Michigan is becoming the center of US battery manufacturing • TechCrunch



Michigan, long the auto manufacturing capital of the United States, is now receiving public and private investment to build a series of battery manufacturing plants that will power the wave of electric vehicles hitting the market.

Demand for domestically produced batteries has reached new heights following the passage of the Inflation Reduction Act (IRA), which includes consumer tax incentives for the purchase of electric vehicles with materials from battery products in the United States. Battery makers are racing to grab available land and start production at factories to meet this demand, bolster their own supply chains and take advantage of the incentives under the IRA.

Announcements of battery factories and joint ventures between automakers and cell manufacturers have become commonplace in 2021 and 2022, especially in Michigan, Tennessee and other southeastern states. And they don’t seem to be slowing down.

Michigan won two more drafts this week.

Chinese battery maker Gotion has announced a $2.36 billion investment to build a battery component factory in Big Rapids that promises 2,350 jobs. The state of Michigan also saw a $1.6 billion investment from Our Next Energy (ONE), an electric car battery startup led by former executives of Apple’s secret car project, to build a battery factory in the canton of Van Buren which aims to create enough cells for around 200,000 electric vehicles per year.

“I’m proud that Republicans and Democrats have worked across the aisle to build our economic development toolkit and make it possible for Michigan to compete for every project and every job,” the governor said. Michigan, Gretchen Whitmer, in a statement regarding Gotion’s investment. “Together, we will continue to win investment in this space and become the go-to destination for electric vehicle and mobility companies. We will work with anyone and compete with everyone to continue bringing chains of supply of batteries, chips and electric vehicles in Michigan.

Earlier this week, Whitmer signed a package including additional investments — $496 million for future economic development projects and $350 million for venue development across the state — for the Strategic Outreach and Attraction Reserve fund. (SOAR) of Michigan. The fund, which totals $1.11 billion, is partly responsible for helping Michigan attract investment from Gotion and ONE.

Michigan was apparently competing with Texas, Georgia, Kentucky, South Carolina, Illinois and Ohio over Gotion, but the SOAR fund helped provide the right incentives to win the business, including about $175 million to support critical industries and site preparation, the state said. .

The fund was also used to approve a $200 million grant to support ONE’s project which promises to create 2,112 jobs by the end of 2027 when the plant is expected to be fully operational. This money can be taken back by the State if the ONE does not create or maintain this number of jobs.

Michigan’s incentives have also attracted automakers looking to produce their own batteries domestically.

Earlier this year, General Motors invested $7 billion to convert the Orion Township assembly plant into a full-size EV pickup plant and to build Ultium’s third battery cell plant. (GM’s battery joint venture with LG Chem) in Lansing. The state has included a total of $666.1 million in support for GM’s projects.

In June, Ford announced it would invest $2 billion in three electric vehicle assembly plants in Michigan. The state contributed an additional $100.8 million.

Detail new investments

The IRA not only spurred domestic battery production to create new jobs and a new industry for the United States, but also reduced dependence on China, which has been the absolute dominant force. in the supply and production of battery materials.

Gotion’s Michigan investment follows a string of other Chinese battery giants expanding overseas, both to continue supplying the US market and to find a home for their products. CATL, for example, is building a plant in North Carolina, and SVOLT is working on its second German plant. China’s battery industry appears to be producing more batteries than domestic demand requires, so tapping into overseas markets could be an indication that growth in China will slow. Not to mention, Gotion’s margins have been underperforming, according to analysis by “24 Waves,” a blog that focuses on China’s new economy.

The Chinese company’s Michigan plant will cover an estimated area of ​​about 260 acres and produce about 150,000 tons of cathode material per year through two 550,000-square-foot production facilities, according to Michigan’s Economic Development Corporation. The project will also include the construction of two production plants dedicated to the production of 50,000 tons of anode material per year.

Like Gotion, ONE intends to produce lithium iron phosphate (LFP) cells at full capacity of 20 gigawatt hours per year. Most of the U.S. auto industry has focused on lithium-ion cells which contain varying amounts of more expensive metals like nickel, cobalt, manganese, and aluminum, which have a higher energy density. high and greater range, but have been linked to several battery fires. LFP technology is generally cheaper and less volatile, but has less range. Now, many automakers are exploring cells in part to alleviate material shortages.

ONE says its LFP packs will have comparable range to current battery packs which are made with nickel, cobalt and manganese cathodes, but will cost 35% less. Production of batteries for delivery trucks is expected to begin in March, followed by automotive customers by the end of 2024, the company told the Wall Street Journal.

The company also aims to produce a battery with a range of over 600 miles with cells up to 50% cheaper than the current standard. This pack, which is scheduled for production in 2026, will include two types of chemistry: LFP technology for daily driving and anodeless cells for longer trips.

Neither ONE nor Gotion has revealed which automakers they will partner with once their batteries are operational, although ONE has partnered with BMW to produce a BMW iX prototype that uses some of its battery technology.

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