Chinese firm behind Michigan EV battery plant registers as foreign entity.
A Chinese Company Registers as Foreign Entity for Michigan EV Plant
A company behind an electric vehicle plant in Michigan has registered as a foreign entity, its legal documents show.
Gotion Inc., the company planning to open a battery factory for electrical vehicles (EVs) in Michigan, near Big Rapids, Mecosta County, has registered under the Foreign Agents Registration Act, according to the registration document it submitted to the U.S. Department of Justice.
The document states that Gotion, which is based in Fremont, California, is “wholly owned and controlled” by Gotion High-tech Co. Ltd., a Chinese company based near Hefei, a city in eastern China.
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The document also asks the registrant to state if “this foreign principal,” meaning the American company Gotion Inc. is either “supervised,” “directed,” or “financed” by “a foreign government, foreign political party, or other foreign principal.”
Gotion’s answer to this was “No.”
It is, though, “completely controlled” by Gotion High-tech Co., a Chinese company.
The document also asks if the “foreign principal,” or Gotion Inc., will engage in “political activities.” Gotion’s answer to this was “Yes.”
Gotion explains that the company came into contact with many CEOs and company directors in Michigan, as well as politicians, in its pursuit of starting the battery plant.
The method used by Gotion to achieve this was “communication by email, text, and phone with members of the Michigan executive and legislative branches on legal and policy-related matters.”
In addition, there was communication by email or phone with the “Mecosta County Board of Commissioners regarding legal and policy concerns” with the proposed battery plant, including “economic incentives, and rezoning.”
Just the News reported that Gotion secured a $1 billion taxpayer support for its factory and that its overall cost would be $2.4 billion.
Michigan residents, Republicans, and environmental groups have raised concerns about the deal.
All companies in China, including foreign companies, are required under the law to have a Chinese Communist Party (CCP) office set up inside the company’s structure. This office supervises the company’s function.
Gotion High-Tech’s governing article states:
“Article 9: The Company shall set up a Party organization and carry out Party activities in accordance with the Constitution of the Communist Party of China. The Company shall ensure necessary conditions for carrying out Party activities.”
It goes on to say, “The secretary of the Party committee shall be the chairman.”
This seems to mean that the CCP committee inside the company is not just for supervising and reporting back to the CCP but it also functions as the director of the company.
In other words, a Chinese company is a CCP-controlled company, which is allowed to control an American company that conducts business and probably lobbies American politicians.
The Chinese Gotion’s “Party Committee” will ensure the company follows the Chinese Communist Party’s regulations and “lead the ideological and political work, united front work, spiritual civilization construction, enterprise culture construction, labor union, Communist Youth League and other mass work of the Company; lead the construction of Party conduct and clean government, and support the Commission for Discipline Inspection,” according to the articles.
Gotion’s North American Manufacturing Vice President Chuck Thelen dismissed concerns saying that Gotion Inc. is “not Chinese-owned.”
“The rumors that you’ve heard about us bringing communism to North America are just flat-out fear-mongering and really have nothing based in reality,” he said earlier this month, according to Politico.
Gotion did not immediately reply to a request for comment.
Chinese Business Expanding in Michigan
Yet another Chinese company, named CATL, producing EV batteries has plans of making business with a Ford battery plant in Michigan.
The factory will be owned by Ford through a wholly owned subsidiary without foreign investment; Chinese EV battery maker Contemporary Amperex Technology Co. Ltd. (CATL) will provide the battery technology, some equipment, and Chinese workers. The plant is expected to start operating in Marshall, a small township 100 miles west of Detroit, in 2026.
Michigan locals are mounting resistance against the plant being concerned about CATL’s communist backing, the associated national security risk, the loss of prime farmland, the lack of transparency in the process, and an oversize industrial park’s impact on a small town.
But EV batteries might not come only through China. Chinese investment in South Korea might serve a similar purpose, as South Korea has a free trade agreement with the United States.
In the past five months, four Chinese firms have announced investing more than 5.6 trillion won ($4 billion) in South Korea for new EV battery factories. These deals were established to take advantage of Korea’s free-trade agreement with the United States to qualify for EV tax credits under the U.S. Inflation Reduction Act (IRA).
Sen. Marco Rubio (R-Fla.) has asked the Biden administration to stop U.S. electric vehicle tax credits from going to Chinese companies through their partnerships in South Korea.
“The products manufactured in our South Korean base meet the critical minerals requirements in the IRA bill for the benefit of tariff policies when exporting to European and U.S. markets,” Ningbo Ronbay New Energy Technology Co. stated in an announcement regarding setting up a plant in South Korea to produce 80,000 tons of EV battery precursors a year. The value of the investment hasn’t been disclosed.
Another Chinese company, GEM Co., Ltd., stated in a March release, “To qualify for tax credits, IRA requires that consumer electric vehicles contain a certain percentage of battery materials and critical minerals from America or countries with a free-trade agreement with America, but China is not one such country.”
GEM also stated that its investment of more than $937 million in an EV battery precursor factory with an annual production capacity of 43,000 tons in South Korea.
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