Michigan’s battery bet backfires

More than a decade after Michigan lost $141 million on failed battery company A123 Systems, the state gave another $70 million to a different energy startup run by the same man — and that company now appears to be faltering.

Our Next Energy, founded in 2020 by Mujeeb Ijaz, a former A123 Systems employee, promised to bring a $1.6 billion investment and 2,112 new jobs to Van Buren Township. But just two years after receiving state support, the company has laid off most of its staff and is leaving its facility without creating 2,000 jobs.

Ijaz, a team leader in the development of the Ford EDGE and holder of 31 patents, according to his Detroit Chamber of Commerce résumé, has been here before.

A123 Systems admitted in a 2011 annual report that it was never profitable. Michigan awarded the company more than $141 million in state credits and subsidies, while the federal government added $249 million in stimulus funds before the company filed for bankruptcy. Michigan Capitol Confidential looked back on A123’s financial troubles in 2021.

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Our Next Energy has fired most of its employees and is giving up the lease on its Van Buren Township facility, Automotive News reported in September. ONE did not respond to an email seeking comment. The company has locations in Novi and Belleville.

Gov. Gretchen Whitmer had applauded a state grant to the company in 2022.

“Our Next Energy’s $1.6 billion investment creating 2,112 jobs in Van Buren Township will build on our economic momentum and secure the future of mobility and electrification right here in Michigan,” Whitmer said in a press release. “This innovative, Michigan-made company is on the cutting-edge of battery technology, and the work they’re doing will increase the range of electric vehicles to over 600 miles on a single charge. With this new gigafactory, we will continue bringing the supply chain of electric vehicles, chips, and batteries home to Michigan and the USA while creating a sustainable, clean energy economy. I am proud that Democrats and Republicans in Michigan came together to build up our economic development toolkit and empowered our state to compete for every project and every job. We will work with anyone and compete with everyone to keep putting Michiganders first, creating good-paying jobs with great benefits, and building the future of the auto industry right here in Michigan.”

A Mackinac Center for Public Policy report has found that over 20 years, jobs subsidies failed 91% of the time.

“One company failing to live up to promises is not an aberration, it should be an expectation for lawmakers,” James Hohman, the Mackinac Center’s fiscal policy director, told CapCon in an email. “Major deals fail to create 91% of the jobs lawmakers say will be created. The company has collected $70 million from taxpayers already. State officials should stop making deals where companies get cash prior to hitting their job targets.”

The Michigan Economic Development Corporation continues to review its incentive agreement with Our Next Energy, Danielle Emerson, MEDC public relations manager, told CapCon in an email.

“While the jobs requirement milestone for this project is not due until December 2029, we are being proactive in working with ONE to ensure the agreement reflects any updated scope of the project,” Emerson wrote. “In the meantime, no new disbursements will be made under the current agreement. We are optimistic about the company’s path forward given the potential benefit from the federal One Big Beautiful Bill tying tax credits to domestic content. To date, $70.2 million has been disbursed to the company to reimburse for $117.6 million in eligible costs invested by the company. The MEDC is committed to protecting those disbursed public dollars and ensuring this opportunity stays in Michigan.”