U.S.-Built Electric Cars To Get U.S.-Made Battery Cells Too

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January 15, 2013 - Detroit, MI. 2014 Cadillac ELR revealed at the 2013 Detroit Auto Show. Photo by Joe Nuxoll.

January 15, 2013 - Detroit, MI. 2014 Cadillac ELR revealed at the 2013 Detroit Auto Show. Photo by Joe Nuxoll.

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While the number of plug-in electric cars built in the U.S. is steadily increasing, the lithium-ion cells in their batteries have mostly come from overseas.

But this turns out to be the year that cell production largely moves onshore as well.

The 2013 Nissan Leaf, now coming off the assembly line in Smyrna, Tennessee, is powered by lithium-ion cells made in an adjacent fabrication plant that started production last fall.

Now comes a report that Korean cell maker LG Chem will start producing cells at its Holland, Michigan, plant in the second half of this year.

Those cells will likely be used in batteries for the Chevrolet Volt and the upcoming 2014 Cadillac ELR, both built at GM's Detroit-Hamtramck plant, as well as the low-volume Ford Focus Electric, also built in Michigan.

The Volt was the best-selling plug-in electric car in 2012, with a total of 23,461 units delivered in the U.S. plus another 6,629 in other markets. U.S. Volt sales are expected to be higher this year.

LG Chem executives confirmed in a Reuters article that the company would begin pilot production of lithium-ion cells in the Michigan plant in July or August.

The $300 million plant has enough capacity to fabricate cells for up to 60,000 electric-car battery packs a year, but slow sales of the Volt in 2011 had led LG Chem to continue supplying cells from an existing production line in South Korea.

Volt Battery Pack

Volt Battery Pack

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The lack of production at the Michigan LG Chem plant came under fire from Senator Claire McCaskill [D-MO] and other politicians.

LG Chem received a Recovery Act grant of $150 million for the plant, of which it has spent $143 million, but the plant has not yet fabricated any cells that have gone into production vehicles.

News reports last fall of workers being paid to sit around, play cards, and do community service work did not sit well with politicians after a DoE audit confirmed the workers were idle.

The plant opened in 2010, but workers were furloughed last fall because the plant could not economically be opened until electric-car sales volumes increased from their 2011 and 2012 levels.

Nissan lithium-ion battery pack plant under construction, Smyrna, Tennessee, Jan 2011

Nissan lithium-ion battery pack plant under construction, Smyrna, Tennessee, Jan 2011

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The 2014 Chevrolet Spark EV, a low-volume compliance car, will use lithium-ion cells from a different maker, A123 Systems, made in its Livonia, Michigan, plant. 

GM recently confirmed that A123's bankruptcy and acquisition by a Chinese company will have no effect on the Spark EV's launch schedule; it will go on sale in California and Oregon this summer.

The Tesla Model S, the third domestically built electric car now selling in volume, uses thousands of small "commodity" cells from Panasonic, which holds a minor stake in Tesla Motors [NSDQ:TSLA].

Those cells are fabricated in Asia, and thus far, Tesla has said nothing about bringing production of its battery cells to the United States.

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