Panel: Michigan set to provide about 20% of carmakers' battery market

Posted on June 30, 2011

Michigan is poised to make about 20 percent of the world’s lithium ion batteries for autos, as the market for battery-powered hybrid and electric cars expands to a projected 1.7 million vehicles by 2015, according to a panel of experts at the Detroit Economic Club Wednesday.

Already, General Motors Co. plans to add 1,000 engineers and technicians to its electric vehicle efforts, while battery maker A123 Systems of Livonia and Ann Arbor has already hired 2,000 people in Michigan and expects to hire a couple thousand more in the next few years, leaders from both companies told the club.

The panel included David Vieau, CEO of battery-maker A123 Systems; Micky Bly, executive director of global electrical systems for GM.; and Dan Galves, a vice president and auto industry analyst with Deutsche Bank; and was moderated by Mark Phelan, a newspaper auto reviewer.

The market for advanced lithium ion batteries for vehicles to power an increasing number of electric or electrified cars should bring jobs to Michigan, according to the panelists — and not just making batteries.

“We think that this industry could grow from basically $0 last year to a $14 million industry in 2015,” Galves said.

The cost of shipping the 500-pound batteries means that carmakers will want to locate their manufacturing plants near battery plants, he added.

“Look at the Chevy Volt. The batteries are produced in Michigan, and the Volt is produced in Michigan,” Galves said. “The more capacity for these batteries, the more market share Michigan will take for these vehicles.”

While electrified cars, such as the plug-in Volt with its gas engine to extend its range, and pure electric cars, such as the Nissan Leaf, take hardly any market share now, the segment is expected to grow, Bly said.

That includes GM’s move to expand its single Volt model into a new line of extended-range electric cars.

“We see it as a mainstream technology going forward,” Bly said. “It’s not a niche market, especially in the U.S.,” he told the meeting. “It’s a car that anybody can certainly drive.”

Vieau, of A123 Systems, noted that there will soon be 36 different automakers around the world making 116 different models of vehicles with some kind of electric powertrain, up from just five carmakers a few years ago.

But the biggest boon to the United States, Vieau said, was the potential in reclaiming hundreds of millions of dollars the country now sends abroad through the purchase of foreign oil.

“We’re spending $500 billion a year making sure we get foreign oil,” Vieau said.

“We have an opportunity to convert those dollars into American jobs. This is a start — 1,000 jobs, 2,000 jobs — but it’s nothing compared to the size of the opportunity that we have in front of us.”

By Brian J. O’Conner, Detroit News