John Moolenaar of Michigan and Darin LaHood of Illinois – introduced the No Gotion Act in the US House.

Republican congressman John Moolenaar of Michigan represents Mecosta County, where the Gotion project is based. Photo: Bloomberg

The bill proposes to prohibit companies “affiliated with” the Chinese Communist Party from receiving tax credits under the Inflation Reduction Act – sweeping tax, climate and healthcare legislation that US President Joe Biden signed into law in 2022.

By December, the new township board rescinded a resolution in support of the plant that the previous board adopted in 2022, saying it lacked sufficient time and legal expertise to go through the agreement and understand the project’s details and scope.

The new officials also withdrew a resolution approving plans to extend water service to the proposed plant.

“We have Chinese trying to start their own police forces around the country, and we want to do business with these people? That’s how we view this,” Jason Kruse, Green Charter Township’s new supervisor, told Fox News soon after joining the board.

The lawsuit filed by Gotion in the US Western District Court of Michigan alleged that the township’s decisions breached a development agreement. The company urged the court to order the township to restore both resolutions.

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Kruse told The Detroit News on Friday that the township was “saddened and disappointed” by the lawsuit.

“As township supervisor, my number one concern is protecting the interests of the people of Green Charter Township, and we will vigorously defend our township’s position in the matter,” Kruse said in a statement. “We might be a small community, but we refuse to be bullied.”

Kruse did not respond to a request from the Post for comment.

The court has summoned the township to respond to Gotion’s complaint within 21 days.

Based on earlier estimates, the plant is expected to be built and start production by 2025 and become fully staffed by 2031.