LG Chem Adds 4th Battery Plant Line In Michigan, But For Whom?

OCT 24 2015 BY JAY COLE 44

LG Chem has been owning the spotlight when it comes to electric vehicle news of late.

First, it was for selling General Motors lithium-ion batteries at a price of $145/kWh (of which the company was none too pleased with GM for disclosing), then for the revelation it will supply multiple components past just the raw batteries on the upcoming Chevrolet Bolt – including things such as the on board charger, the instrumentation cluster and the drive motor.

Battery Packs Are Assembled By GM At Its Brownstown Facility For The Chevy Volt And Spark EV After Being Manufactured By LG Chem At Its Holland, Michigan

Chevy Volt and Spark EV Battery Packs Are Assembled By GM At Its Brownstown Facility After Being Manufactured Nearby At LG Chem’ Holland, Michigan Plant

Now comes word that the company is adding a fourth line to its Holland, Michigan battery facility – for a mystery automaker.

GM has yet to confirm if any batteries for the Bolt will come from Holland, but GM’s Bill Wallace, GM’s director of global battery system engineering told the Detroit news that the “unnamed customer” for the 4th battery production line is “distinctly separate” from the Bolt.

Jeremy Hagemeyer, the LG Chem plant’s human resources manager, would also not give up a name, other than to say it wasn’t GM, and that “production would begin the first quarter of next year.”

Mr. Hagemeyer added to MLive:

“It’s an exciting time at LG Chem, it’s great to see more equipment coming in.”  The plant on the east side of Holland is running two shifts and plans to add a third shift later this year, he said.

Aerial CG View Of LG Chem's Holland, MI Plant

Aerial CG View Of LG Chem’s Holland, MI Plant

At this point in time, it is not expected that LG Chem’s Holland facility will;at produce the Chevrolet Bolt batteries, that will likely stay back home in South Korea, along with the pack assembly.

“We’re capable of making all kinds of products, but were not currently making that line,” Steve Zachar, formation manager at LG Chem in Holland.

Currently, the plant provides battery cells for the Chevrolet Volt, Cadillac ELR, Spark EV and shortly for the upcoming Cadillac CT6 (with 37 miles of electric range) that goes on sale soon in China (and for the US in 2017).

This new line of production will also bring battery pack assembly to the plant for the first time, something it had not done in the past with its GM contracts.

President Obama gets into an Ford Focus Electric In July Of 2010 during the groundbreaking ceremony For LG's Holland Plant in July of 2010

President Obama gets into an Ford Focus Electric In July Of 2010 during the groundbreaking ceremony For LG’s Holland Plant in July of 2010

If we were to go out on a limb to guess who this automaker is, given the history of the plant and its almost exclusive relationship with General Motors, there has only been one other automaker linked to it in the past; and that is Ford.

From July 2010:

The lithium-ion cells initially will be manufactured in Korea by CPI parent company LG Chem. LG Chem and CPI will be localizing cell production at their new site in Holland, Mich.” – Ford press release on the then upcoming Ford Focus Electric

However, the waters became murky around the Ford, as LG Chem notoriously re-allocated all intended production away from the Holland Plant (before it actually started) for both Chevrolet Volt and Focus Electric – which lead to becoming the subject of a government probe on the wasting of DoE money to build those cells..

Shortly after the DoE report was released, we assume LG figured that the mounting bad press and pressure from the government to start building batteries with the money they were loaned, meant it was now probably a good time to turn the plant back on, to supply at least GM out of the gate with all its domestic battery needs.

…and there is also that persistent rumor (despite their denials) that Ford will unveil a long range EV of its own this fall at the LA Auto Show or in January at the NAIAS in Detroit, for delivery in 2017.

Another strong candidate would be Fiat-Chrysler, as tooling for its extended range Town & Country van is currently underway nearby at Chrysler’s Windsor (Canada) Assembly Plant.  Currently Samsung SDI supplies cells for the company’s all-electric Fiat 500e, but relations between LG Chem and Chrysler have reportedly grown much closer of late.

Detroit News, MLive, Hat tip to MTN_Ranger!

Categories: Battery Tech, Cadillac, Chevrolet, Ford, General

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44 Comments on "LG Chem Adds 4th Battery Plant Line In Michigan, But For Whom?"

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Cavaron

If LG delivers the batteries, the electronics and the motor – I wonder how much it would take them to produce their own EVs.

Robb Stark

GM owned Frigidaire from 1919 to 1979.

LG has some experience bending metal from its appliance division.

arne-nl

“….some experience bending metal…”

LOL, after all what more do you need building a car?

Robb Stark

Thinks one sentence is a comprehensive list of LG’s capabilities and an exhaustive list of required automotive competencies. 🙂

super390

Nobody builds a car by themselves. There are huge auto-parts suppliers out there that could build an entire car between them if they were paid enough. When GM & Chrysler faced bankruptcy, the other carmakers expressed fear that if that happened, it would also bankrupt the key parts makers that they themselves needed to continue their own operations.

Taser54

There is significant cost involved in engineering the chassis and suspension. I’m not sure that LG wants to invest the Billions to get into that. It will stick to its core competency.

As it is, GM spreads the cost of that engineering across hundreds of thousands of vehicles. That’s why you see major automakers going to vehicle platforms for each class of cars. It’s not badge engineering, but it doesn’t reinvent the wheel for each car either.

SJC

Intel built processors, but not PCs. You don’t tick off your customers.

mo

Building a factory, getting equipment and training and hiring workers will cost 1 or 2 billion.

Alan

A Japanese maker ?

“But for who?”

For the future, of course. The actual future, that is:

http://insideevs.com/self-drifting-electric-delorean-donuts-track-video/

not the fake future

http://insideevs.com/toyota-mirai-back-future/

Bill Howland

Who knows for sure how good any car will sell?

If the economy is still in reasonable shape, the Bolt should sell quite well, and with an EPA range of 203 miles, will require alot of batteries.

If the economy falls through the basement, then of course, all bets are off. But barring that, some of this ‘spare battery manufacturing capacity’ surely will be exploited to satisfy the Bolt’s and others battery requirements.

Ontario Leaf

For VW of course 🙂
VW now plans to give all their diesel customers a plug in hybrid system that fits in the space they saved by not installing the urea after treatment 😉

ClarksonCote

Jay, I think you meant 37 miles ELECTRIC range for the CT6, rather than extended range… Otherwise it will not please many people! 😀

Great write up! I’m surprised the Bolt batteries are not going to be produced domestically, unlike every other GM plugin. Do you have any insight into the reasoning there?

Gamer

They got GM and Ford already.
And they need only one maker to get US big 3.
Guess who?

David Murray

Well, the Focus Electric could certainly benefit from LG’s newer chemistry. Its biggest weakness right now is its pathetic range. It’s range of 76 miles was already significantly less than the Leaf and now the Leaf is about to jump way ahead of it. I bet with these second-generation cells they could probably get the focus up nearer to 100 miles, which would help a lot.

Also their PHEV line could benefit too. If they could boost them by 25% as well, that would give them 25 miles of range, a significant improvement.

super390

The Focus Electric is a compliance car, and probably not a long-term project that would require a new production line. It was never going to be gotten to perform very well because it was a non-EV platform. Now if Ford is designing new platforms to be dual-use, like a new Escort, that might be useful. The current Escort is based on the Mazda 2, the only car for sale in the US that I consider light enough to be a useful EV conversion though it’s not designed with that intent.

kubel

It’s not entirely compliance, since it is sold outside of CARB states. It’s a PR car. “See, we can make one too”. But they realize the big money is still trucks right now, and they are doing a pretty good job making dough where they need to.

It is both a compliance car and a PR car.

The compliance part is not optional; they do sell in California and other carb ZEV states, therefore it is intended for compliance. However, they also would like to brag about their federal government loans that they got in lieu of bankruptcy cash that GM ad Chrysler got.

jim stack

The FORDs also have one of the best battery system designs. My 2013 FORD FOCUS EV has not lost any capacity after 3 HOT Phoenix summers and over 20K miles. It’s an amazing battery system.
They could use a better Air Cond system like the super efficient Heat pump in our 15 KIA SOUL EV. And FOR Still doesn’t have a Fast Charge Port =D——

Where is Chrysler getting its cells for their hybrid minivan that is supposed to be coming out?

pjwood1

I thought the build up to this van featured MPGe numbers around 70-80, and nobody had yet indicated it would be a PHEV of any material battery size. Some of us concluded no range number, because battery would be small enough not to be able to generate an appreciable AER value.

Of course, I hope I’m wrong.

Gamer

From a plant in MI?

M Hovis

So many “chicken or the egg” issues for new technologies. EVs are no exception. The need for charging infrastructure, and yes, large scale battery manufacturing have added to the many adoption curve issues.

It was only four years ago that LG could barely support the one Michigan based plant, and now they are on the cusp of expansion. As Bill Howland said above, only a crashed economy will stop this momentum and that is pretty impressive amongst some of the cheapest gas prices in history. IMO, even a crashed economy can only slow the adoption. With everything remaining equal, the ramp up from 2017-2020 should show the EV future come of age. A slowed economy would certainly have an adverse effect but also consider factors on the other end of the spectrum. I recently read a report calling for oil at $130/barrel in 2017. I can’t really see that happening, but just imagine if that happened in line with the release of the Chevy Bolt and Tesla Model III….

pjwood1

Mark, There is also interesting news in stationary storage, where oil prices are almost meaningless. Moody’s had a report dismissing solar PV-battery systems, and just published another this month about utility peak-shaving economies having already been achieved. It was a surprising shift, as far as I can tell. They now maintain solar-battery systems will be years behind the “500KW” systems the demand side could be seeking. They modeled $600-700/kwh costs, in high demand charge environments, such as CA, NY, NJ.

The important point is that batteries are seeing more, and more, economic “thrust” without high gas prices. If LG hadn’t had such strength in automotive, I’d believe they might be setting up for supplying stationary. Possible?

DonC

This is very interesting. Thinking it’s an automaker with a plant in Detroit makes sense and Ford is the obvious choice. But it might even be a number of manufacturers, including Nissan. Ghosn has said Nissan might use a different supplier for the next generation Leaf and Renault already uses LG Chem cells. It’s possible that Nissan determined that its own cells would not allow it to compete well with the Bolt, causing it to go with the LG Chem cells. Pure speculation but the time frames seem about right.

evnow

I think it is not Nissan, even though earlier I was thinking it was. Mainly because the volume would be too small. How many batteries can a line produce in a year ?

Taser54

WRT to the 4th line in the plant. I think many are not seeing the elephant in the room: Commercial electric delivery vehicle applications.

That’s a far larger untapped market than fighting for EV car market share (where consumers are not convinced yet of EVs value vs ICE).

GeorgeS

@Taser

or maybe grid storage.

GSP

Grid Storage. That could be the best guess so far.

I wonder if any of the grid storage projects that have been announced using LGChem are scheduled for when this new production line starts next year?

GSP

Pushmi-Pullyu

GeorgeS said:

“or maybe grid storage.”

That was my first thought, too. We EV advocates tend to think of li-ion battery production in terms of supplying EVs, but the entire market is much bigger. And if early signs are any indication, grid storage is going to be a market which will expand the demand for kWh of li-ion batteries much faster than the market for supplying EVs is expanding.

One thing seems pretty clear: The list of companies lining up to buy LG Chem’s new, cheaper li-ion batteries is getting longer pretty rapidly, so whatever capacity they add will almost certainly find customers.

Both Ford and Chrysler need to get going on BEVs (or get left behind).

kubel

Yeah, but Ford and Chrysler will have $7500 tax credits while GM and Nissan will have used theirs up on early models.

I don’t doubt Ford will be bringing a 150+ mile BEV to the scene shortly.

bro1999

Semi related, since we are talking about LG Chem:

I found an article in Korean that has some direct quotes from LG Chem officials about GMs pricing “leak” (luckily I know Korean!) http://m.biz.chosun.com/svc/article.html?contid=2015100503405.

The word they used to describe GM’s disclosure literally means “perplexed / confused”…not “ticked off”, though you can use it in the same manner. They also quote a researcher saying the $145 price point is 1/2 to 1/3 the price thst other manufacturers are paying! Not just $100 less. LG Corp wants to become a player in the automotive supplier market, so was willing to sell the battery cells to GM at low margins.

Would be groundbreaking if all electric versions of mustang, camero, charger, and corvette were released.

GeorgeS

I disagree.

This is the same marketing mistake GM always makes. They introduce a hybrid version of one of their gas cars and tack on a hefty charge for it….fails every time. GM can’t sell hybrids. They couldn’t even sell their BAS mild hybrid.

Since people don’t “get” hybrids they just opt for the gas version. The most glaring example is the Silverado truck Hybrid….a brilliant piece of engineering killed by lousy marketing and wayyy to high of a price.

They need a dedicated line, not a Malibu hybrid or an Impala hybrid.

Same problem with the Volt. A brilliant power train stuck in a compact car (Cruze) with no room in it.

The only way GM could sell a hybrid is to make it standard equipment with no tacked on fee…..and to price it reasonably.

Phr3d

contrariwise, with Tesla, supercars and to a smaller extent BMW having done the heavy-lifting, Mr. & Mrs. Average Are coming around to the ‘go-fast’ abilities of Electricity.

So, following on BMW’s CO2-mobiles, you offer a car with Acceptable AER, but market as a Performance car, then let people -find out- that they don’t need to use much, if any, gas to get groceries. The Price premium will be all about the ‘go-fast’..

Now could GM’s Marketing do that.. yeah, mebbe not..

CBonville

Perhaps the new production is for VIA Motors, a close associate of GM.

I think it could be Nissan.

Nissan knows the LEAF 2.0 has to come up with at least 150-200 miles of AER or they are going to get smoked by the Bolt and Model 3. They have talked about partnering with LG Chem in the past if their own battery efforts couldn’t keep up.

Nissan, Ford and VW are the only car companies I can think of to support a new volume battery line producing in Michigan early next year.

Pushmi-Pullyu

A recent InsideEVs article quoted a Nissan spokesman as saying Leafs assembled at their Tennessee plant will be supplied with batteries made in the same place. And Leafs made in Japan will be supplied with batteries made in Japan.

No word yet on where the Leafs made in the UK will get their batteries.

Maybe, they will continues to assemble the packs near the vehicles from cells sourced from LG Chem.