Compact Power’s Chief Executive, Prabhakar Patil, told Reuters this week that the Michigan-based unit of South Korea's LG Chem, is investing between $300 million to $400 million to build a battery cell manufacturing facility in Michigan. The project will also be funded by $151 million in grants awarded by the Obama administration, he added.
On Monday, Renewable Energy Magazine reported on the $2.4 billion package put together by the US Administration as part of its "green" economy vision to stimulate advanced battery technology for hybrid and electric-drive vehicles. The funding Compact Power has been assigned forms part of this package and will enable it to build the new battery cell plant, which will be capable of building 15 to 20 million cells annually; supporting up to 250,000 battery packs, explained Patil. Each battery pack will power one vehicle. With almost all battery manufacturing for advanced technology vehicles currently based in Asia, this move will also help geographically diversify battery manufacturing and build up US-based capacity to meet the demands of its own car manufacturers.
Compact Power has already signed a contract to supply next-generation lithium-ion batteries for General Motors Co's Volt plug-in, which is at the forefront of the car manufacturers plans to move away from gas-guzzling vehicles. It has also won a contract to build batteries for GM's planned SUV plug-in for the Buick brand."We're seeing a strengthening of commitment for electric vehicles not only from GM but other manufacturers that we believe this is going to be a sustainable business, sustainable volume," Patil said in an interview. "Plus, the US government is very serious about supporting battery technology".
Under the contract with GM, LG Chem will initially manufacture battery cells for the Volt at its existing plant in South Korea, which will then be shipped directly to a GM battery assembly facility to be built in Michigan.
When Compact Power’s new plant becomes fully operational in 2013, it will provide employment for more than 400 people.
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