LG to build li-ion cell factory in Michigan

LG Chem made it official today. The South Korean manufacturer is moving forward with plans to start production of lithium ion cells in Michigan. LG Chem and its U.S. subsidiary, Compact Power Inc. (CPI), will spend $303 million to build the cell plant in Holland on the west side of Michigan. By 2013, the facility figures to employ over 400 people. Groundbreaking will start this summer with the factory fully operational by 2012.

At full production, the plant will have enough capacity to produce cells for 50,000-200,000 packs depending on the configuration (E-REV vs PHEV). LG Chem already has supply agreements with two major automakers, General Motors and Hyundai-Kia.

Hyundai is using LG Chem cells and battery packs in the Korean market Elantra hybrid along with sister company Kia, which builds the Forte hybrid. Hyundai will be launching the Sonata hybrid in the U.S. market later this year.

General Motors is using LG Chem cells in a pack of its own design for the Chevrolet Volt. It will also use the same cells in packs manufactured by CPI for a plug-in hybrid based on the two-mode system for an as yet unnamed vehicle.

With Volt cell manufacturing moving to Michigan, the majority of the value of the new car will be manufactured within a fairly small geographic area. Along with the $700 million being invested by GM in assembly and systems manufacturing for the Volt in Michigan, this brings the total to over $1 billion. Much of the funding for the plant will come from federal and state incentives including a $151 million grant that CPI received last year as part of the stimulus bill. LG Chem will contribute matching funds to the program.

LG Chem joins A123 Systems and Johnson Controls-Saft (JCS) in manufacturing lithium ion batteries in Michigan. The JCS factory is also in Holland while A123 is setting up shop closer to Detroit in Livonia.

Source : AutoBlogGreen, by Sam Abuelsamid, March 12th, 2010