MEDC approves incentives for EV battery, parts manufacturing
A subsidiary of auto supplier Dana Inc. will invest $54.2 million to lease space in Auburn Hills to manufacture plates to cool electric-vehicle batteries, and the way has been cleared for LG Energy Solution to expand its battery manufacturing site in Holland.
The governing body of the quasi-governmental Michigan Economic Development Corp. on Tuesday approved incentives for the Dana project and a procedural step for LGES that leaders championed as indicative of Michigan's continued leadership in the shifting vehicle space.
"The project contributes to the MEDC's ongoing efforts," agency CEO Quentin Messer Jr. said during a briefing ahead of the approval of the Dana project, "to strengthen Michigan's leadership in automotive manufacturing and builds on the state's work to position itself as a global leader in the future of mobility and vehicle electrification."
Dana Thermal Products LLC will receive a $2.5 million Michigan Business Development Program grant for the Auburn Hills project, which is expected to create 200 jobs on top of the company's existing 186 workers.
The new operations will manufacture battery cooling plates for global automakers. The plates extract heat from lithium-ion battery cells. That's important for better performance of batteries, faster charging and safety.
The Dana subsidiary will lease a facility, but needs $4 million of leasehold improvements to prepare the space and $40 million for machinery and equipment. It will include brazing lines and associated stamping and post-powder coating.
Dana looked at other locations in Canada and the southeast United States where similar products are being made. It likes Michigan's manufacturing and engineering talent and proximity to some customers, but it needs assistance to overcome cost competitiveness disadvantages, according to a memo from Matt Chasnis, the MEDC's business development project manager.
The MEDC previously approved in March for a $1.7 billion investment by LG Energy Solution Michigan Inc. almost $190 million in grants and tax abatements to quintuple battery-cell production at its 5-megawatt-hour plant in Holland. The focus is long cell batteries, which can offer greater range to EVs and simplify battery packs, according to a briefing memo from Chris Cook, the MEDC's managing director of capital access.
The Michigan Strategic Fund board on Tuesday approved an inducement resolution totaling $500 million for the issuance of private bonds, making another funding avenue potentially available for the project around solid waste mitigation or wastewater treatment from the manufacturing process. Bank of America Securities has indicated interest in supporting the bond issue, according to the memo. This wouldn't involve public dollars.
"This is a procedural step," Cook said. "This effectively would allow the company to begin to incur costs, which could ultimately be reimbursed through an authorization and a separate action later. The funding actually is bond that the would be sold publicly. ... The reason that the MSF is involved is that it is the state entity which has authority to attach a tax exempt status to a bond issuance."