The State’s Ambitious Shift Towards Clean Energy Manufacturing
Michigan’s industrial legacy has long defined the state’s economic identity, from Henry Ford’s pioneering assembly line to the rise and fall of the Big Three automakers. Now, as the nation’s transition to clean energy gains momentum, the Great Lakes State is positioning itself at the forefront of the manufacturing revival.
Governor Gretchen Whitmer and her administration have launched a bold initiative to reinvigorate Michigan’s industrial base by retooling it for the low-carbon era. Backed by a Democratic-controlled state government, they have passed a series of climate laws, including one of the nation’s most ambitious clean electricity targets. Whitmer has directed hundreds of millions in state funds to a growing number of cleantech factories, where workers will produce batteries for electric vehicles, energy-efficient building technologies, and the tools of the clean hydrogen economy.
Michigan’s Unique Advantages
Michigan’s industrial heritage and highly trained workforce give it a distinct advantage in this new economic era. As Liesl Clark, the state’s former environmental regulator, puts it, “We’re steeped in our heritage. We think a lot about being the state that put the world on wheels. We take a lot of pride in that.”
The state’s manufacturing expertise, coupled with supportive policies and a strong union presence, position Michigan as a prime location for the clean energy manufacturing boom. As Jonathan Smith, a senior official at the state’s Department of Labor and Economic Opportunity, notes, “It was hard to find a lot of benefit for Michigan workers in … the globalization of some of these key industries, whereas Michigan workers absolutely can benefit from the reshoring and onshoring of existing critical technologies and new technologies of the future that there’s now a policy commitment to see built here in the United States.”
The Battery Manufacturing Boom
One of the key battlegrounds in Michigan’s clean energy transformation is the race to build a robust domestic battery supply chain. The state has attracted over $11 billion in private investment for cleantech factories, according to researcher Jack Conness, with much of that capital flowing into battery production facilities.
Our Next Energy: Pioneering Domestic LFP Battery Manufacturing
In the Detroit suburbs, a startup called Our Next Energy is leading the charge to revive domestic production of lithium ferrous phosphate (LFP) battery chemistry. This technology, which uses more abundant and cheaper materials than the nickel-based batteries that have dominated the EV market, fell out of favor in the U.S. over a decade ago when the pioneering A123 Systems went bankrupt.
Our Next Energy’s founder, Mujeeb Ijaz, saw an opportunity to bring LFP production back to American soil. The company’s 660,000-square-foot factory is currently operating a small-scale “proto line,” demonstrating that U.S. workers can manufacture these batteries. However, as Head of Strategy Deeana Ahmed acknowledges, the real challenge lies in achieving the scale necessary to compete with the flood of cheaper imports from China.
“Right now, what we’re seeing with the IRA is that it barely is enough to keep us competitive,” Ahmed says, referring to the federal Inflation Reduction Act’s incentives for domestic battery production. “Anything below that, you’re just losing money.” Our Next Energy is still working to secure the multi-billion-dollar investment needed to build out its full-scale factory and supply chain.
Ford, GM, and Gotion: Reviving the Motor City
Alongside startups like Our Next Energy, Michigan’s legacy automakers are also making major bets on electric vehicles and battery manufacturing. Ford is constructing a $2.5 billion BlueOval Battery Park in Calhoun County, while GM is building a $2.6 billion battery plant in Lansing. Gotion, a subsidiary of a Chinese battery company, has received approval to build a $2.4 billion facility in western Michigan, which would employ over 2,300 people.
These large-scale investments, totaling billions of dollars, represent the state’s ambition to reclaim its role as the epicenter of automotive innovation. However, as the article notes, many of these factories have yet to break ground, and the full economic benefits remain elusive for now.
Diversifying Beyond Automotive
Michigan’s clean energy manufacturing transformation extends far beyond the automotive sector. The state has attracted investments in a range of technologies, from energy-efficient windows to clean hydrogen production.
Nxlite: Revolutionizing Building Efficiency
In another boxy factory, the startup Nxlite is developing a novel approach to making windows significantly more energy-efficient. Using a physical vapor deposition process, Nxlite applies an ultra-thin coating that blocks select infrared wavelengths, reducing a building’s energy needs for heating and cooling by up to 40%.
LuxWall and Nel: Expanding the Clean Energy Ecosystem
Elsewhere in the state, Michigan has celebrated the opening of LuxWall, a factory producing high-performance vacuum-insulated glass panes, and secured a $400 million commitment from the Norwegian hydrogen electrolyzer manufacturer Nel. These investments further diversify Michigan’s clean energy manufacturing ecosystem, supporting the state’s broader decarbonization goals.
The Political Landscape and Voter Sentiment
Michigan’s clean energy manufacturing push is unfolding against the backdrop of a crucial 2024 election. As a swing state, the outcome could have significant implications for the future of federal climate and industrial policies.
The article notes that Michigan is one of the most closely divided battlegrounds, with Vice President Kamala Harris and former President Donald Trump in a tight race. Democrats hold full control of the state government, having won historic majorities in the 2022 election. This has allowed them to enact a series of climate laws and create programs to support the clean energy transition.
However, the article cautions that the full economic benefits of Michigan’s manufacturing boom may not materialize until after the 2024 election, potentially jeopardizing the entire project if the underlying policies are not maintained. Voter sentiment on clean energy and domestic manufacturing will be a crucial factor in determining the state’s political landscape and the continuation of these transformative initiatives.
Conclusion: Michigan’s High-Stakes Gamble
Michigan’s ambitious bet on clean energy manufacturing represents a high-stakes gamble to revive its industrial legacy and secure a prosperous future. The state’s unique advantages, from its manufacturing expertise to its strong union presence, position it at the forefront of the nation’s clean energy transition.
However, the article highlights the significant challenges ahead. Startup companies like Our Next Energy are struggling to achieve the scale necessary to compete with cheaper imports, while legacy automakers face their own hurdles in making the electric vehicle transition economically viable. The fate of these initiatives ultimately rests on the continuation of supportive state and federal policies, which will be put to the test in the 2024 election.
As Michigan navigates this critical juncture, the state’s journey serves as a bellwether for the broader national effort to harness clean energy as the engine of a revitalized American manufacturing sector. The outcome in Michigan could have far-reaching implications for the country’s economic and environmental future.
