LG Chem Officially Announces Start Of Battery Production In US For Chevrolet Volt

2 years ago by Jay Cole 21

LG Chem's Holland Facility To Start Commercial Production In July Of 2013

LG Chem’s Holland Facility To Start Commercial Production In July Of 2013

In a move that was foreshadowed a couple weeks ago at LG Chem’s earnings conference, the battery maker has officially announced that they will launch commercial production of lithium-ion battery cells in Michigan, for use in the 2014 Chevrolet Volt, starting in July.

Chevrolet Volt Battery Production Finally Come To The US (first Volt lithium-ion battery pack shown above)

Chevrolet Volt Battery Production Finally Come To The US (first Volt lithium-ion battery pack shown above)

For those who have been following the story of US-based battery production by LG Chem in Michigan, from announcement of the plant, to employees being paid to play cards, to subsequent federal inquiries about proper appropriations of DoE funds, this is the conclusion of a very long, almost soap opera-like story.

It should be noted that while the plant design currently calls for about 60,000 Volt-sized packs to be built per year; LG Chem, in response to lighter demand for the car than was originally anticipated at launch, has tooled up only about 60% of that capacity by starting 3 of a proposed 5 assembly lines.

The company has plans to reassess demand later, and will utilize all five lines “by September 2015,” which interesting also aligns with expectations of a 2nd generation, 2016 model year Volt, that CEO Dan Akerson recently said would be priced $7,000-$10,000 less.   It is also worth noting that the plant will is expected to produce 23 kWh battery packs for the Ford Focus Electric at some point later in 2013 as well, but annual production is only pegged around 2,000 units for 2013.

Still, in the end, we got there; and are happy to see LG Chem follow through on a decision to build lithium batteries for American cars, in the US.

LG Chem Press Release:

LG Chem Michigan Inc. (LGCMI) announced today the company will launch commercial production of automotive lithium-ion battery cells in July, 2013 at its Holland, Michigan facility once it has successfully completed the Production Part Approval Process (PPAP) and gained customer approval.

Test runs have already begun at the facility and the company is targeting the start of commercial production this July. LGCMI anticipates shipping product by the end of this summer. The plant initially will manufacture batteries for the Chevrolet Volt, and the volume is expected to consistently increase depending on the EV market and securing additional contracts. The company is also working to procure additional programs for future production.

LGCMI had originally planned to install five assembly lines in the Holland facility but has set up three lines so far. The company said it is planning on finishing the remaining two lines by September 2015 and will proceed with the plan as they study the market demand and other surrounding circumstances.

LGCMI said the launch of commercial production at the facility will position the company strategically to obtain additional electric vehicle (EV) business in the United States and to compete for energy storage systems (ESS) business. Lithium-ion batteries are expected to play an important role in smart grid electric utility management as storage devices for electricity produced by both conventional and alternative methods.

“LGCMI remains committed to achieving the vision on which our Holland facility was built,” said Sain Park, who is President at LGCMI. “We remain committed to creating good jobs in the Holland community and supplying excellent products to our customers. Our plan is to operate the Michigan plant as a strategic location to meet customer needs, secure future orders and compete aggressively in the ESS battery market.”

The company said commercial production at LGCMI will provide the ability to supply other U.S. automotive companies efficiently and increase its competitive position in securing future orders.

Currently, LG Chem, Ltd. supplies EV batteries to more than 10 automotive OEM companies. In addition, LG Chem supplies ESS mass storage batteries to about 10 global clients which include ABB (a global leader in power and automation technologies), SCE (the largest power utility company in California), and IBC Solar in Germany.

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21 responses to "LG Chem Officially Announces Start Of Battery Production In US For Chevrolet Volt"

  1. Schmeltz says:

    Finally! Glad to see LG making good on a promise that they made years ago.

    Side note, if they are figuring to ramp up for more production in 2015, then it must be pretty clear that LG will be GM’s exclusive supplier of lithium ion batteries, at least for the forseeable future. You would think with all of the testing of various other battery chemistries and manufacturers that another competitor to LG might be emerging by now…I’m thinking of Envia systems in particular. Then again LG definitely has street cred by now. Maybe that’s worth more to GM than revolutionary ideas at this point.

    1. Anthony says:

      I’m sure LG is working on new cells and chemistries internally. When the time comes to ramp up output in 2015, LG will probably have to update the battery manufacturing technology for the newer batteries.

      You aren’t going to see the big headlines and bold promises of start-ups like Envia or CalBattery, they’re just plugging away, working to make their batteries hold more energy.

    2. James says:

      Any metal air technology has some growing pains before being ready
      for mainstream use. The promise is there, but the hurdles are also
      generally understated as “details”. Much more research is needed
      to iron out zinc-air, lithium-air batteries. Hopefully the government
      subsidized research zones will be the trick to get us over the hump
      to batteries that are much more energy-dense.

  2. Future Volt says:

    So will this cause the price of the 2014 Volt to drop a little? Like it did for Nissan’s Leaf when production started in the U.S.?

    1. Anthony says:

      Yes, its been speculated that the 2014 Volt price will drop a non-trivial amount (more than $1000). I’m expecting that announcement this month, along with the delivery dates for the 2014 model along with all the details (options, etc).

  3. bloggin says:

    This is a good indication that there will be a price drop with the 2014 Volt that starts production on July 15th.

    With a new production facility comes better cost cutting efficiencies, along with battery price dropping substantially. GM tossed out the $7k to $10k price drop numbers, and odds are that $7k will be the initial price drop.

    So I expect the loaded 2014 Volt to start at $32,145.

    Also there is currently only one fully loaded Volt trim level. I expect to see a less expensive trim level added to the Volt lineup, especially following how successful it’s been for the Leaf with three trim models, which could get the Volt below $30k. GM really does not have time to wait for a completely new model to increase sales volume and try to become profitable.

    LG Chem also makes the battery for the Focus Electric. 2014 model production starts July 8. So I expect to see a less expensive entry model and further price drop for the current loaded model to better compete with the Leaf, where the price drop has helped sales dramatically.

    Ford already announced a lower priced S trim level for the Fusion Hybrid. Similar feature reductions may be relevant for the entry Focus Electric trim.

    1. James says:

      It seriously cannot happen soon enough.

  4. Anderlan says:

    Wow, increasing volume and localizing (continentalizing, anyway) production decreases prices. Who’d’ve thunk it? Can the oil defenders who lambasted battery prices as an insurmountable obstacle please die an oily death now, on behalf of all humanity?

  5. MTN Ranger says:

    I will say that the 2014 will probably start at $37,000 at the lowest (This will allow them to advertise a sub $30,000 price after tax credit). True cost savings will not be possible until the second generation in 2015.

    1. Aaron says:

      That $30K mark is a nice one to aim for, but they (GM) also has to think about their Cruze. The Cruze has undercut the Volt’s price so much that many buyers of the Volt went to the Cruze instead.

      Pricing these two vehicles is a complicated game, one that I’m glad I don’t have to balance.

      1. James says:

        I don’t see this as a dilemma, as much as a large bonus for Chevy.

        Now with a price-adjusted Volt vs. the Eco Cruze and Cruze Diesel,
        they are beginning to fill in the gaps in their model line to meet
        the needs of a wide spectrum of buyers.

        Still, the lack of a decent hybrid will cost GM mucho dinero. Volt
        doesn’t slot in with Prius or C-Max hybrids – it makes the jump from
        the Cruzes to a plug-in very sharp. A less costly Volt ( such as Akerson
        aludes to ) would fill that bill nicely.

        1. GeorgeS says:

          So totally true James.

          Chevy sales of all hybrids including plug sucks. That’s cuz e-assist isn’t selling. In April Ford outsold GM 2 to 1 in the hybrid+plug in market. (8K vs 4K).
          http://green.autoblog.com/2013/05/03/april-2013-green-car-sales/

  6. Bonaire says:

    With the words of the fake redneck comedian LtCG …. “Get ‘r done”

    Very cool to get the battery plant started up. This can also allow the glut of Volts at dealerships to be sold off in June at cut-rate discounts. Might pick up a 2nd one for my wife if the right deal is out there.

    MSRP for 2014MY should be (IMO) $36750 + options.

    1. Bonaire says:

      And, hopefully GM can get more Volts up to Canada where in areas like Quebec, electric prices are low and gasoline prices are high.

    2. Dave R says:

      That’s way too high. Look at the competition, they all start in the low $30k range. GM needs to lop $10k off the base MSRP, even if it’s a very stripped down model like the LEAF S. Use the low price to get customers in the door, then sell them a better optioned model.

      1. Thomas J. Thias says:

        Gonna call Greens Law of Debate on you, pal…

        “Anything is possible if you don’t know what you are talking about.”

        And I an being kind!

        The Chevrolet Volt is an Upscale Midsized car comparable to the 2013 Infinity G, 2013 Mercedes C- Class, 2013 BMW 3 Series and the Cadillac CTS.

        So declares the news, finance and business publishing powerhouse Us News. In fact on their website on a rolling leader board of best in the world rating, the 2013 Chevrolet Volt is in a 4 way tie in 4th place besting the 2013 Mercedes C- Class.

        While passionate feelings may disagree I’ll take this 3rd parties studied ratings over the teeming swarms of Volt detractors that pollute Cyberspace.

        Source Us News May 7th, 2013

        http://usnews.rankingsandreviews.com/cars-trucks/rankings/Upscale-Midsize-Cars/

        Best-

        Thomas J. Thias

        @AmazingChevVolt

  7. James says:

    A $1000.00 price drop ( MSRP ) for Volt won’t be more than
    a ripple. The Chevrolet brand needs a Prius fighter. Think about
    the wildly successful Corolla and how it was responsible for so
    many competitors to spring up in the marketplace. Corolla still
    dominates that slot, but not by much. Corolla fighters didn’t cost
    tons in R&D to develop, so they pop up overnight ( in car terms ).
    A Prius-fighter is a huge undertaking for any manufacturer – and
    bringing competition to bear in that segment ( 50mpg + ) is a costly
    proposition. GM enters with Voltec, but it’s so expensive, they don’t
    take the leap to mass-produce it at a lower price. Once the
    factors are in place to approach Prius pricing with Voltec capabilities,
    Toyota will be on notice. Think of a Camaro-Mustang two horse race!

    This would be ideal.

    1. Thomas J. Thias says:

      Great idea James- Say, let’s drop a 6-11 AER Mini Voltec in the Chevrolet Cruze and take on the Toyota Prius PI. Then we can brag that it takes only 3 hours to fully charge the traction battery compared to the Chevy Volt’s 8 hours!

      Include instructions to remember to plug in this Voltec Cruze, like the Prius PI 4 times to equal the AER of the Chevy Volt.

      This, while being a total worthless use of the Voltec Drivetrain, due to its short all electric range would at least be a fair match to the best that Toyota can do.

      I’ll keep with the ’bout a buck a day’ in electricity cost rather then spending the $4.00 bucks or so a day for that gallon of gas that goes with driving the tiny AER range Toyota 1,250 miles a month as I do currently in my Chevy Volt!

      On the other hand, the Volts ranking on the financial, news and business publishing powerhouse US News, website, where the Volt currently ranks above the 2013 Mercedes C -Class changes this conversation entirely.

      http://usnews.rankingsandreviews.com/cars-trucks/rankings/Upscale-Midsize-Cars/

      Best-

      Thomas J. Thias

      @AmazingChevVolt

  8. GreenDay says:

    So how long has that facility been paying to play cards?
    How long have they had to keep the governments money to finally NOW build batteries?
    When is their first payment/installment to be expected for payback to the Government from the DOE Loans?

    Waste of tax payer dollars!!!

  9. martinwinlow says:

    Can someone confirm this means actual Li ion *cells* are being made not just packs assembled from the usual imported cells? Ie, copper, aluminium, lithium salts and organic electrolyte in at one end and Li ion cells out the other? I know the article implies this but you know what journalists are like! MW

    1. Jay Cole says:

      Hey Martin,

      Yes, the whole sha-bang (not a word) is produced in Holland You can pretty much see the whole operation/all the equipment if you search out the DoE award summary on the $151 million grant.

      …electrode oven room coater, electrode roll press/slitter skid, vacuum dryer, ultrasonic equipment, sol recovery system, profile projectors, jumbo roll rack and spool, magnet separtor related to the electrode process, etc., etc.

      If you are super-duper interested, I will find it for you, (=