GM wins tax abatement for potential $1.3B EV investment at Orion plant

Kalea Hall
The Detroit News

Orion Township officials on Tuesday approved a tax abatement for a proposed $1.3 billion investment by General Motors Co. to build electric vehicles at its Orion Assembly plant in Lake Orion. 

GM requested the maximum period permitted for the tax abatement: 12 years, plus three years during the construction phase for the investment, which is expected to lead to the creation or retention of 2,000 jobs, GM said in its tax abatement application, which The Detroit News previously obtained. Property improvements would start in July, the application said.

"GM sincerely appreciates the support the Orion Township Board of Trustees showed by approving our tax abatement application this evening," GM spokesman Dan Flores said in a statement. "Securing all available tax incentives plays a critical role in any business case moving forward. Approving our tax incentive application is certainly a positive step forward, however, the proposed project is not approved. I’m not going to speculate on GM leadership making a final determination on the business case under development."

In its application, GM wrote the "proposed investment is primarily for the construction of several additions and land improvements to support electric vehicle production."

Sources previously told The News GM plans to use the plant to build electric trucks based on its new Ultium battery-electric platform. The recalled Chevrolet Bolt EV and EUV are currently assembled there, but production is down through February as GM prioritizes battery module replacements for the recalled Bolts. 

Orion Township Trustee Mike Flood was happy to see the abatement approved, saying during the meeting that the investment will benefit the Orion area, the wider region and state. He congratulated GM and UAW Local 5960, which represents Orion workers. 

How much GM will save from the abatement is not yet known "because the value for GM’s proposed facility has not been determined. We need the taxable value to calculate the property tax savings," Orion Township Treasurer Donni Steele said in an email. 

GM previously filed to receive an abatement for a $160 million investment to build a new battery pack assembly line at the Orion plant, but the automaker asked the township to pull that application and submitted a new one in early January. The full investment at Orion is likely to be significantly more than $1 billion. For example, GM invested more than $2.2 billion to transition its Factory Zero Detroit-Hamtramck Assembly Center to build EVs. 

GM is also looking to invest billions in Delta Township near Lansing for a battery cell manufacturing plant it's proposing to build there with battery partner LG Energy Solution. GM also applied to receive local and state tax breaks for that project. 

The proposed investments by GM follow rival Ford Motor Co.'s $11.4 billion investments with partner SK Innovation of South Korea to build an assembly and battery plant in west Tennessee and battery plants in Kentucky, which spurred state lawmakers in Lansing and Gov. Gretchen Whitmer to push through a hefty business incentive package to attract similar investment in Michigan.