LG Chem to Begin US Battery Production For Volt in Late 2013
To say it has been a winding road to the start of US-based battery production for the Chevrolet Volt and Ford Focus Electric at LG Chem’s Holland, Michigan plant, would be an understatement.
However, LG Chem’s head of battery tech, Kim Jong-hyun told reporters Friday, after a earnings conference, that the company’s US facility would build it’s first production lithium cells in the second half of 2013.
Here is some back-story on the plant from last year:
- April 2012 – LG introduced rolling furloughs for employees, despite a forecasted a start of production for lithium cells by “mid 2012“
- September 2012 – LG continued their furlough program, and disclosed that no US production of battery cells had yet commenced at the plant (due to low demand), but hoped to start production “as soon as possible”
- October 2012 – a local TV station (WOOD TV8) decided to pick up the story and run with it (w/video report), and finds the company is paying skilled employees to clean outside, play cards, and read magazines, while still drawing down the last $18 million or so from the federal government
- February 2013 – from the national spotlight that was cast on the Michigan facility by the October news report, the Office of the Inspector General completed a review of the operation, and found that LG Chem has misused DoE funds, and had offered some suggestions on how to make it right
Which brings us to today’s news of LG Chem deciding to make good on original intentions to build lithium batteries in Michigan.
So did the company do it because of the renewed government pressure, along with the negative media focus on the Michigan plant of late? Probably; but regardless of the motivation, at least it is finally going to happen.
“We will start preparations for the plant’s operation from the second half. It will soon commence operation,” said LG Chem’s chief financial officer Cho Suk-jeh. Kim Jong-hyun, head of LG’s battery division said, that the company “…plan(s) to start a trial production in July or August.”
LG Chem hopes to be able to bring production up to a level to supply 60,000 (Volt-sized, 16 kWh) cars per year by the end of 2013. However, LG’s CFO doesn’t expect the company to be profitable in the near term.
“We don’t think we will be able to make profit on car battery business (this year). We are trying to minimize losses on car batteries.”
General Motors sold 31,400 Chevrolet Volt (or Volt-alike Amperas) in 2012, while Ford sold 685 Focus Electrics.
In 2013, General Motor’s expects to sell 36,000 Voltec vehicles, while Ford does not see the Focus Electric to be a major contributor to their plug-in efforts (which also includes the C-Max and Fusion Energi products). We expect about 2,500 all electric Fords to be sold by year’s end.