Massive Chinese firm sues small Michigan town over opposition to controversial EV battery project

The subsidiary of a billion-dollar Chinese energy firm is suing a tiny Michigan town over local officials' opposition to the company's massive electric vehicle (EV) battery project.

Gotion Inc. – whose parent company, Gotion High-Tech is based in Hefei, China, and has documented ties to the Chinese Communist Party – filed a breach-of-contract complaint against Green Charter Township in the U.S. District Court for the Western District of Michigan. The lawsuit is the latest escalation in a months-long feud between Gotion and Green Charter officials who have pumped the brakes on the company's proposed project within the town's jurisdiction.

"We are saddened and disappointed by their decision to proceed in this direction," Green Charter Supervisor Jason Kruse told Fox News Digital in a written statement.

"As Township Supervisor, my number one concern is protecting the interests of the people of Green Charter Township, and we will vigorously defend our township’s position in this matter," Kruse added. "We might be a small community, but we refuse to be bullied."

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Li Zhen, founder and chairman of Gotion High Tech, during the Bloomberg New Economy Forum in Singapore, on Nov. 10, 2023. (Lionel Ng/Bloomberg via Getty Images)

According to the lawsuit, Kruse and other elected Green Charter leaders have pursued unlawful actions against the company and are "motivated by clear anti-Gotion animus." Gotion asked the court to reinstate permits canceled by the township, thereby allowing its battery project to move forward, and further filed a motion for preliminary injunction, requesting that the court intervene quickly.

"It’s unfortunate that Gotion has had to resort to litigation to get the township to comply with their obligations under the agreement," Chuck Thelen, Gotion’s vice president of North American operations, said in a statement shared with Fox News Digital. "We’re unable to comment further since this is now an ongoing legal matter."

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The issue dates back to October 2022, when Democratic Michigan Gov. Gretchen Whitmer announced Gotion would invest $2.4 billion to construct two large production plants along with other supporting facilities spanning 260 acres in Green Charter, which is located in northwestern Michigan. Whitmer said the project would shore up Michigan's status as the "global hub of mobility and electrification."

Under the economic development package awarded to Gotion, the company is set to receive $175 million in taxpayer-funded incentives and more than $500 million in tax incentives.

Images from a video published on Gotion High-Tech's website. The video shows the company hosted various Chinese Communist Party allegiance events for employees. (Gotion High-Tech)

However, the project has generated substantial local uproar, with residents repeatedly expressing concern about Gotion's ties to China and calling on the Whitmer administration to cancel the project. For example, the projects' opponents have noted Gotion High-Tech's corporate bylaws require the company to "carry out Party activities in accordance with the Constitution of the Communist Party of China."

In addition, Gotion High-Tech hosted multiple company trips in 2021 to CCP revolutionary memorials in Anhui Province, China. During the trips, Gotion High-Tech workers wore Red Army outfits and pledged to "fight for communism to the end of my life."

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On Dec. 13, 2022, Green Charter Township approved a resolution in support of Gotion's project. Months later, in August 2023, the township authorized then-Supervisor James Chapman to privately negotiate the terms of a development agreement with Gotion, that is required to approve certain infrastructure at the site of the project.

That agreement was executed between Gotion and Green Charter on Oct. 10, 2023.

Gov. Gretchen Whitmer waits to speak at an election event on Aug. 2, 2022, in Grand Rapids, Michigan. (Bill Pugliano/Getty Images)

But, while the town pursued the agreement and negotiations with Gotion, local residents simultaneously organized a recall effort that proved successful in early November 2023. Every member of the town board, including Chapman, was ousted. After Kruse and the other new members of the board took office, they immediately rescinded the October development agreement.

"The Development Agreement was and remains a legally binding agreement between Gotion and the Township," Gotion's federal lawsuit states.

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After the lawsuit was filed, meanwhile, Gotion was blasted by former U.S. Ambassadors Peter Hoekstra and Joseph Cella, who have led opposition to the company's plans over national security concerns. Last year, the pair founded the Michigan-China Economic and Security Review Group, a watchdog group devoted to reviewing Chinese economic investments across the country with a particular focus on Michigan.

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"PRC-based and CCP-tied Gotion continues to carry on every bit the way a company based in authoritarian Communist China would – in secrecy, heavy handedness, above the law operations, and reckless disregard for the environment," they said in a joint statement Monday. "Gotion, a $40 billion company, does not like the fact five elected officials who rolled over for them were recalled, and now they are suing over alleged 'breach of contract' to get the results they want, contrary to the will of the people."

"These are every day citizens from both sides of the aisle in Green Township that are fighting this," they added. "They are simply seeking to de-risk from this type of subnational incursion from Gotion that our national security and intelligence operations have warned present a national security threat, and preserve their pristine natural surroundings, water, and habitats. This is precisely why every day hard working Americans distrust government and business elites."

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Former CIA Directors Leon Panetta and Mike Pompeo have also raised the alarm on the project.

Gov. Whitmer's office did not immediately respond to a request for comment.