LIVONIA, Mich. -- A123 Systems Inc. today opened a lithium ion battery plant to supply advanced technology for the coming wave of electric vehicles.
President Barack Obama heralded the plant as “central to the next generation of cars.”
Obama -- highlighting his administration's efforts to encourage battery technology development through last year's economic stimulus -- called A123 Systems CEO David Vieau during dedication ceremonies at the suburban Detroit plant.
“This is about the birth of an entire new industry in America -- an industry that's going to be central to the next generation of cars,” Obama said in the phone call, according to a transcript provided by the White House.
It is the largest lithium ion battery plant in the United States -- at 291,000 square feet -- and should strengthen the nation's presence in battery manufacturing, now dominated by Asian companies, the White House says.
A123 Systems has signed battery supply agreements this year with domestic and foreign automakers such as Fisker Automotive Inc., Navistar Inc. and Modec Ltd.'s joint venture Navistar-Modec EV Alliance.
Analyst A.T. Kearney predicts the global market for electric and hybrid cars will rise to $21.8 billion by 2015 from about $31.9 million in 2009 because of increased government incentives.
The state of Michigan has awarded A123 $238 million in incentives and plans to continue to invest in alternative energy technologies.
With the forthcoming launch of the Chevrolet Volt plug-in hybrid and Nissan Motor Co.'s all-electric Leaf, America is seeing the beginning of a new era in car manufacturing.
Michigan Gov. Jennifer Granholm said Asia currently dominates 98 percent of the advanced battery technology market. The United States aims to hold 40 percent of the market by 2015.
“This is the thing that will pull the U.S. auto industry out of the last few years,” said Micky Bly, a General Motors Co. spokesman.
A123 already has hired 300 employees in Michigan and plans to create up to 3,000 additional jobs by 2012 as production increases. Granholm noted that about half of the 250 employees in the plant were unemployed before to joining the company.
Although the company lost the contract to supply batteries for the Volt to Korea's LG Chem, A123 Systems is still working closely with GM and may be the supplier for the next version of the Volt. A123 raised $391 million during an initial public offering last year. A portion of the money raised in the IPO will be used to match government funding of nearly $250 million granted by the U.S. Department of Energy.
“State and federal money has made manufacturing a possibility on the front end, but this is not something the company will rely on long term,” Jason, Forcier, A123 Systems' vice president of automotive solutions, said in a recent interview with Automotive News.