LG Chem's lithium-ion batteries, which power the Chevrolet Volt — and soon, the Ford Focus Electric, among other future electric vehicles - will be in greater demand due to rising energy costs, more stringent government fuel regulations.
LG Chem Power Inc., Troy
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LG Chem’s lithium-ion batteries, which power the Chevrolet Volt — and soon, the Ford Focus Electric, among other future electric vehicles — will be in greater demand due to rising energy costs, more stringent government fuel regulations, and growing consumer acceptance. Prabhakar Patil, CEO of LG Chem, says lithium-ion battery use in vehicles will outpace consumer electronics by 2020.
Electric-powered vehicles have been slow to take off, even with hefty public subsidies, and yet you’re projecting significant growth?
The OEM segment is going to grow steadily. The Obama administration has mandated that Corporate Average Fuel Economy (CAFE) be 54 miles per gallon by 2025, and you can’t meet that (requirement) with conventional technology. You will see demand for battery packs that power smaller cars grow, especially as gas prices rise. We see a lot of growth in foreign markets, as well. We also are working on stationary lithium-ion products for the utility industry, as solar panels and wind turbines don’t generate power on a consistent basis.
When will the electric vehicle market be mature enough to grow without subsidies?
My internal target is to cut the cost of lithium-ion cells by a factor of two in the next five to 10 years. When that happens, you won’t need subsidies. That’s why the subsidies that are offered today will sunset in the next few years. The subsidies were necessary because the market needed a kick-start. It’s like the chicken and egg thing. Something had to give, so you bring in subsidies — and then faze them out as the market grows.
You have a plant opening in Holland, (Mich.). How will that complement the research and engineering center in Troy?
Right now, we supply the electronics and cells from Korea, and GM takes those components and creates modules and the power packs for the Volt. They do that at their plant in Brownstown Township, before shipping the packs to their Hamtramck plant for final assembly. As Holland comes online (by the end of 2013), we’ll produce the cells there and ship them to Brownstown (for GM), and for Ford, to the Michigan Assembly Plant in Wayne. The electronics will continue to come from Korea. We’ll also supply Eaton Corp. with power packs for their commercial truck division in Galesburg (near Battle Creek). Plus, we’ll develop and design lithium-ion packs in Troy, produce them in Korea, and ship them to Volvo in Sweden. We have more than 100 people in Troy, mostly engineers. And when Holland is at capacity, we’ll have close to 400 people working there.
LG Chem could have located anywhere in North America. Why choose metro Detroit and Michigan? What are the drawbacks?
Because lithium-ion batteries are so complicated, it would have been impossible to get the Volt up and running from Korea. Their engineers were in our facility, and we had engineers in their facility. In Michigan, you have access to engineers and other technical people. There’s a very strong work ethic. We also have collaborations with the University of Michigan and Wayne State University, which have very strong engineering programs. There are no drawbacks for us. The state is determined to make itself a center of excellence for lithium-ion batteries, and we’re part of the team.
A pure electric vehicle has a range of around 100 miles, making a trip from Detroit to Chicago impractical. When will range and recharging improve?
Performance will improve as we continue to develop the market and introduce advances. It’s a process. Right now, you’re seeing a host of hybrid vehicles, including regenerative systems that capture electricity when you apply the brakes ... keep in mind the target market for electric vehicles is urban centers. Things will improve as the technology evolves. Lithium-ion will be the dominant technology of choice for electric vehicles, given it takes as much as seven years to develop, test, validate, and introduce a brand-new propulsion system.
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