The car batteries of the future will be made where the automobile was first perfected, right here in Metro Detroit.

State officials have approved tax incentives that will allow General Motors and Ford to develop and build lithium-ion batteries here in Metro Detroit. The two corporate behemoths will invest tens of millions of dollars and create hundreds of jobs thanks to $61.8 million in tax incentives.

Ford received $55 million in tax incentives to advanced battery and electrical vehicle development in Metro Detroit. Think hybrids, plug-in hybrid electric vehicles and battery electric vehicles.

Ford plans to bring four new electric/hybrid vehicles to market by 2012. These include a full battery commercial Transit Connect van-type commercial vehicle in 2010, a full battery electric passenger car by 2011 and plug-in hybrid vehicles by 2012.

GM is considering buildings its lithium ion batteries for the Chevrolet Volt in southeast Michigan. The company would invest about $43 million and create 140 new jobs if and when it makes it happen. GM is still considering other locations, but the state hopes the $6.8 million in tax incentives will convince Mother Motors to stay close to home.

Source: Michigan Economic Development Corporation
Writer: Jon Zemke

We already knew that Daimler was looking in Tesla’s direction for electric vehicle batteries, but we certainly didn’t know that those passing glances were only the beginning of an underground battle for supply chain supremacy. As automakers struggle to move cars from lots, it’s being reported that some — Toyota, Tesla, Daimler and Nissan, in particular — are looking to parts fulfillment for profit. Toyota already has an edge on its rivals by being one of the only companies to actually produce its own batteries, and if demand begins to outstrip supply, other car makers could come running in hopes of stocking up. Of course, you’ve also got Nissan ramping up production in order to equip some 200,000 electric / hybrid vehicles annually over the next few years, so who knows if all this scheming will eventually backfire. Though, if one firm can somehow figure out how to make their battery stronger, more potent, lighter and cheaper — well, we needn’t tell you how that would play out.

In the race to deliver plug-in electric cars, European automakers have an early lead, according to Bob Kanode, the CEO of vehicle battery maker Valence Technology.

Austin, Texas-based Valence has been in the battery business since 1990. It already supplies batteries for the Segway Personal Transporter and is setting its sites on the auto market.

On Tuesday, Valence announced that French electric-bus and truck maker PVI will test Valence’s lithium phosphate batteries for fleet vehicles in a deal worth $3 million.

As Valence seeks customers in the transportation field, Kanode sees Europe as far more mature than the United States

On Wednesday, The Wall Street Journal reported that a U.S. auto battery consortium plans to apply for a $1 billion loan in an effort to better compete against manufacturers in Japan, where there is already an established supply chain for lithium ion batteries for electronics.

Cash-strapped U.S. auto companies are pushing into plug-in electric cars with the first models from General Motors, Chrysler, and Ford, starting in two years. But the overall environment for introducing electric cars is better in Europe, according to Kanode.

“In Europe, the determination is absolute,” he said. “They have had high energy costs our whole lifetime. Second, they want to decrease their reliance on foreign oil…And third, they are absolutely committed to improving their carbon footprint, both the public and the governments.”

He said there are already a number of hybrid electric vehicles coming to market in the form of fleets of buses and delivery trucks.

Both BMW and Mercedes are said to be developing all-electric cars. Last month, Mini unveiled the Electric Mini, which it started testing.

General Motors, with its Chevy Volt, and Fisker Automotive have chosen gas-electric designs to ensure that cars have a longer driving range. Because of battery limitations, an all-electric car priced like a typical family sedan will have a shorter range.

Nissan and Miles Electric, for example, are bringing out all-electric sedans that are expected to have a range of 100 miles and 120 miles, respectively. Rather than as a replacement for a gasoline car, the companies intend to sell them as secondary cars used for daily commuting and errands, according to executives.

Valence’s Kanode expects European automakers to take the same tack with electric passenger cars.

“They are very aggressively going after these markets, and they want them,” he said. “(In the U.S.), the companies aren’t here, the determination isn’t here, and the markets aren’t here…It’s absolutely no comparison.”

He added that the rapid move into electric vehicles has caught the interest of electricity suppliers, which can use batteries to store energy from wind or solar plants, or to provide backup supply.

United Kingdom-based National Grid is purchasing batteries from Valence for testing, he said.