Michigan is getting into the lithium-ion battery manufacturing business, with four companies announcing plans for a combined $1.7 billion in new facilities, part of the first wave of bringing full-scale production to North America.
Most lithium-ion batteries — which include engineered plastics for membranes, films, connectors, packaging and wiring — are made in Asia. But with the North American auto industry gearing up for more hybrids and even all-electric cars, molders, battery makers and resin suppliers alike are setting up for at least some homegrown production.
“The hope of all of these [plans] is that we're bringing this to Michigan and creating a complete supply chain around this technology,” said Kristina Schnepf, global public affairs director for Dow Chemical Co.'s new business programs.
Dow and joint venture partners Kokam America Inc. of Lee's Summit, Mo., and Townsend Ventures LLC of Charlotte, N.C., will invest $665 million to create KD Advanced Battery Group LLC.
The new firm will have an 800,000-square-foot battery-making facility in Michigan, either in suburban Detroit or near Dow's global headquarters in Midland. KD Battery will employ 885, Schnepf said.
The state of Michigan approved a tax credit for the project valued at $44.7 million over 15 years, with an additional tax credit of $100 million from a fund focused on battery manufacturing. The state has approved $543.5 million in overall tax breaks for the four battery projects.
Dow aims to use the joint venture to expand into the lithium-ion battery business overall. “This is a commercially viable technology being brought to the U.S.,” Schnepf said.
The companies did not announce specifics, but said that the project will focus on large-scale manufacturing, not just small lines for research and development.
There are some lithium-ion-battery development lines operating in the U.S., including a Milwaukee facility for Johnson Controls-Saft Advanced Power Solutions LLC.
The company said it will invest $220 million to create a facility in Holland, Mich., revamping a site that now houses an auto interiors plant owned by partner Johnson Controls Inc. of Glendale, Wis. The Holland plant will employ 498 and have capacity of 15 million lithium-ion cells annually.
Other projects include:
* A more than $600 million investment by A123Systems Inc. in initial coating, cell manufacturing and pack assembly, starting with an operation in Livonia.
The Watertown, Mass.-based company will start at a site in Livonia and could expand to additional sites in southeast Michigan, ultimately creating more than 5,000 jobs. The Michigan Economic Growth Authority (MEGA) has approved tax credits of $125.2 million for the project.
A123Systems has entered a development and manufacturing agreement with Chrysler LLC to provide battery systems for the company's Envi product line. The company also has received a $1 million reimbursable grant to offset infrastructure improvement costs of the Livonia project, and a $1.25 million grant from the Southeast Michigan Community Alliance to train new employees.
* A more than $200 million investment by Seoul, South Korea-based LG Chem Ltd., in partnership with its Troy, Mich.-based U.S. subsidiary Compact Power Inc. and General Motors Corp., to produce lithium-ion battery cells.
The project is expected to create more than 300 jobs.
A site was not announced, but a MEGA board memo said a 660,000-square-foot plant is being considered.
The state has approved $125.2 million in tax credits for the project. That approval depends on the introduction and passage of legislation that would provide for more tax credits than previously authorized.
The advanced battery projects were among several initiatives going before the MEGA board in Lansing, and Gov. Jennifer Granholm thanked the companies for their prospective investments. She said that “phenomenal” projects such as the battery plants will move Michigan forward in its economic diversification and alternative energy development efforts.
“We are all about going from rust to green,” Granholm said.