A123 Systems' celebratory opening on Sept. 13 of a lithium-ion battery manufacturing plant in Michigan stamps the U.S. as an up-and-coming global player in the production of energy cells for hybrid and full-electric vehicles.
President Barack Obama underscored that point in a telephone call to Michigan Gov. Jennifer Granholm that was broadcast over a loudspeaker to A123 employees, government officials, and automotive industry representatives during the official grand opening of the company's 291,000-ft² (27,000-m²) plant in Livonia.
"Thanks to the Recovery Act, you guys are the first American factory to start high-volume production of advanced vehicle batteries," Obama said, referring to A123's award of a $249 million grant in 2009 via the American Recovery and Reinvestment Act.
A123's patented nanophosphate Li-ion chemistry, born in the research labs of the Massachusetts Institute of Technology, received an initial $100,000 grant from the U.S. Department of Energy in 2001.
U.S. Secretary of Energy Steven Chu said during his remarks at the plant that "this particular project is important because it has managed to link innovation in America to manufacturing in America—an essential connection that has been neglected in recent years."
The vast majority of Li-ion batteries sold today are manufactured in Asia, but the U.S. federal stimulus program has provided funding to several firms that will produce advanced batteries in the U.S. Obama wants to see the U.S. supply 40% of the world's Li-ion batteries for hybrid and electric vehicles.
Micky Bly, Executive Director of Electrical Systems, Hybrids, Electric Vehicles and Batteries at General Motors, told the A123 Livonia audience that work on the extended-range electric Chevrolet Volt has highlighted the importance of advanced batteries. "As we went faster and faster and faster down the [Volt's] development path, we realized that batteries were the next frontier for us and we worked with many suppliers along the way."
Said Jason Forcier, Vice President of A123's Automotive Solutions Group: "We have several development projects with General Motors centered around electrified vehicles. We are currently not involved in the Volt vehicle, but we're very hopeful that we'll have a production contract with GM in the near future."
Current A123 production contracts include supplying Li-ion battery systems to the eStar commercial electric truck for the Navistar-Modec EV Alliance, a joint venture between Navistar and Modec Ltd. of the U.K. It also supplies Li-ion cylindrical packs to BAE Systems, the hybrid system integrator for Daimler's Orion VII diesel-electric commuter buses.
"We have more than 40 programs in development, with the vast majority being engineered in the new Livonia facility," said Forcier.
Online since August, the Livonia plant is producing about 50,000 battery cells a month. Production is expected to reach 1 million a month by mid-2011, noted Forcier.
A typical plug-in hybrid vehicle pack has between 200 and 300 cells, while an electric vehicle pack has between 300 and 400 cells. "That means at peak capacity we can produce 30,000 to 40,000 electric full system packs or 200,000 packs for hybrid-electric vehicles annually from this facility," Forcier said.
Until the first quarter of 2011 when A123 will open a facility in Romulus, MI, the Livonia plant will continue to receive chemically coated cathodes and anodes from an A123 plant in China.
"Our end goal is to have all development and production operations for the U.S. and for Europe done at Michigan plants," Forcier said, adding, "The Chinese are requiring that batteries be manufactured in China in order for tax credit eligibility, so we will continue to make batteries in China for the Chinese market and for export to other Asian countries."
A123's business in China has hit the fast track since the establishment of a joint venture with Shanghai Automotive Industry Corp. (SAIC). "We were the first non-Chinese battery maker to form a JV in China," said Forcier.
By 2020, electrified vehicles in China are predicted to hit an annual sales volume of 3 million units, Dr. Zhu Jun, General Manager of SAIC Motor's Shanghai E-Propulsion Auto Technology Co. Ltd. said during the A123 Livonia ceremonies.
Forcier said A123 will provide batteries to three different SAIC-produced vehicles, including a hybrid-electric and a PHEV that will be available in the Chinese market in 2012.