Michigan Awards $400 Million in Tax Credits for Advanced Battery Production
By Greg Johnson April 14, 2009The battery wars heated up again today as Michigan awarded four $100-million tax credit packages to a quartet of advanced battery projects that could lead to the creation of thousands of new jobs in the economically distressed state. One of the $100-million tax credit packages is contingent upon state legislators passing enabling legislation.
The credits awarded by the Michigan Economic Growth Authority are part of the state's bid to build an advanced battery industry that, by 2020, would lead to the creation of 40,000 new jobs.
The Detroit Free Press is reporting that the winners will spend a cumulative $1.7 billion on their proposed projects.
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GM engineers work on a Volt battery pack.
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The winners of $100-million tax credit packages are:
A joint venture between Milwaukee, Wisconsin-based Johnson Controls and French battery manufacturer Saft Advanced Power Solutions. The companies plan to build a plant in Holland, Michigan.
A123 Systems Inc. of Watertown, Massachusetts, which on Monday said it had drawn another $70 million in capital from General Electric, plans to build a plant in Livonia. Last week, A123 announced that it would supply batteries for Chrysler LLC's upcoming line of electric vehicles.
KD Advanced Battery Group, which is a joint venture between Dow Chemical, Kokam America and Townsend Ventures, has yet to say where it would build its planned facility.
Korea's LG Chem-Compact Power, which has a contract to provide batteries for General Motors Corp.'s Volt, was awarded a $100-million tax credit package that is contingent upon additional state legislation being passed.
The tax credit awards come just about a month before battery manufacturers must file their applications for U.S. Dept. of Energy grants to be funded through the federal government's massive economic stimulus legislation. President Obama included the grants in the stimulus package to help make good on his plan to put a million plug-in hybrids on U.S. roads by 2015.
"This incentive program puts us in prime position to help companies in Michigan secure the majority of the $2 billion in federal recovery money that will enable the United States to build an advanced-battery infrastructure in our country," Michigan governor Jennifer Granholm said during an April 10 radio broadcast.
And, on another front in the battery wars, Kentucky on Monday beat out more than a half dozen other states in a competition for a state-of-the-art lithium-ion battery manufacturing facility proposed by the National Alliance for Advanced Transportation Battery Cell Manufacture.
The alliance has announced plans to invest as much as $600 million in the lithium-ion battery plant that would be located in Hardin County, Kentucky. (In making the announcement on Monday, Kentucky Governor Steve Beshear identified the consortium as the National Alliance for Advanced Transportation Batteries, or NAATBatt.)
"This proposal will put Kentucky in a prime position to be the country's leading manufacturer of the clean-energy cars of the future," Beshear said Monday. "Kentucky's strong roots in the automotive industry, as well as its close proximity to suppliers, manufacturers and researchers, make it a natural fit for production of the next generation of hybrid technology batteries."
NAATBatt's plan is contingent upon the alliance winning a share of the $2 billion in federal grant money. The consortium that represents about 50 battery manufacturers, research institutions and associations, wants to build a one-million-square-foot building that would house engineering, quality assurance, headquarters and manufacturing space.
State officials expect the plant to create as many as 2,000 full-time jobs with an average annual wage of more than $40,000.
And, last week, Kentucky announced that the University of Kentucky and Louisville University were teaming up with Argonne National Laboratory to create a national battery research and development center.
Greg Johnson, Contributor
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