LG Chem Michigan Inc. (LGCMI) is targeting the launch of commercial production of automotive lithium-ion battery cells in July, 2013 at its Holland, Michigan facility once it has successfully completed the Production Part Approval Process (PPAP) and gained customer approval.
Test runs have already begun at the facility, and LGCMI anticipates shipping product by the end of this summer. The plant initially will manufacture batteries for the Chevrolet Volt, and the volume is expected to consistently increase depending on the EV market and securing additional contracts. The company is also working to procure additional programs for future production.
The $303-million, 650,000 square-foot facility was financed in part from a $151.4 million grant the company received from the US Department of Energy (DOE) as part of the Recovery Act Award for Electric Drive Vehicle Battery and Component Manufacturing Initiative. (Earlier post.)
Earlier this year, a review by the US Department of Energy (DOE) Office of the Inspector General (OIG) found that LGCMI misused funds awarded to it under the American Recovery and Reinvestment Act of 2009 (Recovery Act). (Earlier post.)
The OIG review found that LG Chem Michigan inappropriately claimed and was reimbursed for labor charges incurred by a variety employees for activities that did not benefit the project. As a result, up to about $842,000 in reimbursements for labor charges were questioned. The review also found that work performed under the grant to LG Chem Michigan had not been managed effectively. Despite the expenditures of $142 million in Recovery Act funds, LG Chem Michigan had not yet achieved the objectives outlined in its DOE-approved project plan. Among the objectives was the production of enough battery cells annually to equip 60,000 electric vehicles by the end of 2013, with assembly beginning in 2012.
With the announcement of the targeted commencement of production, LGCMI said that it had originally planned to install five assembly lines in the Holland facility but has set up three lines so far. The company said it is planning on finishing the remaining two lines by September 2015 and will proceed with the plan as they study the market demand and other surrounding circumstances.
LGCMI said the launch of commercial production at the facility will position the company strategically to obtain additional electric vehicle (EV) business in the United States and to compete for energy storage systems (ESS) business. Lithium-ion batteries are expected to play an important role in smart grid electric utility management as storage devices for electricity produced by both conventional and alternative methods.
The company said commercial production at LGCMI will provide the ability to supply other US automotive companies efficiently and increase its competitive position in securing future orders.
Currently, LG Chem, Ltd. supplies EV batteries to more than 10 automotive OEM companies. In addition, LG Chem supplies ESS mass storage batteries to about 10 global clients which include ABB (a global leader in power and automation technologies), SCE (the largest power utility company in California), and IBC Solar in Germany.