GM announces $43M battery plant

General Motors became the first major automaker to announce plans for a battery manufacturing facility today, unveiling a roadmap that will jump start production of up to 70,000 lithium-ion battery packs a year by the end of 2010.

The batteries produced will be used primarily in the car company’s long-anticipated electric Chevy Volt. The plant will be located near GM’s headquarters in Michigan, which is quickly becoming a mecca for the battery industry, with A123Systems, Johnson Controls and others drawing significant Department of Energy stimulus funds to the region. Production of the battery packs for the Volt is heavy-duty business — each one weighs 400 pounds. The actual cells will be made inexpensively by LG Chem in South Korea.

The parts will then be assembled into pack form at the leased plant in Michigan. As an electric-hybrid vehicle, it is said to run 40 miles on one full battery charge (a charge that can be delivered overnight via a standard electrical outlet). Earlier this week, GM reported that this system will allow the car to travel 230 miles per gallon (for street driving), which is more than four times the mileage of the Toyota Prius.

GM seems to be on a roll these days — a roll spearheaded by the Chevy Volt. The DOE awarded the company $105 million in grants during the second round of its Advanced Technology Vehicles Manufacturing program. GM’s absence from the first round of grants was very obvious — interpreted by many as a clear message to the company that it first needed to get its act together after the bailout and declaring bankruptcy — especially since Ford and Nissan were named as recipients.

The Volt stands a good chance of being the first mass-market, plug-in hybrid electric car to make it to market. This would give GM a big leg up over its competition, even though it plans to only produce 10,000 cars in its first year. Ultimately, it plans to scale production to 60,000 cars a year. It will be interesting to see if the other major automakers follow suit, leasing battery plants of their own. For now, most of them are relying on partnerships with nimbler third-parties. For example A123Systems has been contracted to provide battery packs to Chrysler, and Johnson Controls has been tapped by Ford. GM is working closely with LG Chem — but the relationship is slightly different since it is based overseas.

Source : Venture Beats, by Camille Ricketts, August 13th, 2009