EnerDel Scales Back Battery Plant Plans

Lithium-ion battery maker EnerDel once expected to generate 800 jobs and invest $184 million in an Indiana manufacturing plant — but no more. Although it has not disclosed revised numbers, the company has scaled back its plans for the new facility, according a county official quoted in local media reports this morning.

Reining in the size of the project could mean saying good-bye to some of the $28 million in incentives proposed by local officials. EnerDel’s original plans for the new facility called for both manufacturing and assembly, and the company said last year that it had applied for low-interest federal loans to support the project.

It’s unclear at this point how big the cuts in EnerDel’s investment plans or projections for job creation may be, but the fact that the company is pulling back some of its ambitions at this point illustrates how elusive green jobs can be. That’s often not because of empty or misguided promises, but simply because it’s a long and bumpy road from laying out a best-case scenario plan during the fund raising stage to securing financing, building or retooling a facility, hiring workers (for both the plant construction and longer term manufacturing jobs) and finally firing up a factory.

Currently EnerDel, a subsidiary of Ener1 (s HEV), has two facilities in Indiana (a manufacturing plant in Indianapolis and an assembly plant in Noblesville). IndyStar.com reports today that the company is now seeking approval from Hancock county officials for special-use zoning to set up the new facility in an industrial business park in Mount Comfort. But various Indiana counties have been competing for more than four months to lure the new development and other sites still remain in the running.

At stake for these counties is the economic growth that could be spurred by potentially major federal support for EnerDel’s scheme. In the first week of January 2009, Ener1 announced plans to build a plant that could churn out batteries for up to 1.2 million vehicles by 2015, and also double the capacity at its Indianapolis plant to produce 600,000 battery packs per year by 2011 — if $480 million in government loans come through (Ener1 requested loans under the popular $25 billion Advanced Technology Vehicles Manufacturing program).

Ener1 CEO Charles Gassenheimer told us in an interview last year that the Department of Energy advanced the company’s $480 million loan application to the final evaluation stage around May. Noting that Ener1 is the only battery maker to “stand up a plant on shore,” Gassenheimer said that while he’s not banking on the DOE loans, “I cannot envision a scenario where government is not going to be part of our future.”

But while EnerDel snagged a $118.5 million grant that will go toward work at the Indianapolis plant under a separate DOE program — the green car loan program, through which many startups remain in a waiting game for the government’s shrinking pile of funds. Gassenheimer said in a November earnings call that he expected to announce federal loans “before the end of the year,” but that announcement has not been delivered.

Photo courtesy of EnerDel/Argonne National Laboratory