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Battery breakthrough sought for electric cars

Lowering the cost of electric vehicles will require a less-costly battery, officials say.

(Photo: Mandi Wright, Detroit Free Press)
Story Highlights

Several battery plants failed because of slack demand
Sales of hybrids, electric vehicles expected to remain low
Automakers, startups invest in battery research

DETROIT — Big investments in lithium-ion battery manufacturing plants won’t significantly reduce the cost of making batteries, a revised outlook that cautions that sustainable growth in electric vehicle sales will happen later rather than sooner.

For General Motors, that means the $40,000 Chevrolet Volt, a plug-in electric vehicle powered by a 435-pound lithium-ion battery pack, could stay expensive for years.

It also may limit the commercial potential of Tesla Motors, which sells luxury electric vehicles ranging from about $60,000 to more than $110,000.

Nissan cut the price of its Leaf S in January from $35,200 to $28,800, before tax credits. For the first two months of this year, Leaf sales rose 13%, but only to 1,303.

Through the first two months of this year, however, alternative powertrain vehicles did not do badly. Sales of gas-electric, non-rechargeable hybrids rose 29% to 74,784. Sales of plug-in hybrids and all-electrics more than tripled to 10,081, according to

Still much higher volumes are needed to bring down the cost faster.

Jon Lauckner, GM chief technology officer and president of the company’s start-up investment operation, said in a recent interview that a breakthrough is required to reduce the cost of making battery packs.

“There are some advantages to cost that will accrue due to scale,” said Lauckner, who oversees GM’s research-and-development arm. “But the big steps are going to be the technology. It’s moving from the current generation of technology into the Gen 2 — and into the generation beyond that.”

Kevin See, analyst for Boston-based Lux Research, said it’s “not realistic or feasible” for automakers to significantly cut the price of lithium-ion batteries.

“There’s going to be incremental improvement,” See said. “But we don’t believe it will be enough to spur the huge adjustment everyone was hoping for.”

The consumer electronics industry, he said, has already made most of the advancements that are possible in lithium-ion batteries, which also power devices such as cellphones and laptop computers. The next frontier may come in technologies such as lithium-air and lithium-sulfur batteries.

Moving too fast

In Michigan, several battery plants have failed largely because they ramped up way ahead of demand.

A123 Systems filed for bankruptcy in October, and its factories in Livonia and Romulus were sold to a Chinese auto supplier, Wanxiang Group. The company received state tax incentives and collected $132 million from a U.S. Department of Energy grant before the funds were cut off.

Federal investigators revealed earlier this year that Korean battery maker LG Chem’s plant in Holland was idle, while employees watched movies, played video games and helped local charitable groups. The company reimbursed the government for those expenses, but it also spent about $142 million of its $150 million U.S. grant.

Dow Kokam’s battery plant in Midland requested extensions on its tax credits because of sluggish demand for its products. Dow received a $161-million federal grant.


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