Chrysler parent Stellantis and South Korea’s Samsung SDI say they will invest more than $2.5 billion and create 1,400 jobs at a planned electric vehicle battery plant in Kokomo, Indiana.
The plant, which will be the second EV battery plant announced for the automaker in North America, is slated to begin production of lithium-ion batteries in early 2025, the companies said Tuesday, noting that the investment total could gradually increase to up to $3.1 billion.
The announcement was celebrated in Indiana but cited by some Michigan leaders as a big miss for the Wolverine State.
Indiana Gov. Eric Holcomb trumpeted the significance of landing the automaker’s only planned EV battery plant in the United States as “news that is heard around the world.” Holcomb was at a community college in Kokomo, along with local, state and company officials, for the announcement Tuesday. He said he had just been at the World Economic Forum in Davos, Switzerland, where he was “selling the state of Indiana to anyone who would listen. … With today’s news, we all just became a lot richer.”
The plant, in an area where Stellantis already has multiple facilities, including engine and transmission factories, and a lengthy history because of its Chrysler roots, will supply battery modules for a range of vehicles produced in North America. In March, Stellantis and LG Energy Solution announced a $4 billion investment to build an EV battery plant in Windsor, Ontario. That project is expected to create 2,500 new jobs in the city where the Chrysler Pacifica minivan is built.
The projects in both cities come with substantial government support, incentives worth hundreds of millions of dollars.
Stellantis CEO Carlos Tavares said the Kokomo battery plant announcement reinforces the company’s efforts described earlier this year in its business plan, named Dare Forward 2030.
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“Just under one year ago, we committed to an aggressive electrification strategy anchored by five gigafactories between Europe and North America,” Tavares said in a statement. “Today’s announcement further solidifies our global battery production footprint and demonstrates Stellantis’ drive toward a decarbonized future outlined in Dare Forward 2030.”
Stellantis, which also owns the Jeep, Ram, Dodge, Fiat, Alfa Romeo and Maserati brands, has said it will spend $35 billion in EV-related investments across its brands through 2025. The company plans to launch an electric Dodge muscle car and Ram 1500 pickup in 2024.
During an online meeting with reporters Tuesday, Tavares touched on why Kokomo, which is just over an hour’s drive north of Indianapolis, was selected.
“We feel great in Kokomo because we have already a very significant manufacturing footprint in Kokomo. So it’s a place that we know well. We know the people, we know their skills, their talents,” Tavares said.
But he also acknowledged that states were competing for the plant.
“Did we create competition among different states? Yes, we did. It would have been unprofessional not to do so,” Tavares said.
Indiana had a “good proposal,” he said.
The package of potential incentives is substantial, although information supplied by the state noted that eligibility is possible only after the “investments are made and employees are hired and trained.” Incentives from the Indiana Economic Development Corp. could reach as much as $186.5 million, not counting “repayable financing support” to aid construction and infrastructure or additional incentives provided by local and county governments as well as other entities.
The selection of Indiana for the automaker’s second EV battery plant announcement in North America means a loss for Michigan. Mark Stewart, chief operating officer for Stellantis in North America, said earlier this month during an event in Detroit that Michigan remained “in play” for the plant.
Questions about Michigan’s competitiveness had been raised by lawmakers and others after Ford in September announced sites in Tennessee and Kentucky for $11 billion in EV-related investments that promised almost 11,000 jobs.
But Michigan has landed more recent investment announcements, including a $1.7 billion expansion at LG Energy Solution’s battery plant in Holland in western Michigan and GM’s $7 billion investment — described as the single largest investment announcement in company history — to upscale its EV-related production at a number of facilities in the state.
Michigan Economic Development Corp. CEO Quentin Messer Jr. referenced both investments in describing Michigan’s efforts to compete.
“Today’s announcement proves once again that the landscape remains fiercely competitive for automotive and EV manufacturing projects. Michigan is up to the challenge, with our rich manufacturing legacy, highly skilled workforce and globally-connected location,” Messer said. “Like other states or provinces, Michigan is competing aggressively to earn future investments by Stellantis. We must continue to do the work that builds a championship economy — we are seeing again today the urgency required in expanding our site preparedness efforts, for example.”
Bobby Leddy, spokesman for Gov. Gretchen Whitmer, said the mobility industry in Michigan is stronger than ever, with billions of dollars in auto investments and thousands of new jobs, but the state is always competing for every job and dollar of investment.
“We have built a strong partnership with Stellantis over the years, working together to secure long-term opportunity, including the company’s generational $4.5 billion investment in 2019 bringing the first new automotive assembly plant to Detroit in 30 years,” he said, referencing the Detroit Assembly Complex — Mack plant, where new versions of the Jeep Grand Cherokee are built.
“Working together with the Legislature, we must keep making forward progress to put Michigan in the best position to compete for every project. As the industry evolves at a rapid rate, Gov. Whitmer will continue to put her foot on the gas to get deals done that create jobs and put Michiganders first,” he said.
Legislators also weighed in.
House Tax Policy Committee Chairman Matt Hall, R-Comstock Township, did not blame the governor or anyone in particular for another potential manufacturing miss. Instead, he said lawmakers and the administration need to continue to find ways to both help local leaders make potential sites more ready for big employers while continuing to explore tax changes that may persuade a company to expand or move to Michigan.
“This is really about the economic future of our state. We’re the automotive state and we want automotive manufacturing in our state,” said Hall, whose district includes the 1,700-acre Marshall megasite.
“We need to focus on the solutions. And my view of the solutions is by investing more and empowering and working with these local economic development organizations like Southwest Michigan First in my region, to develop this inventory of sites and make sure we have sites for all kinds of new projects.”
Investing in local economic development organizations may mean new funding from state lawmakers, he said. But Hall stressed local leaders are in the best position to understand what each individual development site might need to be the most competitive for a potential manufacturing plant.
He’s also proposed legislation to create a research and development tax credit, which would allow qualified businesses in automotive or semiconductor industries to essential write off up to 15% of certain expenses. Many other states offer such a credit, he said, including Indiana.
“This might not have made the difference on this deal, but it certainly would have helped,” Hall said. “I’m continuing to work on that, to make Michigan a more attractive place to do research and development.”
Sen. Ken Horn, R-Frankenmuth, chairman of the Senate Economic and Small Business Development Committee, described the project as a loss for the state.
“We have a lot of big opportunities ahead of us in Michigan, and although we won’t win them all, this was a missed opportunity to bring in more high-paying jobs to our state,” Horn said. “We took some big steps in November and December to give Michigan the tools to secure opportunities like this one, but the governor needs to commit to the all hands on deck approach. We need to start communicating at all levels to ensure our success in attracting these jobs for Michiganders. … Every time we lose another big deal, Michigan’s risk of losing more skilled and educated workers increases.”
Although the plant won’t be operational for some time, union officials are already looking to the future workforce there in hopes of organizing it.
UAW President Ray Curry said in a statement that the “UAW applauds the decision to invest in domestic production, and our union looks forward to being a part of its success.”
UAW Vice President Cindy Estrada, director of the union’s Stellantis Department, said the union hopes to negotiate “an agreement with Stellantis that brings this new plant under our master agreement with traditional wages and benefits.”
Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence. Become a subscriber.