Government grants are encouraging battery makers to shift production of batteries for electric and plug-in hybrid vehicles from Asia to the United States. For example, the grants will assist an investment of up to $400 million for one battery manufacturer to shift battery cell production to Michigan from factories in Korea.
Compact Power Inc. already has a battery pack plant in suburban Detroit that will design and assemble up to 10,000 lithium ion battery packs a year by the end of 2010. It will supply the first battery packs for the Chevrolet Volt plug-in hybrid. General Motors Co. eventually will build its own battery plant to supply the Volt.
GM also has tapped Compact Power, a subsidiary of South Korea's LG Chem, to make lithium ion batteries for a Buick plug-in hybrid scheduled for early 2011. So Compact Power plans to build a lithium ion cell manufacturing plant, CEO Prabhakar Patil said at the Management Briefing Seminars.
Battery pack plants assemble individual batteries into packs. The plants cost as much as $50 million and take up to nine months to build. But cell factories that make individual batteries are more complex and require clean room manufacturing capabilities, which add to the cost, Patil said.
The federal government is giving Compact Power $151.4 million to help finance its Michigan cell plant. It is considering sites in Holland, Pontiac and suburban Detroit.
The Department of Energy also is funding other battery plants, including ones by Johnson Controls Inc., A123 Systems Inc., EnerDel Inc. and GM.
But federal funds are not enough to make a business case for moving cell production, Patil said. The company needed long-term customers. "We're in a fairly good position," Patil said, because the Volt plus the plug-in Buick suggests this will be "a sustainable business."