A123Systems Seeking $1.84B in ATVMIP Loans to Support Construction of Li-ion Plants in US; Targeting 5M HEV Packs by 2013
A123Systems has submitted an application under the US Department of Energy’s $25-billion Advanced Technology Vehicles Manufacturing Incentive Program (ATVMIP) to qualify for $1.84 billion in direct loans to support the construction of new lithium-ion battery manufacturing facilities in the United States, with the first construction location in southeast Michigan.
If A123’s application is approved, this program would enable the company to significantly expand production capacity in the United States, with full production volumes designed to supply battery systems for 5 million hybrid electric vehicles or 500,000 plug-in electric vehicles per year by 2013.
At full operation, A123 expects the combined plants would occupy as much as 7 million square feet and create more than 14,000 jobs. These plants would produce battery cells and systems to meet the needs of A123’s automotive customer portfolio, which currently includes more than seven vehicle manufacturers and 19 vehicle models ranging from HEVs (hybrid electric vehicles) to EVs (electric vehicles).
A123Systems, with proprietary electrode technology developed at MIT, was funded initially with a $100,000 grant from the US Department of Energy in 2001. Existing A123 customers include AES, BAE Systems, Black and Decker, Cessna, Chrysler LLC, General Motors, Project Better Place, and Th!nk.
Lithium-ion battery maker EnerDel has also applied for $480 million in low-interest loans under ATVMIP (Earlier post.) If granted, those funds would enable EnerDel to double manufacturing capacity to produce 600,000 hybrid electric vehicle packs per year at its existing plant in Indiana by 2011, and to build a second larger plant capable of producing battery packs for up to 1.2 million hybrid electric vehicles by 2015.
The first tranche of applications for ATVMIP funds closed on 31 December 2008. DOE has said that it received 34 applications in this first batch. The evaluation and approval process includes four steps:
DOE will review an application to see if it is substantially complete. If it is not DOE will notify the applicant what additional information it requires.
DOE then evaluates the applicant and project to determine eligibility. If they are not eligible, the application review process will end.
In the third step, the proposed project will be evaluated, potential terms and conditions of a loan will be developed and a decision will be made whether to make a loan.
The fourth and final step is the negotiation and, if the negotiation is successful, the closing of the loan.