Updated March 17th, 2024 at 08:35 IST

Gotion sues US township over breach of contract for $2.4 bn plant

Gotion claimed that the township failed to fulfil its contractual obligations after initially approving the company's proposal to link Big Rapids' water system.

Reported by: Business Desk
Gotion | Image:Gotion
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Gotion vs. Green Charter: China's Gotion, also known as Guoxuan High-Tech Company, filed a lawsuit on Friday against Green Charter Township in Michigan, alleging a breach of contract concerning the connection of water lines to its proposed $2.36 billion battery component plant in the state.

The plant, situated in Big Rapids, approximately 60 miles (97 km) north of Grand Rapids, was anticipated to generate 2,350 employment opportunities and manufacture up to 150,000 tons of cathode material and 50,000 tons of anode material annually.

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In the lawsuit filed in a federal court in Michigan, Gotion claimed that the township failed to fulfil its contractual obligations after initially approving the company's proposal to link Big Rapids' water system to the project.

Gotion is requesting a preliminary injunction from the court to compel the township to connect the water lines to its facility.

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The township has not yet responded to a request for comment from Reuters.

Following the Biden administration's 2022 Inflation Reduction Act, electric vehicles must be assembled in North America to qualify for tax credits. Consequently, automakers have been actively seeking to increase their battery and component production capacities.

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Gotion, a publicly traded entity in China and partially owned by German automaker Volkswagen, is among the companies aiming to capitalise on the burgeoning demand for electric vehicles and related components.

(With Reuters inputs)

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Published March 17th, 2024 at 08:35 IST