Illinois Governor JB Pritzker has signed a deal with Chinese Communist Party (CCP)-linked Gotion Incorporated to open an electrical vehicle battery-assembly plant in Manteno, Illinois. As part of the agreement, $536 million in tax incentives will be offered to the company to encourage the $2 billion investment in the EV battery plant. This move comes after several failed attempts by Gov. Pritzker to attract EV battery manufacturers to the state.
Concerns have been raised about the Chinese ownership of Gotion. The president of Gotion, Chen Li, is a known member of the Chinese People’s Political Consultative Conference, a significant part of the Chinese Communist Party. Furthermore, his father, Zhen Li, who founded Gotion Energy Company in 2006, has a long history with the CCP and remains a prominent member of the Chinese parliament.
Critics argue that China’s dominance in the EV battery manufacturing sector is a strategic move to control critical infrastructure and industries around the world, as part of its globally-focused Belt and Road initiative. China is said to be overproducing EV batteries, which could potentially force lower prices and drive rivals out of business. Additionally, the country is believed to have a 10- to 15-year head start on the rest of the world when it comes to making EV batteries.
The decision for China to invest in the U.S. and Illinois specifically is seen as a strategic move to maintain its competitive advantage in the EV batteries market, taking advantage of tax breaks and securing its market position. This is facilitated by the Inflation Reduction Act’s tax incentives for battery manufacturers in the United States, and the federal $7,500 tax credit for purchasing an electric vehicle, along with an additional $4,000 EV tax credit in Illinois.
However, concerns have been raised about the implications of these incentives, as no Chinese company operates independently; they function as state-owned enterprises, even with international partners. This raises concerns about the influence and control the Chinese government may have over such businesses. In addition, the Chinese are reportedly buying up U.S. farmland, including land surrounding critical road intersections, which could pose national security risks.
Critics suggest that Illinois legislators should revoke this agreement and prevent further awarding of generous tax incentives to companies not controlled by American owners or those with citizenship and allegiance to close allies, in an effort to protect American interests.