GM Plans to Build Car Batteries in Michigan

As we reported earlier, US lawmakers intend to put the brake on the supremacy of Asian car batteries and encourage the development of a large-scale production plant for the lithium-ion battery.

The Detroit News announced yesterday that General Motor Corporation has already confirmed the launch of battery production in southeast Michigan. It seems that they've finally made up their mind and the electric Chevrolet Volt will be produced after all and it will be powered by lithium-ion batteries made in Michigan, USA.

What's more, GM has finally decided to reveal their plan of bringing the Volt to market. The $1 billion advanced battery development strategy includes the selection of Korean company LG Chem as the supplier of lithium-ion battery cells. LG Chem's subsidiary, Compact Power as well as A123 Systems, Hitachi and Cobasys will be involved in the battery supply chain.

Compact Power will build lithium-ion battery packs for Volt prototype vehicles until GM's battery facility is ready. GM is also going to join the University of Michigan to create a new automotive advanced battery laboratory in Ann Arbor and a specialized curriculum within  College of Engineering (from the University of Michigan) to develop automotive battery engineers.

Each start is difficult, but GM is optimistic about the future and has high expectations that work on the Michigan battery plant will start later this year. The Detroit automaker is expected to use an already existing facility but it's still waiting for the government incentives to be approved.

That might come sooner than expected as Gov. Jennifer Granholm is expected to sign a new law calling for $335 million in state incentives to encourage battery research and manufacturing to the state on Wednesday.

Speaking about money, GM officials confessed there was, however, a slight cost difference between battery suppliers A123 Systems and LG Chem but they favored experience and not money in the selection process, confessed GM Vice Chairman Bob Lutz. "We need to eliminate risk as much as possible because we're going so fast," GM's product chief said.

Moreover, if you don't have any experience, you might consider “borrowing” it if you pay enough for it. Lutz admitted that the technology needs to come from already experienced countries such as Korea, China and Japan where the government encourage this kind of research.

Once they get the experience to produce their own batteries, GM is likely to sell them to others as well. For the moment, the automaker benefits from exclusivity in producing the batteries but it's not yet known for how long...