A123 Systems Opens Li-ion Automotive Battery Manufacturing Plant in Michigan
13 September 2010
A123 Systems announced the grand opening of the largest lithium ion automotive battery production facility in North America, which it calls the largest, based on available data. The new plant in Livonia, Mich. is expected to expand A123’s manufacturing capabilities by up to 600 MWh per year when fully operational, contributing to the company’s plan to expand global final cell assembly capacity to more than 760 MWh hours annually by the end of 2011.
The opening of the Livonia factory comes just over one year after A123 was awarded a $249 million grant from the US Department of Energy (DOE) as part of the American Recovery and Reinvestment Act to help the company execute its strategy to ramp up US manufacturing capabilities to meet increasing, market-driven demand for its innovative technologies.
A123 will focus on manufacturing prismatic cells and systems at the new 291,000-square-foot Livonia facility. The factory is designed to enable the complete production process, including research and development, manufacturing of high-value components, cell fabrication, module fabrication and the final assembly of complete battery packs ready for vehicle integration.
As part of its continuing US manufacturing ramp up, A123 also plans to open a coating plant in Romulus, Mich., expected to come on line during the first half of 2011. In addition to the DOE grant, the company received $125 million in state incentives from Michigan as part of its 21st Century Jobs Fund to help finance these manufacturing facilities.
A123’s customer list includes BAE, Eaton, Fisker, Navistar, Shanghai Automotive Industry Corporation (SAIC) and other global automakers and heavy-duty vehicle manufacturers. The company has also delivered more than 20MW of its Smart Grid Stabilization Systems (SGSS) to customers worldwide, making it currently the largest producer of lithium ion batteries for ancillary services for the power grid, according to the company.
Congratulations!
May this opening lead to significant public US Li-ion battery price reductions in the next few months.
Posted by: kelly | 13 September 2010 at 06:45 AM
Michigan and the Fed has done a laudable job of supporting the rebirth of automotive manufacturing in the State. It is just such new facilities that will invigorate the economy in some of Michigan's most devastated areas.
And it seems that A123 is diversifying its product application into areas like grid stabilization, UPS, PV/wind system buffers, etc. They must continue to see themselves as an energy storage company and not just a supplier of EV batteries. Though one big EV contract will keep them busy for a while.
They might also explore vertical applications such as light delivery vehicles for municipal and industrial fleets - and public transportation like hybrid buses that recharge at route head and tail points.
Congratulations to A123, Governor Granholm and the Obama Administration for enabling this import re-awakening of American manufacturing.
Posted by: Reel$$ | 13 September 2010 at 08:18 AM
Agreed.
The next thing is how well will it compete with similar batteries from Korea, China and Japan?
Posted by: HarveyD | 13 September 2010 at 09:21 AM
The standard analysis says cheap labor wins. However, making batteries can be automated to a large degree. If they have the customer contracts, they can invest in automation. If they can use state of the art technology in the battery chemistry, I see no reason why they can not compete.
Posted by: SJC | 13 September 2010 at 11:43 AM
A good start, but 600mWh is only about 25,000 100 mile range EVs. Keep going guys :-)
Posted by: DaveD | 13 September 2010 at 12:19 PM
Publicly financed advanced adaptive automation may be required to reduced labor cost to the level required to compete with Asian made batteries.
Local competition will need at least half a dozen such plants.
May the most efficient win.
Posted by: HarveyD | 13 September 2010 at 06:06 PM
Consumers and businessmen alike will choose to pay more for products that provide greater convenience or quality. In this case we may find people willing to pay higher prices for goods made in North America - because it will help rebuild economies, provide local jobs, or simply a sense of national pride.
IF NA manufacturing is to be truly revitalized, it needs to be done in partnership with the people. THEY must want to support their fellows by buying products made locally. This is putting to practice the slogan - "Think global, act local."
Posted by: Reel$$ | 14 September 2010 at 05:32 AM
Consumers and businessmen alike will choose to pay more for products that provide greater convenience or quality. In this case we may find people willing to pay higher prices for goods made in North America - because it will help rebuild economies, provide local jobs, or simply a sense of national pride.
IF NA manufacturing is to be truly revitalized, it needs to be done in partnership with the people. THEY must want to support their fellows by buying products made locally. This is putting to practice the slogan - "Think global, act local."
Posted by: Reel$$ | 14 September 2010 at 05:33 AM
Reel$$,
Get real. Consumers shop at WalMart and have no idea where the product was manufactured, and mostly don't care. A123 will be manufacturing all over the world if successful, so how do you know where your battery came from.
No, the answer for America is to compete more effectively. Produce more efficiently. And perhaps, with rising fossil fuel costs, the cost of shipping will offset any additional US manufacturing cost. Now if we would build electrified rail to reduce in-country shipping costs, that would help too.
Posted by: JMartin | 14 September 2010 at 07:50 AM
Let's say shipping costs are 10% of total product cost, but now oil is $1000 per barrel and they are 30% of the cost. No more shipping lithium from Bolivia, we must use U.S. lithium. No more shipping raw material to Asia and shipping finished product back. That is one possible scenario.
Posted by: SJC | 14 September 2010 at 10:50 AM
Car dealers in our area charge an average of $1400 for transportation regardless if the car comes from next door or all the way from Japan-Korea-EU etc. The real average cost is about $500. The difference is hidden profit.
Doubt that too many Canadian and Americans will accept to pay more for locally made products. The most prosperous retailers seem to be those selling imported goods. WalMart is a perfect example. It is getting harder to find locally may clothes, computers, phones, printers, HDTVs, batteries, tires, etc etc. The next items may very well be HEVs, PHEVs and BEVs. Doubt that transportation cost will matter that much.
Posted by: HarveyD | 14 September 2010 at 11:58 AM
The cost for freighter fuel is HUGE, but they can carry many cars and goods, which makes it more cost effective. I agree, transportation charges will not be a major factor, cheap labor overrides that and probably will for a long time. However, if peak oil arrives and fuel is harder to get, this could affect things quickly.
Posted by: SJC | 14 September 2010 at 12:25 PM
Sorry gents. I disagree. There is now a green, holistic movement to only buy products, and services from our local economies. The organic farm at the edge of town, the local butcher, the neighborhood bakery. This is the FOUNDATION of grassroots lifestyle. Think global, act local. It's a green credo.
Personally I find it more expensive to shop at the mass importers because the products they sell fall apart in six months. Shoes, clothes, toys etc. All made by cheap labor with little quality or imagination. This crap ends up costing consumers more because they have to go out an buy new crap to replace it. A junk, throwaway mindset.
I would rather pay MORE for good quality, locally produced food, clothes, shoes, services etc. - which last longer AND HELP MY NEIGHBORHOOD ECONOMY. It's holistic consumerism and it extends to things like HEV batteries made on our continent.
If you want a better economy - start supporting your fellows locally. Your example WILL change the world.
Posted by: Reel$$ | 15 September 2010 at 11:10 AM
I am willing to pay twice the price for U.S. made shoes, but there are none. New Balance just assembles some of their high priced models in the U.S. from foreign made components. If the consumer does not have that choice, it is not a choice that they can make.
Posted by: SJC | 15 September 2010 at 01:53 PM