GM to Open Lithium-Ion Battery Plant

BY SHIRLEEN DORMAN
General Motors Corp., looking to supply its Chevrolet Volt plug-in electric car, said it plans to build the first lithium-ion battery-pack factory operated by a major auto maker in the U.S.
GM hopes the Volt will do for the Detroit auto maker what the Prius hybrid did for Toyota Motor Corp. of Japan: give the company a must-have technology while cultivating a green image.
Preparation for the plant, to be located in Michigan, is to begin early this year, with production tooling to be installed midyear. Output is expected to start in 2010.
Until GM's battery facility is operational, Volt's battery cells will be supplied by LG Chem Ltd.'s Compact Power Inc. unit, based in Troy, Mich. A joint engineering contract with Compact Power and LG Chem is expected to speed up development of the Volt's lithium-ion battery technology. GM has been testing battery packs for the Volt, powered by cells from LG Chem, for the past 16 months.
"The design, development and production of advanced batteries must be a core competency for GM, and we've been rapidly building our capability and resources to support this direction," Chairman and Chief Executive Rick Wagoner said at the North American International Auto Show in Detroit, where the Volt concept was rolled out two years ago.
Mr. Wagoner said more than $1 billion has been committed to the Volt. Uncertainty over its future widened in December after GM delayed construction of a Flint, Mich., factory slated to build the car's engine.
GM's financial situation has deteriorated significantly, and the auto maker has burned through billions of dollars each quarter. GM and Chrysler LLC secured a $17 billion federal loan package in December.
Batteries have been one of the biggest hurdles for U.S.-based electric- and hybrid-vehicle manufacturers. Batteries have been made in volume in Japan, South Korea and elsewhere in Asia, and auto makers have been concerned that if battery supplies tighten, expensive Asian battery-making capacity may go to Asian auto makers first.
Write to By Shirleen Dorman at shirleen.dorman@dowjones.com