Michigan gives $5M to EV startup

The Michigan Strategic Fund Board on May 19 approved giving $5 million to electric vehicle maker Slate Auto for its business headquartered in Troy.

The company will receive a performance-based grant through the Michigan Business Development Program to expand its presence in the city.

Slate has been based in the city of Troy since it started in 2022. With a new facility in Sterling Heights, Slate currently employs 325 Michiganders around the state, according to a press release from the Michigan Economic Development Corporation. The MEDC claims the expansion will create at least 392 qualified new jobs over the next five years.

“Michigan is on the move and open for business, competing for and winning big projects in industries like agribusiness and advanced manufacturing,” Gov. Whitmer said in a press release.

But Michigan has a bad track record of betting taxpayer money on private ventures, James Hohman, the director of fiscal policy at the Mackinac Center for Public Policy, told Michigan Capitol Confidential in an email.

“The state has a dismal record of turning job announcements into actual jobs,” said Hohman, who found in a recent study that only 9% of the jobs announced in major state-sponsored deals from 2000 to 2020 were created. “Lawmakers ought to improve the state’s business climate for everyone rather than writing checks to a few select businesses.”

The Slate investment comes as the electric vehicle bubble appears to have popped.

Michigan Attorney General Dana Nessel is trying to claw back $24 million in taxpayer funds from a failed EV company.

Michigan set a goal to have 2 million EVs driving on Michigan roads by 2030. The state so far has about 180,000 registered EVs.

In 2023, Whitmer ordered the state government to transition its roughly 14,000 vehicles to electric ones. The fleet is about .3% of the way there, with 41 vehicles.

“Today’s approved projects not only indicate a vote of confidence in the Michigan location advantage but also reflect the strengths of Michigan’s industries and our leadership in key areas, from manufacturing and agribusiness to EVs,” Quentin L. Messer Jr., CEO of the Michigan Economic Development Corp. and chairman of the Michigan Strategic Fund Board.

Slate says it has already received more than 150,000 reservations for its principal product, an electric pickup truck. Slate claims that it will deliver vehicles in late 2026, with more to come in 2027.

Tax benefits do not guarantee that a company will expand or keep its business in the state.

In 2023, Michigan promised EV company Scout Motors $10 million, but the company is shifting some work to North Carolina, Crain’s Detroit Business reported this week. The company’s incentive agreement expires April 30 next year, Crain’s reported.