ONE, Gotion plan Detroit EV battery plants

ELECTRIC vehicle battery manufacturers Our Next Energy (ONE) and Gotion have separately outlined plans for new production facilities in Michigan.

 

The proposed locations place the companies within a stone’s throw of North America’s automotive heartland, Detroit, bolstering American car-makers’ efforts to meet fast-approaching US electric vehicles targets while simultaneously meeting government attempts to move EV battery production onshore.

 

ONE will spend $US1.6 billion ($A2.45b) on its new battery cell plant in suburban Detroit where it will manufacture lithium iron phosphate (LFP) cells and battery packs from the second half of 2024.

 

The factory aims to be operating at capacity by 2027 with an annual capacity of 20GWh, or sufficient to produce 200,000 battery packs per annum. ONE said it will employ approximately 2100 people in the venture.

 

Meanwhile Gotion, which is partially owned by the Volkswagen Group, is expected to create as many as 2350 jobs across four new manufacturing plants spanning a combined two million square feet (185,806sqm).

 

ONE said the Michican location was selected not only for its proximity to North American car manufactures but also because of its accessibility to US and Canadian iron and lithium reserves.

 

“We think Michigan is well-positioned to be a hub for raw material supply,” ONE founder and chief executive Mujeeb Ijaz told Automotive News.

 

“Materials are fairly heavy in terms of transportation costs, so anything you can do to get on rail or water is a great way to think about driving costs down – and I think the Great Lakes are going to play a part of that.”

 

ONE’s investment is backed by a $US200 million ($A314.1m) grant from the state of Michigan and comes after the United States government passed the Inflation Reduction Act, which aims to localise the supply chain for EVs and their battery components.

 

“As the Inflation Reduction Act was passed, the acceleration with which we saw customers making clear, firm decisions took root,” said Mr Ijaz.

 

Mr Ijaz said ONE has received orders from US-based car and commercial vehicle manufacturers ahead of the plant’s opening but declined to name the interested parties. He said he believes the company’s LFP battery technology, which contains no cobalt or nickel, will prove very economical for ONE customers.

 

“I see our future being derived from iron, which is a very abundant, low-cost material and (is) very safe to operate,” Mr Ijaz said, reiterating the fact that ONE’s battery technology has been proven to offer a range of up to 350 miles (563km).

 

“We think this is the beginning of gigafactory announcements that are coming that will demonstrate that LFS will be able to take over a big chunk of the supply chain … you can localise this to any region in the world because iron is such an abundant material.

 

“I think by 2027, the plant will be at full capacity, and we’ll be moving onto our next facility at that point,” Mr Ijaz told Automotive News.

 

The news comes the same week that Michigan state officials approved a bundle of similar incentives for EV battery manufacturers, including a $US540 million ($A845.1m) property tax abatement aimed at securing the construction of a $US2.4 billion ($A3.1b) electric vehicle battery plant by Chinese manufacturer Gotion.

 

Gotion’s manufacturing project is said to generate more than $US13 billion ($A20.35b) of personal income and create “spinoff investments and redevelopment opportunities”.

 

“The shift to electrification is truly revolutionary, and investment decisions being made now will have positive or detrimental impacts on regions for decades to come. The importance of securing this investment to both the local and broader state economy cannot be overstated,” said a memo published by the state of Michigan.

 

According to Automotive News, the approval of incentives for a Chinese-based company – long positioned as an adversary in manufacturing and technology – has raised criticism in some circles.

 

But state officials have pointed to job creations as “a win for the community” adding that “tax breaks are crucial to not losing the investment from Gotion, which has chosen other states for past projects”.

 

“The automotive industry is in an accelerated, full-fledged transition to electrified propulsion, the impact of which will be transforming and far-reaching,” the Michigan state government memo continued.

 

“In order to maintain automotive manufacturing relevance, let alone leadership, it is imperative for the State of Michigan to capture as much investment in the research, development, and production of advanced battery technologies as possible.”