General Motors (s GM) plans to invest $30 million into building a plant for assembling Chevy Volt battery packs, the automaker said today at the Automotive News World Congress in Detroit, Reuters reports. GM revealed earlier this month that it would manufacture the packs in Michigan with lithium-ion cells from South Korea’s LG Chem (s LGCL Y). The facility is just the latest development in a race between A123Systems, which lost the Chevy Volt cells deal, and GM to create a large-scale lithium-ion battery plant in the United States.
Although it will be a significant step for the emerging domestic EV battery industry, GM’s $30 million play for assembly-only (rather than manufacturing cells, too) contrasts with the $1.84 billion battery factory that A123Systems hopes to build in southeastern Michigan with loans from the Department of Energy. The difference highlights an opportunity for economic development that escaped Michigan when GM decided to have the Volt’s lithium-ion cells manufactured overseas (a point lost in many early reports, which hailed the move as a major Michigan win), rather than in its home state — despite up to $335 million in tax incentives for battery development, manufacture, and assembly.
That’s for the time being, at least. Brett Smith, assistant director for manufacturing, engineering and technology at the Center for Automotive Research in Ann Arbor, remains hopeful that cell-making will eventually come stateside. “With pack assembly in Michigan as the first step for G.M.,” he told the New York Times, “hopefully we’ll start to see a lot more activity on the cell manufacturing side as well.”
Of course, GM is hardly in a position to make big, long-term investments like the ones Michigan and A123 (on the federal buck) have planned. The company has said that it may need additional loans to survive an extended slump in demand, and Treasury Department loan requirements mean slowing progress on the Volt (which has already faced factory construction delays) is not an option.