The race for car lithium battery is on

While car manufacturers worldwide are planning their green makeovers (shifting production to more sustainable cars), battery producers and developers are racing to get investment loans from both private and public funding to answer the expected surge in demand for lithium ion batteries.

Experts contend that battery production problems could limit the growth of the electric car industry with lithium ion batteries currently expensive and supply still limited. According to this Dec. 15 Wall Street Journal article (thanks to Rockwood Holdings for supplying some of the articles!), current lithium ion batteries cost about $1,000 per kilowatt hour of capacity, adding $4,000 to $16,000 to the cost of a plug-in car capable of using both gasoline and electricity. The article says the car industry will need 10x-100x the manufacturing capacity that laptops need for electric cars to become a reality.

Several firms have already recently announced joint ventures and investments in lithium ion battery production. In Germany, chemical company Evonik and Daimler establish strategic alliance for the development and production of lithium-ion batteries. Battery-manufacturer Johnson Controls Inc., Milwaukee, is partnering with French-based Saft Groupe SA to build a lithium ion battery plant in France.The fifty-fifty joint venture SB LiMotive Co. Ltd. of Bosch and Samsung SDI has started its operations on September 1, 2008 in South Korea, with the objective to develop, manufacture, and sell lithium-ion batteries for automotive applications.In Japan, GS Yuasa Corporation and Honda Motor Co., Ltd. established a joint venture company which will manufacture, sell and conduct R&D for high-performance lithium-ion batteries for applications with a central focus on hybrid vehicles.

Also in Japan, Automotive Energy Supply Corp. (AESC), a joint venture between Nissan Motor and the NEC Corp., is preparing to start mass-producing li-ion batteries for cars this spring, according to Nikkei report. Nissan and NEC plan to invest more than 100 billion yen in and after 2011 to mass-produce the batteries. They aim to boost AESC’s annual production capacity in 2010 by 400% from about 13,000 units in 2009, and plan to begin turning out Li-ion batteries in the U.S. and Europe by 2010.

In the US, Ener1, Inc. says it has applied for $480 million in low-interest loans under a new federal program to double manufacturing its capacity to produce 600,000 hybrid electric vehicle packs per year at its existing plant by 2011, and to build a second larger plant capable of producing battery packs for up to 1.2 million hybrid electric vehicles by 2015. The company’s subsidiary, EnerDel manufactures automotive lithium ion battery in Indianapolis and Noblesville, Indiana.

Just today, battery developer A123Systems says that is also asking the US Dept. of Energy for a $1.84bn loan to support its plan of a world-class lithium ion battery manufacturing facilities in the US, starting with a new plant in southeast Michigan. If approved, the Mass.-based company expects to supply battery systems for five million hybrid vehicles or half a million plug-in electric vehicles per year by 2013.

An article from the National Post reported that 14 US technology companies have joined forces to boost production output of lithium ion batteries in the US in order to be more competitive against Asian competition.

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