Electric vehicle battery manufacturer Akasol Inc. plans to close a pair of Michigan facilities and eliminate nearly 200 jobs as it shifts its battery production to a growing southern state.

The announcement came less than a week after Michigan business leaders expressed worries about Gov. Gretchen Whitmer’s plan to raise the state’s corporate income tax to generate revenue that would be used to fulfill her six-year-old campaign promise to “fix the damn roads.”

As reported by The Midwesterner last week, the governor’s office will not divulge how much Whitmer wants to increase the state’s 6% corporate income tax to generate the $1.6 billion she’s hoping to realize, but the Detroit Regional Chamber suggests the rate would need to hit 8% to generate that revenue, putting the state among the highest in the nation.

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South Carolina, the state where Akasol is relocating boasts a 5% corporate income tax.

Automotive supplier BorgWarner acquired Darmstadt, Germany-based Akasol in February 2022, a marriage that seemed ideal as BorgWarner sought “to continue to expand its electrification portfolio and capitalize on the profound industry shift towards electrification,” the company said.

According to a Worker Adjustment and Retraining Notification letter from Plant Manager Scott Crouthamel, “there will be a total closure of the Hazel Park facility located at 1400 East 10 Mile Road, Suite 150, and the Warren facility located at 23950 Mound Road, Suite 300, in July 2025.”

As part of the closures, 188 people will lose their jobs.

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The Hazel Park facility is less than five years old and “was built on the bones of the Hazel Park Raceway, first opened in 1949,” the Detroit Free Press reported.

“This closure is expected to be permanent and will affect all employees,” Crouthamel wrote in the WARN notice, filed last week with the Michigan Department of Labor and Economic Opportunity.

“All affected employees have been notified of their separation dates and that their separation from employment will be permanent,” Crouthamel added. “Those employees are expected to be separated from employment beginning on April 14, 2025, with all separations accomplished by July, 2025.”

According to an MLive report, a BorgWarner spokesperson said the company is moving its battery production from Michigan to an existing facility in Seneca, South Carolina.

“We believe in our battery product portfolio and the opportunity for continued growth as customers increasingly require innovative eMobility solutions,” the spokesperson told MLive via an email statement. “We cannot go into specifics on personnel matters but we aim to affect the fewest number of people possible.”

A spokesperson declined to tell the Detroit Free Press whether the Michigan workers losing their jobs would be offered roles at the Palmetto State location.

EVs have been a tough sell for consumers, prompting manufacturers to rethink their go-to-market strategy for non-internal combustion engine vehicles. The shift has impacted companies that serve the vehicle industry.

“It’s a tough business,” Sam Abuelsamid, vice president of market research at Telemetry Insights, told the Detroit Free Press. “Everything around the EV business is challenging.

“Until you get to a certain level of scale, the R&D costs are extensive,” Abuelsamid added. “BorgWarner is a big company, but if they don’t see a near-term return on investment with all the other challenges around the industry right now, if they need to cut costs somewhere, the stuff that’s likely to take a longer return on investment is likely to be sacrificed in the near term.”

Closures like Akasol’s won’t help the Wolverine State’s employment situation. Last month, a review from the personal finance site WalletHub revealed the state’s unemployment situation ranked Michigan among the states with the worst changes in their unemployment rates.

“Michigan’s industry mix, particularly its reliance on auto manufacturing and the transition to electric vehicles, could influence the state’s unemployment trends,” a WalletHub analyst told The Midwesterner after the report’s release. However, the factor was not explicitly considered in the site’s report.

According to the U.S. Department of Labor, federal law requires “employers with 100 or more employees (generally not counting those who have worked less than six months in the last 12 months and those who work an average of less than 20 hours a week) to provide at least 60 calendar days advance written notice of a plant closing and mass layoff affecting 50 or more employees at a single site of employment.”

As The Midwesterner reported last week, another Michigan automotive supplier is closing completely.

After 79 years as a “significant player” in the automotive industry and others, Michigan Spring & Stamping is shutting down its Muskegon operations and laying off 116 employees.

The company is among a growing number of businesses planning to shut down or lay off employees this year in a state where 45,000 lost their jobs in 2024.The Muskegon layoffs are among 1,830 scheduled for 14 large companies in the next two months, impacting workers in nine counties.

Michigan’s unemployment increased by two tenths to 5% in December, marking the ninth straight month of increasing unemployment in the Great Lakes State.