US drive to close electric car gap

By Bernard Simon in Toronto
Published: April 14 2009 22:29

A US-French joint venture plans to build North America’s first lithium-ion battery cell plant as part of a belated drive by the US public and private sectors to close the competitive gap with Asian electric-car technology.
Johnson Controls, based in Wisconsin, and France’s Saft, which opened a similar facility in France last year, said on Tuesday that the cells would be produced at a converted Johnson car parts plant in Michigan.

The state of Michigan would cover two-thirds of the plant’s $220m cost through tax credits and other incentives.
The plant is the latest in a flurry of moves to enhance North American battery technology amid predictions that electric vehicles of various types are set to play an increasingly important role in mass transportation.
Japanese companies currently dominate the market for hybrid-vehicle batteries. Panasonic supplies the nickel-metal-hydride battery used in Toyota’s popular Prius hatchback.
Alex Molinaroli, head of Johnson Controls’ power solutions division, said that battery demand in the US was being pulled higher by government support for General Motors and Chrysler, as well as provisions in the Obama administration’s $787bn stimulus package passed this year.
The bill sets aside $2bn in financial support for battery manufacturers and provides a $7,500 credit for the purchase of a plug-in hybrid vehicle.
In addition, the US Department of Energy is expected to earmark a sizeable portion of its $25bn Advanced Technology Vehicle Manufacturing Program for battery development.
Meanwhile, A123 Systems, a Massachusetts-based lithium-ion battery maker, said this week that it had raised $69m from, among others, General Electric, ConocoPhillips, and Detroit Edison, a power utility.
A123 signed a contract last week to supply batteries for hybrid-electric vehicles being developed by Chrysler. GM this year chose South Korea’s LG Chem to provide batteries for its Chevrolet Volt plug-in hybrid.
Separately, an alliance of battery manufacturers set up late last year is joining forces with the US Department of Energy to set up a research and development centre in Kentucky.
According to SupplierBusiness, a trade publication, the alliance is seeking $1bn-$2bn in government aid to build a foundry for lithium-ion batteries.
The Johnson-Saft plant, will initially supply batteries for, among others, Ford Motor’s first plug-in hybrid vehicle.
Copyright The Financial Times Limited 2009