A123 Systems has announced plans to build a manufacturing plan in southeast Michigan that could supply advanced lithium-ion battery packs for vehicles such as the 2011 Chevrolet Volt and all of Chrysler’s ENVI vehicles.
A $1.8 billion federal loan package will be used to help finance the construction of the facility. Michigan has already announced $335 million in incentives for battery makers to build production facilities in the state, and A123 Systems has secured $10 million of that for the project. The plant could employ up to 14,000 Michiganders.
The news of A123 Systems’ plans to build the facility comes as a bit of a shock. Rival battery supplier LG Chem, of Korea, was widely believed to be the supplier of the Volt’s battery pack, but the government loan package for GM could be a strong incentive for GM and Chrysler to choose a local battery supplier. It would certainly be difficult to explain why the American automakers decided to choose a Korean supplier for one of the most important parts of an electric vehicle when there is a viable alternative located in the same state as the domestic automakers’ headquarters.