Two billion dollars! Gotion invests in battery plant in US Illinois, may start production next year

On September 9, a surging news reporter confirmed from Gotion (002074), headquartered in Hefei, Anhui Province, that Gotion has been constructing a battery super factory in Manteno, south of Chicago, Illinois, through its subsidiary, Guoxuan America (Gotion Inc).

The factory, with a planned investment of US$2 billion and a planned site of about 150 acres, will have a capacity of 40Wh of lifepo4 battery packs per year and is expected to go into production next year. Power battery products will be supplied to local electric vehicle manufacturers in the U.S. to meet the growing demand for batteries in the electric vehicle industry in the North American market.

The battery plant project has also become the largest electric vehicle battery investment in the history of Illinois.

At the same time, according to Gotion, the Illinois battery factory project does not require a new factory but plans to reuse the infrastructure of an existing factory in Manteno, which saves resources and improves construction efficiency. In addition, the surging news reporter also learned that the U.S. Michigan battery material factory project announced by Guoxuan Gaoke last year is still in normal progress.

According to a press release issued by the Illinois Governor's Office on Sept. 8, Illinois Governor JB Pritzker and local officials attended the groundbreaking ceremony for the project, hailing it as an important step for Illinois in developing its EV ecosystem and supply chain.

"2,600 new jobs, a $2 billion mega-factory, and the most significant new manufacturing investment in Illinois in decades is the latest proof that we are in a new phase. Illinois is on the rise and we remain open to business investment." Pritzker said.

Lieutenant Governor Juliana Stratton said, "This project will transform our state's economic landscape, create new jobs, and demonstrate our continued commitment to making Illinois a renewable energy manufacturing center."

For his part, Gotion's chairman, Li Zhen, said, "We believe that Gotion's battery technology will help promote electric transportation in North America as well as economic and trade exchanges between the U.S. and China."

According to Pritzker, Gotion will also receive up to $536 million in future funding subsidies. The subsidies will come from the Illinois REV incentive program (Reimagining Energy and Vehicles) and a fund called Invest Illinois. Through the Reimagining Energy and Vehicles program, CXC will receive $125 million. In addition, GHS will be eligible to receive $213 million in tax incentives over the next 30 years.

Additionally, it was reported that the State of Illinois will fund a manufacturing training academy near the battery plant to train skilled battery production workers locally.

The Illinois battery plant project is the second major investment in the U.S. by GHS after announcing last October that it would invest $2.4 billion to build a battery materials plant in northern Michigan. The Michigan battery materials factory includes a plant that produces 150,000 tons of battery cathode materials per year, and two plants that produce 50,000 tons of battery anode materials per year. In June this year, the U.S. federal government approved the plant.

In the industry's view, Gotion's investment in Illinois will, on the one hand, promote the acceleration of lithium iron phosphate battery technology in the United States, and help the United States to further reduce the cost of electric vehicles that mainly use nickel-cobalt-manganese ternary lithium batteries of Japanese and South Korean battery companies, to accelerate the cultivation of new energy automobile market in the United States.

Gotion is especially famous among domestic battery enterprises for its lithium iron phosphate material technology. In May this year, Gotion also released a new generation of L600 Qichen lithium battery core and battery pack, the battery cathode material is based on a lithium iron manganese phosphate system, the system energy density is 190Wh/kg, and it can realize a range of 1000KM.

On the other hand, the localized production in the United States will undoubtedly help Gotion expand the customer base of car companies overseas, especially in the United States. Currently, Guoxuan Hi-Tech's domestic customers are Great Wall, JAC, Changan, Geely, BAIC New Energy, and Chery, and it is the top battery supplier of JAC and Chery and has been shortlisted in the battery supplier circle of GAC EAN this year.

In the overseas customer group, Gotion has not only obtained Volkswagen's order, but also supplied Lithium Iron Phosphate batteries to VINFAST, a new car-making force in Vietnam, and not only that, Gotion has also subscribed for 15 million shares of each other's new issuance.VINFAST has landed on Nasdaq recently, which has been in full swing, and it is intended to make a big impact on the US market by constructing automobile factories in the US mainland. With GXG's U.S. battery plant coming online in the future, the two sides may also work more closely together.

According to the latest data of SNE research, a global information organization, from January to July this year, Gotion's installed capacity of power batteries in the world was 7.8GWH, with a year-on-year growth of 10%, and its market share was 9.3%, ranking ninth in the world.

The headquarters of Gotion's subsidiary, Gotion America, is in California, U.S.A.