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Valence Applies for $608M in ATVMIP Loans to Build US-based Lithium-Ion Battery Production Facility

Valence Technology, Inc., a US-based manufacturer and supplier of lithium iron magnesium phosphate energy storage solutions (earlier post), has submitted an application under the US Department of Energy’s Advanced Technology Vehicles Manufacturing Incentive Program (ATVMIP) for up to $608 million in low interest loans. These loans will help finance the construction of a new $760-million lithium iron magnesium phosphate battery manufacturing facility to be located in Central Texas.

Valence currently has two manufacturing facilities in China, both wholly-owned; each facility is 50,000 square feet and located next to the other. The first plant is the cathode materials plant; Valence then uses two or three proven partners to manufacture the cells. The second is the module/pack manufacturing plant.

If the loans are approved approved, Valence anticipates its US production capacity would be online as early as 2011. This financing would support the construction of a two-million-square-foot, vertically integrated manufacturing facility to manufacture and assemble finished energy storage solutions.

The facility would make the cathode material, build individual cells, and assemble packs and peripherals. This new state-of-the art facility would meet the needs of Valence’s growing customer portfolio, including automotive OEMs and Tier 1 suppliers from HEV (hybrid electric vehicles) to EV (electric vehicles) solutions.

Operating at full capacity, the domestic manufacturing facility would supply energy storage solutions for more than 250,000 hybrid and all-electric vehicles annually. The facility would also supply energy storage solutions to the stationary power market, the industrial market and the US military.

We have been manufacturing in high volumes for the past four years at our Suzhou, China facilities and have been looking for an opportunity to expand into the United States. While we are currently supplying US customers out of China, we would expect to be supplying the US markets from a domestic facility by 2011, when the first phase of construction is completed.

—Robert L. Kanode, President and CEO of Valence

Since 2005 Valence has shipped 70 MWh of Li-ion battery capacity, or the equivalent of 3,500 electric cars.

Comments

Tim G.

There's going to be a lot of money flowing to these battery companies. Hope that the assessment team is good.

Stumbled across this BBC article: http://news.bbc.co.uk/2/hi/uk_news/northern_ireland/7909408.stm about how 10-million British pounds went down the drain when Valence said they'd build a plant in Ireland and then promptly moved it to China. There was an investigation on why the Audit Office didn't do their job properly. Hope my taxpayer dollars don't get wasted.

SJC

"$608 million in low interest loans."

Again, where is the massive private money availability. If the free market was so pervasive, money people would be all over them trying to make a deal.

Low interest loans this size to put manufacturing in Texas will be a hard sell. It is going to be interesting to see the outcome. Why Texas? Is this more pork for that state? You can hear the comments already.

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