A123 Opens Lithium Ion Battery Plant in Michigan, Wants to Create Global Hub for Electric Vehicles

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his career in the automotive industry, working for Lear and Bosch before joining A123 just over a year ago. His automotive and transportation division makes up 60 percent of A123’s revenues, and is the company’s biggest focus area, followed by its power-grid and consumer products.

“The battery industry is really a rejuvenation for the whole area,” he says. “This is extremely important for Michigan from an economic standpoint. The engineers and the skilled plant labor is all here. We’ve been able to tap into it…The talent in Michigan is second to none when you want to be in the auto industry.”

What’s more, Forcier says, the plant and others like it are an important step for U.S. manufacturing. “Prior to the American Recovery and Reinvestment Act, there was no battery industry to speak of in the U.S.,” he says. “Most of it came out of Korea and Japan. It’s a huge deal for the United States.”

Although some observers are opposed to government handouts, Forcier says, the plan is to do whatever it takes to make the cost of electric vehicles competitive with gas vehicles—something he thinks will happen within five years. “We’re not here to take handouts forever. It’s just to get competitive. We’re passionate about independence from foreign oil.”

A123 already has a research and development site in Ann Arbor, MI, with more than 75 employees. That facility, which chief technology officer Bart Riley oversees, came from the company’s acquisition of T/J Technologies in 2006. A123 also has a manufacturing plant in Romulus, MI, slated to open officially in the first half of 2011. That plant, which already has some employees, will produce the special coatings for A123’s batteries. (The coatings are currently made in China, where A123 built its first plant.)

So, how crucial are the new Michigan factories to A123’s business? “It’s extremely important,” Forcier says. He notes that the company was able to get the Livonia plant up and running quickly, partly because it took an existing, vacant building (which had been owned by Technicolor) and renovated it to make batteries. The accelerated timeline—A123 took possession last October and started building battery cells in July—allowed the company to take business from Navistar and Fisker Automotive. “We wouldn’t be able to take it if we had to build a new factory,” Forcier says.

In the bigger picture, automotive lithium ion batteries are projected to become a $50-100 billion market by 2020—and A123 intends to remain one of the big three players in that business. “The likelihood is that kids being born today won’t know a world where cars aren’t plugged into the wall,” Forcier says. “My three year old will think plugging a car in is completely normal.”

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Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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