Michigan OKs electricity rate cut to attract automotive battery factories

Bridge Michigan 
Dec. 22, 2021
Paula Gardner

Michigan’s two largest utility companies now can offer large-scale industrial customers lower rates, a move that proponents say will boost the state’s chances to attract billions of dollars in advanced manufacturing investments.

Members of the Michigan Public Service Commission on Wednesday voted unanimously to approve requests that DTE Energy and Consumers Energy made in November.

At that time, Consumers said, at least 10 high-tech projects — including electric vehicle battery plants and semiconductor factories that use massive amounts of power — were considering Michigan for about $64.8 billion in investment that would generate about 21,000 jobs.

The utilities said they needed the ability to offer the lower rates to those customers for the state to be competitive: Existing industrial rates in Michigan are about 21 percent more expensive than in states — mostly in the South — that also are vying for the investment and jobs.

The vote could mean tens of millions in electricity savings to a place like a large electric vehicle battery plant.

Dan Scripps, chair of the commission, said he was excited by the approval, which comes two days after Gov. Gretchen Whitmer signed a $1 billion incentive package to attract the same types of businesses.

“Michigan is firmly in the game for attracting that investment and those jobs,” Scripps said just before casting his vote with the two other commissioners. All spoke in favor and did not address the written comments received before the meeting.

Whitmer, speaking to reporters at a year-end event, said this week’s economic development accomplishments are important to the state.

“We’ve got to make sure that as battery plants, as the future mobility investments (and)  decisions are made,  that Michigan is at the top of the list and that we’re winning them,” Whitmer said.

But some critics are skeptical that costs associated with the new rates will be fully borne by the companies signing deals for them. Both utilities stated that is the case in their petitions, and a reason why the commission could act outside of normal rate-setting procedures.

Tim Lundgren, attorney with Potomac Law Group in Lansing, told Bridge Michigan he was disappointed by the commission’s order. He had sought a full hearing before the vote to determine whether the pricing scenarios protected other customers.

“There are significant reasons to doubt (the) assertions,” wrote Lundgren in his petition representing the Energy Michigan Inc. coalition of energy customers.

Amy Bandyk, executive director of the nonprofit Citizens Utility Board of Michigan, also sought more scrutiny ahead of the vote.

She questioned the commission about whether safeguards could be added to protect existing customers, including making the initial approval part of a pilot program or restricting eligibility to only new businesses receiving state support.

While industrial electricity rates should not affect residential customers, Bandyk also questioned disparities between customers who power their homes versus industrial businesses.

Also on Wednesday, the commission approved a rate increase of $27,118,000 for Consumers, nearly 88 percent less than the utility had originally requested. The MPSC says it means an increase of about 59 cents per month on an average residential bill. The state’s 12-month average electricity bill is $109.86.

“There is a long-term and troubling trend of Michigan residential customers frequently having to deal with long power outages due to poor utility service and still getting hit with rate increase after rate increase while industrial rates have stayed flat,” Bandyk told Bridge.

Consumers, which covers 62 Lower Peninsula counties including Kent, Kalamazoo and Midland, will be able to award the new economic development rate to companies that use 35 megawatts at a single moment — the equivalent of about 38 times what a typical Michigan house uses in a month.

If eligible companies sign a 15-year contract, Consumers would cut rates to 4 cents to 5 cents per kilowatt hour from the average 8.28 cents it charges industrial customers.

DTE would require its customers in much of eastern Michigan and parts of northern Michigan to use 50 megawatts at any moment to be eligible for the rate. In exchange, those customers would pay 4.3 cents per kilowatt hour as opposed to 5.5 cents to 7 cents per kilowatt hour.

“The new rate will address the anticipated needs for more electrification of large business operations, including EV and EV battery manufacturing as well as data center facilities,” said Peter Ternes, DTE spokesperson.

Michigan learned how electricity rates impact corporate decisions when Ford Motor Co. chose Tennessee for its new Blue Oval City, which will house an EV battery plant among other advanced manufacturing operations.

The average industrial electricity rate paid in Michigan is 7.85 cents per kilowatt, while it’s 5.86 cents in Tennessee  — and that state is one of nine that offers “economic development” rate incentives.

Electrical vehicle battery plants can use five times more electricity than typical factories, and their size — GM is building one in Spring Hill, Tennessee that is 2.8 million square feet — means they’ll buy more electricity than most other customers.

The state now is courting GM for its third large U.S.-based plant, after the automaker expressed interest in a 590-acre site in Delta Township, west of Lansing.

The Lansing Board of Water and Light this month approved negotiations for a special industrial rate if GM chooses the site, where it would need access to 100 megawatts at a time. In comparison, the utility said, the manufacturer over a full year would use 25 percent more power than the public utility’s full portfolio of 50,000 residential customers.

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Michigan Business Beat | Glenn Stevens Reviews 2021 And Looks Ahead To 2022 For MICHauto

Michigan Business Network
Dec. 21, 2021

Chris Holman spends some time with Glenn Stevens Jr., Executive Director of MICHauto and Vice President of Automotive and Mobility Initiatives at the Detroit Regional Chamber, Detroit, MI.

Watch Glenn and Chris review 2021 for MICHauto and the auto/mobility sectors and more in this YouTube video shared below.

Their discussion about the recent busy year!

What were the 2021 highlights for MICHauto?

What’s in store for MICHauto in 2022?

Glenn shares about the microchip shortage and the supply chain challenges.

View the original article.

Michigan Legislature passes $1B incentive plan for big projects like GM

Bridge Michigan 
Dec. 14, 2021
Sergio Martinez-Beltran, Paula Gardner, Jonathan Oosting 

The Michigan Legislature late Tuesday approved a $1.5 billion economic development proposal that boosters say will help the state land major projects like a General Motors Corp. battery plant near Lansing.

The six-bill plan, headed to Gov. Gretchen Whitmer, would divert $1 billion into the new fund that could be used to recruit and retain so-called “critical industries” like manufacturing.

Chief among them is a $2.5 billion plan by General Motors Corp. and its battery-making partner, Ultium Cells LLC, to build a third U.S.factory in Delta Township, just west of Lansing. A formal announcement is expected soon on the plant that would employ up to 1,700 workers by 2030.

Lawmakers also approved $409 million in grants for businesses affected by the pandemic. They also voted to exempt more small businesses from taxes on personal property and equipment and steer $75 million to local governments to offset those losses.

Sen. Jim Stamas, R-Midland, said the bills signal that “Michigan is still fighting for every job.

“Our families expect and deserve us to do nothing less than fight for that.”

Passage came after lawmakers in the Republican-led Legislature negotiated all day Tuesday.

The centerpiece, SB85, is the $1 billion to lure big-ticket manufacturing to the state, which boosters said is critical to compete with the South. The bill was approved by the Senate 25-11 and House 78-25.

According to revisions to the plan distributed Tuesday, money would be directed to at least two new funds: one to aid in site selection and infrastructure improvements, and a second targeting so-called critical industries, representing only the largest potential deals for every region in the state.

The vote came about 10 weeks after Ford Motor Co. announced it would invest $11 billion in two electric vehicle production campuses in Tennessee and Kentucky. Michigan did not compete for the project that will create a total of 11,000 jobs.

Lawmakers worked with Whitmer on the package for weeks, and boosters said time is of the essence.

Now, 10 high-tech projects, including electric vehicle facilities, worth a combined $64.8 billion and projected to employ 21,000, are considering Michigan, according to Consumers Energy.

“I am confident that, together, we can continue to create tens of thousands of good-paying jobs and uplift our communities by setting up this critical economic development fund,” Whitmer said in a statement.

She is expected to sign the legislation.

Michigan’s incentives would not be solely for the auto industry, but that is the sector with the most growth, said Glenn Stevens, executive director of MICHAuto, a statewide initiative of the Detroit Regional Chamber to promote the state’s largest industry.

The urgency comes from a faster-than-anticipated shift to electric vehicle production from Michigan-based Ford and GM, who are fighting for market share with other companies, like Toyota and Tesla.

“It’s a complete upheaval and transformation, and if Michigan doesn’t move with it, then we could have some serious consequences,” Stevens told Bridge Michigan ahead of the vote.

Past economic incentives have been costly. One analysis, by the free-market Mackinac Center last year estimated all of Michigan’s programs since the 1980s cost an average of nearly $600,000 for every job created.

Rep. Cynthia A. Johnson, D-Detroit, called the new incentives “corporate welfare handouts” that only help wealthy businesses.

“There’s no guarantee of long-term high paying jobs here,” Johnson said. “With these bills, there will be winners and losers. Guess who the losers will be? Small businesses.”

But Rich Studley, president and CEO of the Michigan Chamber, said the latest plan offers “enough checks and balances so that lawmakers can be confident.”

“We are in a fierce competition with other states and foreign countries for jobs,” Studley told Bridge earlier Tuesday.

Among other things, the proposal would allow the Legislature and governor to oversee the funds and offers greater protections if projects don’t live up to job promises.

The small-business tax exemption, though, received some criticism from the Michigan Municipal League and groups that townships and counties. That’s because the package does not address a long-term funding solution to the $75 million that will be lost annually local governments by more than doubling the personal property tax exemption for small taxpayers.

$1 billion fo COVID-19 response

In a separate measure, the Legislature also approved spending $150 million of federal COVID relief funding for school testing and screening. This amount is half of what was granted to the state.

Sen. Curtis Hertel, D-East Lansing, told reporters Tuesday the supplemental spending bill would allow schools to continue with in-person learning.

“Do I wish it was more? Yes.” Hertel said. “But I’d much rather get a good portion along the way, and those testing dollars will mean that next month those kids are tested … there’s contact tracing.”

Lawmakers also approved  $36.3 million for emerging environmental health threats in Benton Harbor and other communities. The city in southwest Michigan is amid a water crisis involving high lead levels.

The Legislature has already allocated $1 billion to replace lead pipes across the state.

The funds passed Tuesday can be used for water sampling, the expansion of Food Assistance Program benefits for Benton Harbor residents, and the hiring of a health officer in Berrien County.

Rep. Pauline Wendzel, who represents Benton Harbor, said the money will help ensure access to clean water. She applauded colleagues for not making the issue political.

“We’ve seen what happens in the short and long term when emergencies are politicized in other communities — the people suffer while politicians point fingers,” Wendzel, R-Watervliet, said in a statement.

Earlier Tuesday, the Michigan House passed a supplemental bill that would allocate $1.08 billion to address the COVID-19 pandemic.

The measure, which the Senate could not take up until early next year because of procedural rules, would allocate $151 million to buy tests for schools and $50 million to create “early treatment” sites.

Democrats proposed a series of amendments rejected by Republicans, including a plan that would have provided a $2,500 bonus to all frontline health care workers who directly interact with patients.

House Appropriations Chair Thomas Albert, R-Lowell, said he did not necessarily disagree with the proposals but said those negotiations could wait until next year.

“It’s a zero-sum game,” he said. “There’s only so much money that we have. I think we’ve done a lot here with the $300 million to address the (health care) workforce issues, and we’d like to see how that works before we venture into other areas.”

View the original article.

Historic Economic Development Package Passed with MICHauto and Chamber Advocacy

In a late-night session on Tuesday, Dec. 14, the Michigan House overwhelmingly passed bipartisan economic development legislation, to create significant new economic development tools for the state a day after the bill passed the House. This package of bills called the Strategic Outreach and Attraction Reserve Fund, was introduced in response to Ford Motor Company’s recent battery plant announcement and the need for Michigan to better compete for future opportunities.

Legislators appropriated more than $1.88 billion on Tuesday toward grants and tax breaks that aid small and large businesses in Michigan, and provide incentives to companies looking to invest in the state. Much of that spending will come from the $5.7 billion in discretionary federal stimulus funds lawmakers still have at their disposal.

“Big bipartisan wins for Michigan are increasingly rare, especially ones that have a transformative impact on our economy. Michigan created and owned the automotive industry since its inception, but leadership today does not ensure leadership into the future — especially in light of other states gunning for our assets,” said Sandy K. Baruah, president and chief executive officer of the Chamber. “The Chamber and MICHauto, along with partners across the state, are proud to have worked with the Legislature and Governor’s office to pass the biggest bipartisan deal in Michigan since the 2019 bill signing at the Mackinac Policy Conference, which will allow our state to compete and win the jobs of the future.”

Over the past month MICHauto and the Chamber have been leading advocacy efforts pushing for a more robust economic development toolkit, working in coordination with the Governor’s administration and Republican leadership to move beyond Ford’s decision and position the state to win future transformational projects and retain its global automotive leadership.

What Is In The Legislation

  • HB5602/ SB769 creates the vehicle by which funding for the site readiness program and critical industry investment fund will be authorized to the Michigan Strategic Fund for transformational projects.
  • HB 5603/ SB 770 creates a strategic site readiness program to provide grants, loans, and other economic assistance for the purpose of creating investment-ready sites to attract and promote investment in this state.
  • HB 5604/ SB771 creates a critical industry investment fund that will allow Michigan to make game-changing investments to businesses that will be critical to closing deals and de-risking project economics in creating and preserving qualified jobs in the state and generating significant capital investment.

“Winning new investment and ensuring Michigan remains the leader in electric and autonomous vehicle technology is critical to our state’s long-term economic growth and competitiveness,” said Glenn Stevens Jr., executive director of MICHauto and vice president of Automotive & Mobility Initiatives for the Chamber.  “This legislation will help Michigan compete and win its share of transformational projects. The Legislature should be applauded for its bipartisan work on these bills – given the unprecedented investment being made in the automotive industry, it could not have come at a more critical time.”

Critical Advocacy Efforts Continue
The passage in the House and Senate demonstrates that Republicans and Democrats can still find common ground to tackle substantial issues. The bipartisan consensus reflects the importance of these bills for the state of Michigan, the future of its signature automotive industry, and the state’s business climate – something voters overwhelmingly support according to a statewide poll released this week by the Chamber, Business Leaders for Michigan, and Michigan Manufacturers Association

The Chamber and MICHauto were able to deploy the full advocacy team in Lansing and the Detroit Region to connect with legislators and push for the passage of the Strategic Outreach and Attraction Reserve Fund bills. MICHauto’s expertise provided legislators with information on why these incentives were critical to secure the state’s continued leadership in the global automotive industry. Finally, MICHauto and the Chamber were instrumental throughout negotiations by utilizing the strength of our bipartisan relationships to secure passage.

The legislative package’s next stop is Governor Whitmer’s desk.

GM eyeing $2.5 billion investment for new battery cell plant in Lansing area

The Detroit News
Dec. 10, 2021
Kalea Hall, Craig Mauger and Jordyn Grzelewski 

General Motors Co. is targeting Delta Township near Lansing to build its third multi-billion dollar battery cell manufacturing plant in the United States, according to two sources familiar with the situation and tax incentive documents filed with the city of Lansing.

Through their Ultium Cells LLC joint venture, GM and partner LG Energy Solution are requesting incentives from the city and state to develop a battery cell plant near GM’s Delta Township assembly plant. The proposed investment is pegged at $2.5 billion, according to GM’s tax-exemption request to the city of Lansing.

Once operational, the plant would create 1,700 jobs in the region. Construction would start in May 2022 and come with more than 1,000 jobs. The building and related site improvements will be about 2.5 million square feet.

Additionally, the Detroit automaker is evaluating plans to convert its Orion Assembly Plant currently producing the electric Bolt and Bolt EUVs models into a hub that would build either trucks or SUVs based on the Ultium battery architecture, according to two sources familiar with the situation. The investment likely would create new jobs at the Oakland County facility north of Detroit.

The news Friday came as Michigan lawmakers and Gov. Gretchen Whitmer’s administration, partially inspired by the GM project, are racing to create a major new economic development program. The initiative, which could gain final legislative approval on Tuesday, would allow the state to provide funding for large projects to improve sites, to acquire land and to distribute “economic assistance” to create jobs.

The proposed Strategic Outreach and Attraction Reserve Fund program follows Michigan’s embarrassing loss in Ford Motor Co.’s decision less than three months ago to partner with SK Innovation to invest $11.4 billion and create 11,000 new jobs in Kentucky and Tennessee to build batteries, assemble electric trucks and form a supplier park.

The Ford decision in large part hinged on competitive industrial utility rates and the availability of large, shovel-ready sites that Michigan does not have. But the Blue Oval’s announcement set off a flurry among Lansing lawmakers and economic development circles, renewing determination to ensure the state is prepared for the next big opportunity.

“The bottom line is we couldn’t check all the boxes for what (Ford) needed, however, there were boxes that we weren’t prepared to be able to check,” said Glenn Stevens, executive director of MICHAuto and vice president of automotive and mobility initiatives for the Detroit Regional Chamber.

“So it was a wakeup call to make sure that, OK, we’re ready to compete when it comes to incentive funds, site development, workforce and talent. I think that it was definitely a rallying cry, and we’ve seen an incredibly collaborative and quick transformation to be able to make things happen with regards to having the right tools.”

The state can’t rest easy, experts say. GM alone has announced plans to invest $35 billion in electric and autonomous vehicle initiatives just through mid-decade. And automakers are signaling that the transition to plug-in vehicles may be happening quicker than expected. Already Ford has said it’s struggling to meet higher-than-expected demand for its first wave of electric products. CEO Jim Farley recently upped the Dearborn automaker’s EV production target to 600,000 units globally in the next two years.

“It is happening fast,” said Stevens. “You’re going to have this initial flurry of activity — where people position themselves in the market, position their supply chains — the dust settles for awhile and then it picks up again. Because it will. We’re not going backwards.”

To ensure Michigan is well-positioned to be the home base of these emerging sectors, Stevens said the state must focus not only on securing advanced manufacturing jobs, but on building know-how around connected vehicle technologies and electrification: “We’re going to have to continue to build the knowledge base part of our economy to make sure that we not only keep what we have but we grow from the base.”

GM and LG Energy Solution already are building two other battery cell manufacturing plants with LG in northeast Ohio and Spring Hill, Tennessee. Both of those investments totaled more than $2 billion and come with more than 1,000 jobs. GM has said it has plans for two other U.S. plants, but hasn’t revealed the locations.

“GM is developing business cases for potential future investments in Michigan,” spokesman Dan Flores said in a statement. “As part of developing a competitive business case, we are having discussions with the appropriate local officials on available incentives.

“We are not going to speculate or disclose additional details of the projects under consideration beyond any information included in public filings. These projects are not approved and securing all available incentives will be critical for any business case to continue moving forward. I’m not going to speculate on the timing of when GM leadership will make a decision on potential future investments in Michigan.”

The GM and LG joint venture is requesting the formation of a renaissance zone. Those are property that is “designated as virtually tax free for any business or resident presently in or moving to a zone,” according to a Michigan Economic Development Corp. fact sheet.

The companies also are requesting an industrial tax exemption. Lansing City Council will review the requests at a 5 p.m. Monday meeting. Peter Spadafore, president of the council, said his understanding is there’s competition for a battery plant. He vowed to do everything he can to make sure Lansing is competitive.

The property for this project is technically located in Delta Township, but more than 20 years ago Delta and Lansing signed an economic development agreement transferring the property from the township to the city. Lansing assesses and collects the taxes on the property, according to the agreement. The tax revenues are then divided between the two.

“Lansing is the perfect location for future investment from General Motors and Ultium, and I will do all I can to win this new battery plant and bring these jobs and economic opportunities here,” Lansing Mayor Andy Schor said in a statement to The Detroit News. “Our rich GM manufacturing history, our workforce, and our two current assembly plants make this area ideal for building the next generation of cars and the batteries needed to power them. “

Otie McKinley, spokesman for the MEDC, said it would be premature to discuss any potential state support for the GM projects. But Michigan is proud to “remain a global home for opportunity within the future of mobility and electrification,” McKinley said.

In its incentive application, Ultium Cells said it would utilize “potential various programs” of assistance for the project “to be determined and offered by the MEDC and local partners.”

The News reported in November that GM has 770 acres around its Delta Township plant available, which is enough to accommodate a battery plant similar in size to the one under construction in Lordstown, Ohio. GM President Mark Reuss also recently told The News that GM is keeping its home state under consideration for at least one of two battery plants.

“If the state loses this one, they won’t be able to blame it on the company not giving them a chance,” said Erik Gordon, a professor at University of Michigan’s Ross School of Business. “It is a test of the state’s desire to have next generation manufacturing in Michigan.”

Earlier this week, The News first reported that the Whitmer administration and lawmakers are targeting GM with a significant economic development package that could involve millions of dollars to land large projects, like one of GM’s battery cell manufacturing plants. The Michigan House approved the package on Wednesday.

State Sen. Ken Horn, chairman of the Senate Economic and Small Business Development Committee, told The News on Tuesday lawmakers are planning to create an “investment fund,” hoping to change the fact that site planners are ignoring Michigan.

“We need to send a message to the whole economic development world that you can’t keep us off your spreadsheet anymore as you’re looking for new developments,” said Horn, R-Frankenmuth.

GM also is looking at investing in Orion Township, The News first reported Wednesday. The automaker is considering a $160 million investment at its Lake Orion assembly plant for a new battery pack line. Battery packs house the battery cells that power EVs. Experts expect the move is likely aimed at transitioning the plant to GM’s next EV facility that will build products based on its new Ultium electric platform.

Orion currently builds the Chevrolet Bolt EV and EUV, which are not based on Ultium. The plant is down through Jan. 28 as GM works through a recall on the Bolts.

Louis Rocha, president of the United Auto Workers Local 5960 at Orion Assembly, said the local hadn’t heard yet of new investment coming to the plant. But it would be welcomed news after being on layoff for months because of the Chevrolet Bolt recall, he said: “We’ve been waiting for some good news.”

View the original article.

Michigan Senate approves bills targeting ‘mega’ projects, auto jobs

The Detroit News
Dec. 9, 2021
Craig Mauger

The Michigan Senate voted Thursday to set up a funding system through which the state could use government dollars to entice corporations launching major economic development projects.

The Senate’s passage of the bills marked the latest step as the proposal, which supporters have described as key to the state’s future, quickly moved through the Legislature. The House approved a similar package on Wednesday, the same day the bills were initially debated in committee.

The proposal is targeted, at least in part, at an upcoming project from General Motors Co. It also comes after Michigan lost out in Ford Motor Co.’s decision in September to partner with SK Innovation to invest $11.4 billion and create 11,000 new jobs in Kentucky and Tennessee.

Supporters of the new bills have argued that if Michigan wants to continue to land auto manufacturing jobs amid the shift toward electric vehicles, it needs to expand its ability to offer incentives. The next phase for Michigan will be focused on innovation, said Sen. Adam Hollier, D-Detroit.

“We are competing with the entire world to make sure that batteries are produced here, that semiconductors are produced here,” Hollier said.

And the state needs to act quickly, said Sen. Ken Horn, R-Frankenmuth, who chairs the Senate’s committee on economic development.

“We have some opportunities on the hook right now that will change Michigan’s future,” Horn said.

The three Senate bills passed 27-10 on Thursday. On Tuesday, the House and Senate are expected to consider each other’s proposals and a bill to appropriate funds for the initiative. Democratic Gov. Gretchen Whitmer’s administration has been working with lawmakers on the bills, and she would have to sign them.

Opponents have blasted the idea, contending the plan essentially means state government will give money to large corporations.

The proposal strips resources out of the budget that could be used to fund other priorities, like needed road improvements, said Sen. Tom Barrett, R-Charlotte. Lawmakers continually get persuaded by “powerful interests” to come up with new incentive programs, he said.

“If these programs worked, they would have already proven themselves effective by now,” Barrett said.

“Would major corporations rather have reliable transportation with smooth roads to get their goods to market or would they have cash in their pocket as a settlement to make up for the potholes outside their facility?” Barrett asked at another point.

Three Democrats, including Sen. Stephanie Chang, D-Detroit, and seven Republicans voted against the bills. Chang suggested the legislation amounted to giving “hundreds of millions” to “unnamed, big corporations in unnamed locations.”

The state should have a comprehensive conversation about economic development that looks at solutions at education, housing, workforce and transit, Chang said.

The package would create the Strategic Outreach and Attraction Reserve (SOAR) Fund in the Department of Labor and Economic Opportunity. Money in the SOAR Fund could only move to two other new funds — the Michigan Strategic Site Readiness Fund and the Critical Industry Fund — with the approval of lawmakers, giving them influence over the decisions.

Those other funds reveal the purposes of the program. The site readiness fund would be charged with spending money on activities related to “strategic sites” and “mega-strategic sites.” “Mega-strategic site” means a strategic site that is at least 500 acres in size, according to one of the bills. Eligible site readiness expenses include land acquisition, site preparation, infrastructure improvements and construction.

The other fund, the Critical Industry Fund, would be focused on providing investments to “qualified businesses for deal-closing, gap financing, or other economic assistance to create new qualified jobs or make capital investments.”

target of the new initiative is General Motors.

GM and battery supply partner LG Energy Solution have plans for four total U.S. battery cell manufacturing sites. So far, they’ve announced two — one in northeast Ohio and a second in Spring Hill, Tennessee.

GM President Mark Reuss previously told The Detroit News the automaker is looking at its home state for the location of at least one of the additional plants planned:.

“We’d like to lessen that transportation cost. And, of course, a lot of us are Michiganders, that’s the way it is,” Reuss said.

One potential location for a battery plant is near GM’s Delta Township plant where the automaker has 770 acres available, sources previously told The News. GM owns a total of 1,090 acres in Delta Township near its plant, according to the tax assessor’s office. Of that, the current manufacturing site sits on 320 acres.

Earlier this week, GM spokesman Daniel Flores said his company supports the pending legislation: “We support efforts that will enable companies like ours to improve their competitiveness by addressing operating costs for new investment and job creation.

Multiple state lawmakers, including Horn, have signed non-disclosure agreements, preventing them from discussing at least one potential project that could benefit from the new funding program.

On Wednesday, House Speaker Jason Wentworth, R-Farwell, declined to say whether he had signed such a deal.

“I won’t get into exactly what I signed or didn’t sign,” Wentworth told reporters.

One of the bills’ sponsors, Sen. Curt VanderWall, R-Ludington, said Horn hadn’t told other senators about what information he’s obtained through his agreement.

Horn has been working with a lot of different business, and it’s public knowledge that GM is looking to expand, VanderWall noted.

GM President Mark Reuss previously told The Detroit News the automaker is looking at its home state for the location of at least one of the additional plants planned:.

“We’d like to lessen that transportation cost. And, of course, a lot of us are Michiganders, that’s the way it is,” Reuss said.

One potential location for a battery plant is near GM’s Delta Township plant where the automaker has 770 acres available, sources previously told The News. GM owns a total of 1,090 acres in Delta Township near its plant, according to the tax assessor’s office. Of that, the current manufacturing site sits on 320 acres.

Earlier this week, GM spokesman Daniel Flores said his company supports the pending legislation: “We support efforts that will enable companies like ours to improve their competitiveness by addressing operating costs for new investment and job creation.

Multiple state lawmakers, including Horn, have signed non-disclosure agreements, preventing them from discussing at least one potential project that could benefit from the new funding program.

On Wednesday, House Speaker Jason Wentworth, R-Farwell, declined to say whether he had signed such a deal.

“I won’t get into exactly what I signed or didn’t sign,” Wentworth told reporters.

One of the bills’ sponsors, Sen. Curt VanderWall, R-Ludington, said Horn hadn’t told other senators about what information he’s obtained through his agreement.

Horn has been working with a lot of different business, and it’s public knowledge that GM is looking to expand, VanderWall noted.

View the original article.

MICHauto and Chamber Advocacy Spurs Passage of Economic Development Package

On Thursday, Dec. 9, the Michigan Senate overwhelmingly passed bipartisan economic development legislation 27-10, to create significant new economic development tools for the state a day after the bill passed the House. This package of bills called the Strategic Outreach and Attraction Reserve Fund, was introduced in response to Ford’s recent battery plant announcement and the need for Michigan to better compete for future opportunities.  

With MICHauto and the Chamber pushing for a more robust economic development toolkit, the Governor’s administration and Republican leadership have been working productively to move beyond Ford’s decision and position the state to win future transformational projects and retain its global automotive leadership. 

What is in the legislation  

  • HB5602/ SB769 creates the vehicle by which funding for the site readiness program and critical industry investment fund will be authorized to the Michigan Strategic Fund for transformational projects. 
  • HB 5603/ SB 770 creates a strategic site readiness program to provide grants, loans, and other economic assistance for the purpose of creating investment-ready sites to attract and promote investment in this state.  
  • HB 5604/ SB771 creates a critical industry investment fund that will allow Michigan to make game-changing investments to businesses that will be critical to closing deals and de-risking project economics in creating and preserving qualified jobs in the state and generating significant capital investment.  

“Winning new investment and ensuring Michigan remains the leader in electric and autonomous vehicle technology is critical to our state’s long-term economic growth and competitiveness,” said Glenn Stevens Jr., executive director of MICHauto and vice president of Automotive & Mobility Initiatives for the Chamber.  “This legislation will help Michigan compete and win its share of transformational projects. The Legislature should be applauded for its bipartisan work on these bills – given the unprecedented investment being made in the automotive industry, it could not have come at a more critical time.” 

The legislation would create a site readiness program and a mechanism to fund it, allowing the state to make game-changing investments critical to closing economic development deals. The MICHauto and the Chamber have joined together with other like-minded business organizations to work in coordination with the Michigan Economic Development Corp. and Governor’s office to find a bipartisan path forward in Lansing to accomplish this important and time-sensitive goal.  

Critical Advocacy Efforts Continue 

The passage in the House and Senate demonstrates that Republicans and Democrats can still find common ground to tackle substantial issues. The bipartisan consensus reflects the importance of these bills for the state of Michigan, the future of its signature automotive industry, and the state’s business climate – something voters overwhelmingly support according to a statewide poll released this week by the Chamber, Business Leaders for Michigan, and Michigan Manufacturers Association 

The Chamber and MICHauto were able to deploy the full advocacy team in Lansing and the Detroit Region to connect with legislators and push for the passage of the Strategic Outreach and Attraction Reserve Fund bills. MICHauto’s expertise provided legislators with information on why these incentives were critical to secure the state’s continued leadership in the global automotive industry. Finally, MICHauto and the Chamber were instrumental throughout negotiations by utilizing the strength of our bipartisan relationships to secure passage.  

The legislative package’s next stop is Governor Whitmer’s desk. The Chamber and MICHauto will continue to advocate for prompt signing and update members on the progress of this important legislation.  

Michigan’s Automotive Innovation Deserves Equally Innovative Policy

By Glenn Stevens Jr.

Michigan is uniquely positioned to lead the electrified mobility revolution, but it needs new economic development policies and that match the innovation occurring across the industry.

Michigan voters get it. And they get it across party lines with overwhelming agreement that our state needs comparable incentives to those offered Ford Motor Company for new electric vehicle plants in Kentucky and Tennessee.

Just look at a few of the numbers in the recently released statewide poll by Business Leaders for Michigan, the Detroit Regional Chamber and Michigan Manufacturing Association

  • Only 28.0% of Michigan voters believe the state will remain the center of the automobile industry. 63.5% of Michigan voters believe the automobile industry will shift to other parts of the country.
  • Despite the concern that the automobile industry will leave the state, Michigan voters believe the state is well positioned to compete with other states to be the center of the electric vehicle industry by a margin of 60.0%-30.2%.
  • By a margin of 86.5%-7.5%, voters support the state taking steps to make sure Michigan maintains its role as the state that leads the automobile industry.
  • 86.8% of Michigan voters believe it is important that Michigan designs and builds the vehicles of the future. And by a 2-1 margin, Michigan voters believe the state is well positioned to compete for the electric vehicle industry.
  • By a margin of 83.2%-12.0%, voters support Michigan offering incentives similar to Indiana’s 100% income tax credit, Texas grants of $10,000 per new job created, and Tennessee’s $500 million cash incentive to Ford.

Those numbers reflect the urgency of where we are as a state. And they reflect agreement at a time when Michiganders don’t seem to agree on anything.

So let’s capitalize on this consensus and ensure that the vehicles of the future are indeed engineered and built in Michigan.

First, we need competitive incentives over the short term. When it comes to tax incentives and available mega sites, we’re not in position to compete, and all the while effective tools like Good Jobs for Michigan have been allowed to expire.

According to the poll there’s support for incentives tied to job creation. In fact, 58.7% of Michigan voters strongly support direct cash incentives provided that the incentive money is tied to a specific promise to create a minimum number of jobs or the company would have to return the incentives.

Our short-term efforts however need to accompany longer term policy, largely revolving around talent. The key to incentivizing automotive and mobility businesses to expand and invest in Michigan will be based on its ability to thrive in the knowledge-based economy. Attracting new companies will depend on our ability to produce and attract significantly more high-tech talent, software engineers for example, needed to win the digital economy, which will define the next era of automotive and mobility.

We know that our elected officials are aware more needs to be done. Governor Whitmer has a new Michigan Economic Development Corporation director who has hit the ground running. And State Senator Ken Horn has a very promising proposal tying incentives to job creation – something voters also support strongly per the poll.

But there’s still too much partisanship and not enough collaboration.

That needs to change and in a hurry. When 80% or more of voters in this day and age agree on something, there’s plenty of political benefit to get behind it.

Eroding a global leadership position built over the century since the Model T, doesn’t happen in a moment, or a year, or a decade.  It erodes over a century, or a century’s worth of innovation. As anyone in our beloved automotive industry will tell you, we’re seeing more innovation every five years than we saw in the last 50. That means our leadership can erode – or be fortified faster than ever.

That’s not hyperbole, it’s fact.

If Michigan doesn’t get on the same page from a policy stand point and ensure we’re competing in all facets – that loss of leadership narrative could be the story of the 21st century.

Glenn Stevens Jr is Vice President, Automotive & Mobility Initiatives for the Detroit Regional Chamber and Executive Director, MICHauto.

EV boom sparks new supply base in Michigan

Crain’s Detroit Business
Nov. 29, 2021
Kurt Nagl 

The multi-billion-dollar commitments of automakers and their suppliers to an electric vehicle future has spurred a battery-powered gold rush in Southeast Michigan.

Vehicles with a battery core as opposed to an internal combustion engine require a new kind of supply base and pose a unique set of challenges, from combustibility and safety issues to longevity and range concerns.

The supplier with a solution stands to cash in on the industry’s new direction. Many are hoping to seize on the opportunity by expanding their scope of business and placing big bets on products and services.

Automakers are poised to spend more than $300 billion to shift production to EVs over the next five years, according to consulting firm AlixPartners LP. General Motors Co., Ford Motor Co. and Stellantis NV have said they aim for up to 50 percent of new car sales to be EVs by 2030.

“You can always look at any disruption as an opportunity, and now is really a good time for a small supplier startup and also nontraditional companies usually outside the supply chain to enter into the game,” said Tingting Yan, professor of global supply chain management at Wayne State University. “All the OEMs and big tier ones, they are forced to think about how they need to restructure their existing supply base.”

Among the EV opportunists is Wei Wu, an entrepreneur who built a $100 million-a-year business and is banking on battery chemistry for the next chapter of growth.

His company, Ann Arbor-based Pacific Industrial Development Corp., started in 1992 as an importer of rare earth metals from China. It has grown into a major manufacturer of catalyst chemicals for the automotive and petrochemical industries.

Its next pursuit is solving one of the EV’s most worrisome problems: the potential for batteries to overheat and burst into flames. “Those are really critical things – to solve that safety issue and maintain the cost and also increase the battery cycle life,” Wu said.

GM’s EV production has been plagued by the issue. Other automakers including Volkswagen, Ford and BMW have dealt with similar problems.

A common cause of fires in lithium-ion batteries is when material from the battery’s two main parts, the cathode and anode, come into contact. Pacific Industrial is developing a ceramic-like, flame retardant material, whose composition is kept secret for competitive reasons, that is applied to the thin film separating the two, theoretically preventing that from happening.

Wu is confident in its application. Pacific Industrial this month opened a $2 million advanced battery materials lab in Ann Arbor, where a half-dozen Ph.D.-level employees are focused on developing the material. It could be the ticket to millions of dollars in new revenue — potentially $200 million in the next couple of years, Wu said, given the rapidly growing market.

The global market size for EV batteries is expected to grow from $27.3 billion this year to $155 billion in 2028, according to market research firm Fortune Business Insights.

“There’s a lot of players in those market segments,” Wu said of battery cell and pack supply. “In our area, this is still a niche market. It’s not very crowded.”

Wu’s battery material business is in the R&D phase and not generating significant revenue, but the company is engaged in joint development agreements and collaborations with local OEMs and startups. The company has several patents pending and expects the material to go to market within two years.

“People haven’t put a lot of effort in this area, and we think we are one of the leading players, actually,” Wu said.

American Battery Solutions, one of the new players in battery manufacturing, is seeing big growth and return on investment. The Orion Township-based battery maker started in 2019 with 12 employees and has expanded to 200 employees with an expected revenue of $50 million next year.

CEO Subhash Dhar is projecting $500 million in sales by 2025 and $1 billion by 2028 because, according to him, the market is ripe for the taking.

“It’s not a crowded space at all,” Dhar said. “There are a lot of people trying to get into this space but there’s not a whole lot of competition because to be in this space, you need three elements. You need the component supply agreement with suppliers, you need customers and you need the know-how to connect the two.”

Funding is another major factor. ABS is owned by principal investment fund KCK Group, which has invested $200 million in the company to date.

Most of the company’s sales are from battery supply deals for buses, delivery trucks and industrial equipment. Another prong of business is stationary grid-connected battery solutions, such as battery storage facilities for utility companies.

ABS declined to name its customers, citing nondisclosure agreements, but said it has around 15 clients with long-term deals.

Dhar said the company’s 120,000-square-foot plant in Michigan is focused on prototype production and testing, while its 180,000-square-foot plant in Ohio handles mass production. He said full-scale production of battery packs for buses and trucks is scheduled to start in the third quarter of 2022. He anticipates hiring another 100 employees in Michigan in that time frame.

Entrepreneurs are also finding new ways to plug into the EV boom. The Biden administration’s recently signed infrastructure package included $6 billion for companies in the EV space. That’s helped sparked development in areas from new battery technology to charging solutions.

The EV charger market is expected to grow from $17.6 billion this year to $112 billion by 2028, according to Fortune Business Insights.

William McCoy left careers in the real estate and automotive dealership industries in hopes of carving out a piece of the EV charging pie. McCoy moved to Michigan from Washington, D.C., two years ago with his wife Marissa McCoy, assistant general manager at Heidebreicht Chevrolet in Washington Township in Macomb County.

“I had a passion for EVs, but I also realized the infrastructure wasn’t there,” he said. “Instead of me trying to create an EV charger, I decided to tackle the hardest issue, which is installation.”

The McCoys invested around $9,000 to start Current Dealers LLC, an electrical contractor and service provider for EV chargers. In the past six months, the company’s handful of employees have installed more than 100 residential chargers and made sales of around $250,000. McCoy said it is targeting dealerships and grocery chains for larger growth and is expecting upward of $10 million in revenue next year.

“This need for EV chargers came about because dealers ended up in a situation where OEMs are saying, look you got to get yourself ready and prepared,” McCoy said.

Investing in EVs is not without risk and should be done in a measured fashion, especially for big automakers, which still get most of their money from the sales of traditional engine cars, Yan said. At the same time, playing it safe isn’t a winning strategy.

“It’s very risky,” she said. “Whenever you’re doing innovation, that means you invest a lot and you get a little out of it.”

View the original article.

Michigan Matters: EV’s Supercharging Impact Across Metro Detroit

62 CBS Detroit
Nov. 28, 2021

As the electric vehicle revolution unfolds,  companies, suppliers and organizations are adjusting as Joseph Grace, Vice President, Head of Physical and Functional Design & Integration, Stellantis; Vuk Milojkovic, CEO, BASF Toda America LLC; Glenn Stevens, Executive Director, MICHauto and Vice President, Automotive & Mobility Initiatives at Detroit Regional Chamber; and Rod Alberts, Executive Director of Detroit Auto Dealers Association, discussed on “Michigan Matters” airing 8 a.m. this Sunday on CBS 62.

Grace talked with Carol Cain, Senior Producer/Host, about the company’s goal to bring more electric vehicles to the global market and how its wind tunnel at its Auburn Hills headquarters is helping in that effort.

Milojkovic talked how BASF, a 156-year old company that started in Germany and grown  globally to include important operations in the electric space in Michigan, has been evolving. He discussed its Battle Creek plant which is creating products used on EV batteries.

Stevens talked how his organization—part of the Detroit Regional Chamber — is helping to promote the region for businesses tied to mobility – and how the push for electric vehicles presents unique challenges and opportunities. Stevens also talked about the Biden administation’s push for EVs which has included his recent visit to GM’s Factory Zero.

And Rod Alberts, who stages the North American International Auto Show and Motor Bella – held for the first time in September at the M1 Concourse—talked how dealers are adjusting to mobility changes.

View the original article.