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Stellantis chooses Indiana over Michigan for EV battery factory

Stellantis sign
Stellantis, which produces the Chrysler brand and operates its North American headquarters from Auburn Hills, announced Tuesday that it will build a massive battery plant in Kokomo, Indiana. Michigan had hoped it was in the running for it. (Jonathan Weiss / Shutterstock.com)

The European parent company of Chrysler looked just past Michigan’s border to choose Indiana for its newest $2.5 billion electric vehicle factory.

The move — announced Tuesday by Stellantis and its partner, Samsung SDI — is said by the companies to generate 1,400 jobs and solidify EV production in northern Indiana, about 100 miles south of Niles, Michigan.

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“It’s a win for American manufacturing,” Glenn Stevens, executive director of MICHAuto, Michigan’s organization dedicated to the automotive industry, told Bridge Michigan. “There’s no doubt about that.

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“But we would have liked to have had that plant in Michigan.”

State officials have said attracting the growing EV production capacity is critical for Michigan’s future. 

While celebrating a handful of multi-billion-dollar EV wins in the past year — including battery plants in Lansing and Holland, along with production expansion at General Motors’ Orion Township factory — other reminders keep underscoring that Michigan is battling for its place in electrification.

Hyundai, which operates a technical center east of Ann Arbor, just chose eastern Georgia for a $5.5-billion factory. Toyota, which operates an R&D facility south of Ann Arbor, picked North Carolina for its new battery plant. 

And last fall, Ford Motor Company looked to Kentucky for a new battery plant and Tennessee to build its Blue Oval City EV megacampus, sites attracting a combined $11.4 billion in investment by the Dearborn-based automaker.

“Today’s announcement proves once again that the landscape remains fiercely competitive for automotive and EV manufacturing projects,”  Quentin Messer Jr., CEO of the Michigan Economic Development Corporation, said in a statement.

Stellantis’ Dare Forward 2030 strategic plan calls for annual sales of 5 million EV units globally by 2030, including half of all of its U.S. auto and light duty truck sales. 

To reach that goal, the company — like Ford, GM and others — is aligning with global battery companies to increase production, often in close proximity to the vehicle assembly facilities. Stellantis plans five massive battery factories, with three more to join the ones already announced in Windsor, Ontario, and now Kokomo.

Michigan increased efforts to become more competitive for new factories in 2021 when it established $1 billion in funding for economic development incentives. The Legislature approved the bipartisan Strategic Outreach and Attraction Reserve (SOAR) legislation that created the fund in mid-December. Gov. Gretchen Whitmer approved it shortly thereafter.

The move signaled statewide political unity toward attracting major projects to the state, said Stevens of MICHAuto. Other key roles in corporate site selection include talent development and an accessible workforce; electricity access for the battery packs; and project-ready sites, he said.

The state has one identified so-called “mega-site” capable of accommodating a large-scale project. Located in Marshall, near Battle Creek, it has been available for several years but it is not close to being ready for acquisition or construction, James Durian, CEO of the Marshall Area Economic Development Corporation, told Bridge last spring.

Since the SOAR fund was approved, Durian said, the MDEC has initiated work on the property, including taking soil borings for analysis, “to make it competitive with (land in) other states.” 

Other Michigan sites have not received state-level investment to bring them up to current development standards, one of the goals of the SOAR fund.

Messer of the MEDC said Stellantis’ decision underscores “the urgency required in expanding our site preparedness efforts.” 

Stellantis remains critically important to Michigan’s automotive industry, Stevens said. Chrysler was founded in the state and still has over 41,000 employees in Michigan. 

Its ties to Michigan include factories in Dundee, Trenton, Sterling Heights and Detroit, but also engineering and R&D, including at the Auburn Hills corporate headquarters for North America.

“They are no doubt one of our most important corporate citizens when it comes to research development, engineering and advanced manufacturing,” Stevens said. 

“So, as electrification happens, we want to make sure that we're right there as partners with them.”

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Stevens said Michigan is making progress on workforce training needed for the EV and other high-tech industries.

On Tuesday, the Michigan Strategic Fund approved $1.5 million in support for the Semiconductor Apprenticeship Network Program, which is intended to address a shortage in the semiconductor workforce, and another $1.5 million for a MiREV EV Jobs Academy planning grant. Announced by Governor Gretchen Whitmer in September 2021, the Michigan Revolution for Electrification of Vehicles Academy/Academies initiative was created to prepare workers for the mobility industry.

Meanwhile, construction on the Kokomo plant, which will be located near an existing Stellantis factory in Kokomo, will begin later this year, the company said. Information on its size and specific location was not available Tuesday afternoon.

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