Lion Electric bankruptcy raises concerns over state’s EV incentives

The bankruptcy of Lion Electric, which opened its Joliet plant just two years ago, is raising concerns among grassroots groups about the stability of Illinois’ taxpayer-funded EV incentives.

Once a cornerstone of Gov. J.B. Pritzker’s green agenda, Lion Electric’s Joliet plant will auction its equipment on May 15 after declaring bankruptcy, despite a $50 million state incentive.

“Companies like Lion have recognized the many resources Illinois provides, including our uniquely talented workforce, and together we have set the state on a path to thousands more jobs and increased EV capacity,” Pritzker said in a 2023 news release about the plant’s opening.

Darrell Bruck, co-founder of the Kankakee-based group Outrage, calls it a “cautionary tale” for taxpayers.

“We’re very interested in what happened in Joliet because we believe it’s connected to Gotion in Manteno, here in Kankakee County, where we actively oppose the project. We see a parallel with Governor Pritzker’s tax incentives for the electric bus manufacturer, which, just two years later, has failed because the product was not viable,” said Bruck. “The product was not viable, clearly, or they wouldn’t be filing bankruptcy, and we feel the same thing about Gotion.”

The group opposes the Gotion battery plant in Manteno, which got $125 million upfront from a $536 million state package. Bruck sees it as a parallel to the Lion Electric case.

“We believe the $125 million given to Gotion upfront will be lost. Governor Pritzker’s total giveaway to Gotion amounts to $536 million,” said Bruck. “Anything related to the electric battery vehicle industry concerns us because if the industry isn’t viable, then neither is Gotion or the incentives given to them.”

According to Bruck, much of the upfront state money has already been spent, largely on farmland acquisition, some of which he claims benefited politically connected families in Manteno.

“Gotion has bought farmland from Manteno Mayor Tim Nugent’s family in the Manteno area way over market value with some of the $125 million Pritzker gave them upfront,” said Bruck. “He really enriched his family.”

Kankakee County documents show Gotion acquired acres of farmland from the Nugent family for over $21 million.

Bruck said electric vehicle battery maker Gotion hasn’t started production and their sister plant in Michigan is basically dead.

“In January, Gotion’s first hire in Manteno, an engineer, was set to oversee equipment installation and employee training for the plant. However, he quit and took a job with a smaller company, which raises concerns that he may have seen the writing on the wall,” said Bruck. “[Former President Joe Biden] promised Gotion $7.5 billion in incentives if they got up and running and hired the promised workforce, but I’m sure [President Donald Trump] would stop them. With everything going on, I believe they face a very uphill battle. The bankruptcy of the [Lion Electric] Joliet plant proves they are fighting for an industry that just isn’t viable.”

Complicating Gotion’s path forward, a series of lawsuits from the group Concerned Citizens of Manteno are set to move forward in court next week. Bruck said the suits claim the village improperly rezoned land without proper oversight. Bruck noted more complications for Gotion’s path forward.

“At the Village of Manteno meeting, it was revealed that union electricians walked off the job because they were asked to work in unsafe conditions, which they attributed to demands from the Chinese contractors,” said Bruck. “The electricians refused to continue and chose to walk off the job.”

Bruck doubts the project’s future, citing shifting priorities and strong local pushback, including election wins by the anti-Gotion Manteno Freedom Party.