GM to invest $6.5 billion at 2 Michigan sites for EV, battery production

Kalea Hall Craig Mauger
The Detroit News

General Motors Co. is expected to detail plans Tuesday to invest $6.5 billion in two Michigan sites and create 4,000 jobs in the state, according to a meeting agenda and two sources familiar with the situation.

The Detroit automaker is scheduled to announce its investment at an event in Lansing. The news would come a day before Gov. Gretchen Whitmer’s State of the State address, which is expected to highlight the state’s economic development efforts as the auto industry pivots to electrification.  

Opened in 2006, Lansing Delta Township assembly is GM’s newest plant in the U.S. aside from the Brownstown Battery Assembly plant opened in 2009. Lansing Delta has been one of the pioneers of the automaker’s manufacturing technologies in recent years.

GM and battery partner LG Energy Solution are planning a $2.5 billion investment in Lansing near GM's Delta Township plant for a battery cell manufacturing site that will support a growing list of coming EVs. 

GM also received a tax abatement for a $1.3 billion investment at its Orion Assembly plant in Lake Orion to build EVs, but the investment amount there is expected to total $4 billion. Sources previously told The Detroit News the automaker plans to build electric trucks there. 

"GM appreciates the support it has received from the Governor, the State Legislature, Orion Township, the City of Lansing and Delta Township related to two prospective projects that GM is considering in Orion Township and Lansing," GM spokesman Dan Flores said in a statement. "Until these projects receive final approval, we have no comment on potential announcement timing." 

Still, GM's move to make electric-vehicle and battery investments in its home state comes after Michigan lost out on an $11.4 billion investment by Ford Motor Co. and partner SK Innovation in Kentucky and Tennessee. 

In the wake of that loss, state lawmakers and Whitmer passed a hefty business incentive package to attract similar investment in Michigan. The agenda for the Michigan Strategic Fund’s board meeting on Tuesday says the GM project is seeking a Strategic Site Readiness Program grant and a Critical Industry Program grant.

The grants were made possible by legislation Whitmer signed into law in December, featuring $1 billion for economic development incentives. The bills created the Strategic Outreach and Attraction Reserve (SOAR) Fund in the Michigan Department of Labor and Economic Opportunity. The $1 billion for 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.

Local governments in Lansing, Delta Township and Orion Township also signed off on tax incentives to keep GM interested. The Orion Township board last week approved a tax abatement for the project that is said to either create or retain 2,000 jobs. The abatement is for 12 years plus three years during the construction phase, which is slated to start in July. 

In December, Lansing City Council unanimously approved an industrial facilities tax exemption for the battery cell plant there. The industrial facilities tax exemption absolves for up to 12 years the facility from real or personal property taxes, according to the Michigan Department of Treasury. 

Council also endorsed another tax incentive for the project by passing a resolution recommending the formation of a renaissance zone for the development in an application to the Michigan Strategic Fund.

A renaissance zone exempts persons and property from taxes levied by the city. In this case, the renaissance zone would be in place for 18 consecutive years starting in December 2022, or whatever date is set by the Michigan Strategic Fund, the governing body of the Michigan Economic Development Corp.

"It is expected that General Motors will be presenting a business investment project at next week’s board meeting," said Otie McKinley, spokesman for the Michigan Economic Development Corp. The MSF board will meet at 8:30 a.m. Tuesday. 

Both Lansing and Delta Township representatives approved extending a previously existing agreement that transfers the property from the township to the city. Lansing assesses and collects the taxes on the property. The tax revenues are then divided between the two.