U.S. battery market powers up
Michigan makes big move to become the new center of battery technology
By Dave Hannon -- Purchasing, 4/17/2009 10:30:00 AM
Suddenly, it’s very en vogue to be in the battery market.
With a greater emphasis on alternative energy and hybrid vehicles, the U.S. automotive industry—along with the state of Michigan--made a major investment in the battery industry this week with the hopes that it may be a technology area that can provide much-needed growth to the U.S. automotive industry.
On Tuesday the Michigan Economic Growth Authority approved more than $300 million in tax credits for four major battery manufacturing projects aimed at making Michigan the global capital for automotive battery manufacture. According to the Detroit News, the projects will bring $1.7 billion in investments to build advanced battery manufacturing facilities in Livonia and Holland, Mich. as well as two other locations yet to be announced.
“Michigan has planted its flag,” said Michigan Governor Jennifer Granholm in announcing the projects. “Michigan will be the place where the electric vehicle, and the batteries that power that vehicle, will be researched, developed, manufactured and assembled.”
In Holland, a partnership between Johnson Controls-Saft Advanced Power Solutions and Ford Motor Co. will 
mass-produce lithium ion batteries for plug-in cars at an existing Johnson Controls plant. According to a Johnson Controls, the cost to renovate the Holland facility (see photo) for lithium-ion automotive battery production is approximately $220 million. It will have an initial capacity of 15 million lithium-ion cells.
In Livona, A123Systems, a Watertown, Mass.-based firm, will make batteries for Chrysler. A123Systems also received a $69 million shot of capital investment this week courtesy of General Electric.
“We’ve accelerated our plans to expand our U.S. manufacturing,” said David Vieau, A123Systems’ President and CEO. “We do not believe our country can afford to wait to develop advanced batteries. With this financing, we will begin an expansion that we expect to accelerate upon receipt of government funds.”
Also as part of the Michigan development project, Dow Chemical Co. expanded its presence in the automotive market by establishing a joint venture with privately held battery systems manufacturer Kokam America Inc. to play a role in the development of the new generation of electric vehicles.
The joint venture, which also counts Kokam's majority investor Townsend Ventures as a partner, is called KD Advanced Battery Group and plans to invest around $665 million to build a new 800,000 sq ft facility in Michigan to manufacture prismatic cells for Kokam's flat-panel Superior Lithium Polymer Battery product.
And lastly, Compact Power, a subsidiary of LG Chem of Korea, will use more than $100 million in Michigan tax credited to begin making batteries for General Motors. The LGChem subsidiary won a contract earlier this year to be the lithium ion polymer battery cell supplier for the Chevy Volt, the first mass-produced electric vehicle.
Even outside the U.S., battery makers are eyeing the automotive market as a major growth area. Japanese battery maker Hitachi said it is expecting big revenue increases at its automobile lithium-ion battery business for the next seven years. “Hitachi expects demand for batteries used in hybrid and electric cars to increase and appetites for batteries used in digital cameras and computer games as well as other electronics goods to stay solid,” according to the Wall Street Journal.
And it’s not just the automotive industry and venture capital firms making major big investments in battery technology. According to USA Today, In-Q-Tel, a CIA-funded investment firm, is putting money into 18 companies that are developing batteries, solar cells and other energy-related technologies with intelligence uses.
See also: Portable electronics, hybrid cars to drive global battery demand
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