Granholm Signs Advanced Battery Tax Credit

06 April, 2009 02:04:00

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Gov. Jennifer Granholm signed a bill into law that increases tax incentives for companies that develop and manufacture advanced batteries.

Today’s action puts Michigan in prime position to capture up to $2 billion in federal advanced-battery development grants.

The new law adds an additional $220 million in refundable tax credits for companies involved in the development and application of advanced-battery research, engineering, and manufacturing. The legislation expands the $335 million in tax credits that Governor Granholm signed in January, which were the first in the nation, bringing total incentives available to $555 million.

The legislation signed today:

• adds an additional $220 million in tax credits to the $335 million approved in January;
• increases from $70 million to $90 million the maximum amount of tax credits for companies engaged in vehicle engineering to support battery integration, prototyping and launch expenses;
• allows the Michigan Economic Growth Authority (MEGA) to approve up to $300 million of the total $555 million in incentives for the construction of battery-cell manufacturing facilities.

The governor said the Michigan Economic Development Corp. has received a number of applications for the credits, including one from Massachusetts-based A123 Systems, which announced earlier today that it will supply the lithium ion batteries for Chrysler LLC electric cars. The state tax credits will be awarded next week.

In February, the Michigan Economic Growth Authority approved the first incentives from the original legislation for Ford and General Motors for pack engineering, integration and assembly, vehicle engineering, and advanced-battery technologies. Those incentives, which included tax credits to help produce the battery for GM’s Chevy Volt.

This bill allows for Michigan to be at the front of the pack in developing the guts of the electric vehicle, which is the next generation battery," Granholm said. "That battery is the key to the automotive future in this country."

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