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A123 Systems Expanding to 360 MWh of Assembly Capacity by 2H2010; packs for 320K Hybrids or 24K PHEVs Per Year

A123 Systems has begun to make investments in its 300,000 square foot plant in Livonia, Mich. to expand the final cell assembly capacity by up to 200MW hours once fully operational, inclusive of the previously announced 80MW hour expansion.

In December of 2009, A123 closed on its $249 million grant award from the Department of Energy (DOE) and is using the available capital to help fund its capacity expansion plans. A123 ended the third quarter of 2009 with final assembly capacity of 169MW hours per year.

These investments will expand the company’s global final cell assembly capacity to over 360 MW hours, with the incremental 200MW hours of capacity expected to be ready for production during the second half of 2010.

The expansion in capacity will provide A123 with the overall ability to produce more than 320,000 hybrid vehicles with 1.1 kWh battery systems, or more than 24,000 PHEVs with 15 kWh battery systems per year. A123 will continue to evaluate additional investments in production capacity in response to anticipated customer demand.

During the fourth quarter of 2009, A123 announced that it signed a lease for a 300,000 square foot facility in Romulus, Mich. A123 announced that the initial investments in this facility are to establish the company’s North American coating operations, and current plans are for the facility to be ready for production during the first half of 2011.

The new facilities in Livonia and Romulus will comprise stages of production from coating and cell assembly to final assembly of complete automotive battery systems.

A123 Systems most recently entered a multi-year supply agreement with Fisker (earlier post), and formed a JV with SAIC in China (earlier post).



There is no way they would build this capacity without an existing agreement from a major automotive customer to buy thousands of packs.

The big question is who is the automotive customer that's planned to use all these A123 cells in their hybrids? It won't be a Japanese or Korean company, so could it be the likes of VW or FIAT?


It's good to see this EV battery capacity in the US.


Yes Kelly. Many more will be required not to have to import $$B batteries every year.

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Nevertheless, it still seems that China is leading the race to expand lithium battery production globally. According to the source below Chinese lithium battery manufactures with go from a total capacity of 0.9 million kWh ultimo 2009 to 4 million kWh ultimo 2010.(1) For comparison I believe total world capacity was about 13.5 million kWh ultimo 2009 so China is moving really fast.(2). A123 is adding 0.2 million kWh in 2010 in the US. That is a lot for one producer but they still need to be much bigger in order to compete in a few years. The industry as such is still a tiny industry with only about 7 billion USD in global revenue (assuming 500 USD per kWh). Oil and gas 2000 billion USD per year. In order to save the planet (so to speak) the industry needs to grow a hundred fold at least. 13.5 million kWh can do 0.5 million Leafs so we need a hundred times more to make 50 million EVs per year.

The good thing is that this immature industry is at the start of its learning curve and we should therefore expect to see much better batteries in the future along with better prices when the industry is just 10 times bigger than it is today.



2) The world produces about 1250 million cell phones with an average 3Wh lithium battery or 3.75 million kWh. The world produces about 150 million notebooks that each uses 45 Wh of lithium battery or 6.75 million kWh. All other applications for lithium batteries are probably close to 3 million kWh. This is a total of 13.5 million kWh.


I should do a drive-by of these facilities next time I go out that way.


"320,000 hybrid vehicles with 1.1 kWh battery systems, or more than 24,000 PHEVs with 15 kWh battery systems..."

This points out a cost benefit ratio. If we can make 320,000 HEVs that get 40 mpg or 24,000 vehicles that can get 80 mpg, depending on how your calculate PHEV gasoline economy, where is society getting the most good with the fewest resources?


It depends what people are buying.  Hybrids are pushing 3% of the US car market, so ~300k packs would handle the entire demand.  The best-selling hybrid is an import (Prius), so the A123 plant should have plenty of capacity for PHEVs after satisfying the domestic HEV demand.


We can do both, I was pointing out the most good for the most people with scarce resources. Let's say that the 320,000 HEVs is combined with a demand for 240,000 PHEVs. We will have to increase production a lot to meet the demand.


The plant has 350 MWh/yr of capacity.  If every LDV sold in the USA had a Volt-sized battery pack, that would be perhaps 12 million vehicles/yr * 16 kWh/vehicle = 192,000 MWh/year; even hybrids at 1.1 kWh a pop would require 13,200 MWh/yr.  The new assembly plants are very small compared to what the industry could (and hopefully will) be using.


That says that we would need 10 companies with the capacity of A123, if PHEVs sell well and do not draw from the HEV sales. The capacity could probably expand over time, but I like planning. Booms cause busts and supply/demand planning makes for nice smooth transitions without distorting the economy.

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