A company linked to the Chinese Communist Party (CCP) could ultimately receive $7.5 billion in federal taxpayer funds to subsidize its production at an Illinois factory, according to Good Jobs First, a business watchdog.
Gotion Inc., which is tied to the CCP via its China-based parent company, Gotion High-Tech, could be eligible for the federal taxpayer dollars thanks to the 45X production tax credit provision in the Inflation Reduction Act at its Manteno, Illinois facility, Jacob Whiton of Good Jobs First told the Daily Caller News Foundation. The $2 billion facility, set to be built within about 30 miles of two U.S. military installations, will also receive more than $500 million worth of subsidies from the state of Illinois, bringing the total amount of taxpayer dollars it could ultimately receive up to about $8 billion.
The 45X tax credits that Gotion Inc. could receive will be determined by the Manteno plant’s annual output of battery cells and packs, which the company places at 40 gigawatt hours (GWh) and 10 GWh, respectively, according to Whiton. Between the 45X credits available for each type of technology, Gotion Inc.’s Manteno plant will be eligible to receive approximately $1.5 billion each year for the first five years that it is in operation, assuming that the factory opens as scheduled and meets its own output projections for each product, Whiton told the DCNF.
“Recipients can choose to either sell their credits or make them refundable for five years, so if their value exceeds the company’s federal income tax liability, the credits can be effectively converted into cash,” Whiton told the DCNF. (RELATED: Dem Senate Candidate Who Signed NDA Covering CCP-Linked EV Battery Maker Votes Down Bill To Block Gas Car Bans)
A June 2017 CCP notice proposed using Overseas Talent Work Stations & the Thousand Talents Plan to recruit experts for a China-based science center
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The company will also receive a state subsidy package valued at around $536 million for the Manteno plant, according to an Illinois press release announcing the factory. Combined with the federal credits it could eventually receive, the $2 billion facility could end up earning a total of about $8 billion in subsidies for the company if the plant meets its projected output.
While it is unclear how much money the company’s Michigan operations may eventually unlock, it appears to be eligible for federal tax credits in addition to $715 million worth of already-announced state subsidies given that CFIUS reportedly approved the project. Any potential federal credits that the company’s Michigan operations could provide are not included in the Good Jobs First estimate.
Chuck Thelen, Vice President of North American manufacturing for Gotion Inc., stated that “the Chinese Communist Party has no presence in the North American company,” an Aug. 13 report by Politico.
However, CCP officials established a talent recruitment “work station” at Gotion Inc.’s Fremont, California, headquarters in 2017, the DCNF reported. “Work stations” are a tactic that CCP officials use to attract Western talent to work in the Chinese mainland.
Gotion Inc. is listed with the Department of Justice as a Chinese foreign principal, the Daily Caller News Foundation reported. Gotion High-Tech employed 923 active CCP members as of 2022, and also established a joint venture with a State Department-identified “Communist Chinese Military Company Subsidiary” in 2016.
Li Zhen, Gotion High-Tech’s CEO, is also a member of the CCP, and was quoted in the official Illinois press release with Democratic Gov. J.B. Pritzker announcing the Manteno plant.
“All that we see here [in Illinois] are of enormous value to us: an enabling business environment, a supportive state government for the new energy industry and their highly efficient work, as well as the prospects of the State of Illinois in the coming years,” Zhen said.
“It’s my pleasure to welcome a world-leading battery manufacturer — Gotion — to Illinois,” Pritzker remarked in the same statement.
The offices of Pritzker, Democratic Michigan Gov. Gretchen Whitmer, the White House, Gotion High-Tech and Gotion Inc. all did not respond to requests for comment.
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