Last month, XALT Energy—an energy solutions company located in Michigan—signed a $1 billion dollar contract with a Chinese company, Hybrid Kinetic Group (HK Group), that will see its high-performance electric batteries installed in all-electric buses in China. Thousands of XALT Energy’s lithium-ion batteries, rechargeable in only 10 minutes, will be leased to Chinese municipalities through HK Group. The deal comes at a time when China is rethinking its municipal transportation systems in efforts to cut down on pollution and fossil fuel use.
For XALT Energy, which currently has 130 employees, the deal will allow an addition of 300 high-tech and manufacturing jobs. The batteries will be produced at their manufacturing facility in Midland, Michigan, which it has invested $600 million into since 2009. Midland is in Michigan’s 4th Congressional District, which sent 21% of its exports to Asia in 2012, including $361 million to China, its top destination in the Asia Pacific.
In terms of trade and investment, Michigan has seen its relationship with China grow, in part due to Michigan Governor Rick Snyder, who has conducted four trade missions to China in the last four years. According to a Michigan/China trade profile produced by the Michigan Economic Development Corporation, Michigan exported $4.2 billion in manufactured goods to China in 2013, a 54% increase since 2011. China is Michigan’s 3rd largest trading partner, behind only Canada and Mexico.
Michigan companies have been active investors in China, especially in the automotive sector. In 2014, Ford invested $100 million to expand its research-and-development operations in Nanjing, China. In 2013, General Motors invested over $400 million to increase its manufacturing capabilities in Shanghai, and in 2014 sold over 3.5 million vehicles, making China its largest sales market. Besides HK Group, a host of Chinese companies have also invested in Michigan, including Shanghai Automotive Industry Corporation, who operates its North American operations out of Birmingham, Michigan, and Nexteer Automotive, a subsidiary of China’s Aviation Industry Corporation and headquartered in Saginaw, Michigan.
Chad Westra is a Research Intern at the East-West Center in Washington and an undergraduate student at Calvin College.