A southeast Michigan battery maker got a new deal for state-driven business incentives Tuesday.
Back in 2022, Our Next Energy got approved for $200 million in state incentives to be spread over time. Now that number is getting revised downward to $150 million.
In return for the money, the company originally agreed to deliver 2,112 new jobs and invest over $1.6 billion total in a new Van Buren Twp facility. The new numbers cut back that promise to 1,606 jobs spread across both its Van Buren Twp and existing Novi location.
The project’s total investment is supposed to increase slightly. The timeline is also getting pushed back from 2030 to 2037.
In the years since Our Next Energy first got its grant, it has faced troubles as the EV market shrank under changing federal policy.
Madison Sorsen is with the Michigan Economic Development Corporation. She said, despite setbacks, the state still sees a future for its bet on electric vehicle battery technology.
“Just because there is a slower demand for electric vehicles than anticipated does not mean there’s no battery demand,” Sorsen said Tuesday.
She mentioned Our Next Energy has pivoted toward grid-level battery storage, train uses, and defense contracts.
The incentives come through the now-defunct Strategic Outreach and Attraction Reserve, or SOAR Fund.
The most recent state report shows the project has received a little over $70 million from the state so far. Officials say Our Next Energy has hit the benchmarks needed to qualify for the money it has gotten so far.
Lawmakers on both sides of the aisle have criticized the state’s business incentive efforts as ineffective. In a press release, Michigan House Appropriations Committee Chair Ann Bollin (R-Brighton) said the new contracts show why the state moved away from SOAR.
“Today, the job commitments are lower and the deadline to deliver has been pushed back by nearly seven years. This is another example of why Michigan should move away from large corporate handouts and focus on policies that help all employers grow and create jobs,” Bollin said.
The Michigan Strategic Fund Board oversees Our Next Energy’s grant. While the MSF Board granted the company a revised deal Tuesday, it also expanded a program originally meant to offer auto parts suppliers a path forward in an EV future.
The Michigan Auto Supplier Transition Program first started last year in six southeast Michigan counties. It uses a mix of state and federal dollars.
The MSF Board approved the expansion of that program to the rest of the state.
Chris Rishko is with the Michigan Economic Development Corporation. He said that’ll be useful as companies look to do more than just move away from internal combustion engine, or ICE vehicles.
“The original intention was to expand beyond ICE. But now it’s really where they can diversify their exports and their supply chain network to be more effective and really to open, expand their possibilities,” Rishko said.
Michigan received around $9 million in federal grants for the program.
