(Yicai) Oct. 26 -- Gotion High-Tech, whose biggest investor is Volkswagen Group, has confirmed that the Chinese electric vehicle battery giant will build a USD2.4 billion battery project in Michigan over a year after the US state’s governor made the announcement.

The project, to be located in Mecosta County, will likely cover an area of about 276.4 acres, the Hefei-based firm said yesterday, with construction due to complete on Dec. 31, 2031. Gotion’s phased investment and Michigan’s subsidies for the project have been finalized, it added.

The information disclosed is generally consistent with with the statement released by Michigan Governor Gretchen Whitmer on Oct. 5 last year. Gotion will build a factory in Big Rapids to produce up to 150,000 tons of lithium-ion battery cathode material and two plants with an annual output of 50,000 tons of anode material a year, said Whitmer. 

Gotion signed the land purchase deal, while its US unit inked a Critical Industry Program Grant Agreement, Strategic Site Readiness Program Development Agreement, and other documents with the Michigan government on Oct. 24, the firm said.

North American demand for lithium-ion batteries is growing with the global expansion of the new energy industry, Gotion pointed out. The US government's Inflation Reduction Act and regulations will encourage and support local development of the sector's supply chain, it noted. 

Building the anode and cathode material factory in Michigan is intended to improve the North American supply chain and secure the production and supply of lithium-ion batteries in the region, Gotion said. As construction work on the project will take a long time, it may face uncertainties such as geopolitical and trade protection changes, it added. 

Founded in 2006, Gotion's installed capacity reached 6.04 gigawatt-hours in the first half of this year, ranking fifth in China with a 4.2 percent market share, according to data from CGII. Its batteries will be installed in Volkswagen's cars in Europe next year. Its US subsidiary mainly researches, develops, and sells power batteries. 

The US Inflation Reduction Act, which came into effect in August last year, has imposed harsh restrictions on the local production of battery raw materials and components for clean energy vehicles bought by US consumers, according to analysts. This has benefited South Korean firms, the biggest overseas rivals to Chinese battery makers, they added.

Gotion's shares [SHE: 002074] rose 0.1 percent to close at CNY21.92 (USD3) apiece in Shanghai today.

Editor: Martin Kadiev