By on January 6, 2011

GM and its Korean battery partner LG Chem have signed licensing agreements with the Department of Energy’s Argonne National Laboratory, giving the two firms access to Argonne’s proprietary lithium and manganese-rich metal oxide mix for use in lithium battery cell cathodes. The material will need “several years of testing” according to The General, but could extend battery life, increase charging voltages and storage, and make Li-ion cells safer. Energy Secretary Stephen Chu says GM’s agreement with the publicly-funded lab

gives General Motors the ability to use cutting-edge battery technology throughout its supply chain. The licensing of this technology will also spur the renewal of the American battery industry, creating hundreds of new jobs where they are needed most.

But that’s not quite the whole story. According to press releases, GM’s deal with Argonne allows the automaker to

to use Argonne’s patented composite cathode material to make advanced lithium-ion batteries

But LG Chem’s agreement allows the Korean firm

to make and use Argonne’s patented cathode material technology in lithium-ion battery cells

In short, a publicly-funded lab has licensed technology in a way that appears to deepen the (partially) government-owned automaker’s dependence on a foreign firm. Confused? So is the mainstream media. And so, to some extent, are we.

Though the mainstream media reports (not to mention Secretary Chu) seem to treat LG Chem as an afterthought in this deal (if they mention the Korean connection at all), the artist formerly known as Lucky GoldStar Chemical is the glue that holds everything together. The Korean chemical giant currently ships Lithium-ion cells (the actual “batteries”) from Korea to Michigan, where GM then uses them to assemble battery packs (in which multiple cells are linked together and managed) for the Chevy Volt. In 2012, LG Chem’s wholly-owned US subsidiary (known as Compact Power, but referred to in the Argonne pressers as “LG Chem Michigan, Inc”) will open a Li-ion cell manufacturing plant on Holland, Michigan which will eventually manufacture cells using Argonne’s technology for the second-generation Chevy Volt.

Those cells will be assembled into battery packs by GM, which is apparently why The General had to sign a licensing agreement to use Argonne’s technology. Of course GM will be testing and evaluating those cells in cooperation with LG, but otherwise, The General’s main role in this announcement appears to be to give a patriotic sheen to a move that cements its dependence on its Korean partner.

After all, without a GM deal to announce, it would be tough for Secretary Chu to tout “the renewal of the American battery industry” by licensing a publicly-funded technology to a Korean company. After all, if LG Chem’s Michigan plant makes it part of the “American battery industry,” wouldn’t every foreign automaker with a US production facility count as “the American auto industry”? Clearly, the Detroit talking points about how it doesn’t matter that transplants hire Americans because “profits don’t stay here” are going to need some recalibration.

And Chu wasn’t the only person hyping this licensing arrangement to gloss over some inconvenient realities. Jeff Chamberlain, who heads Argonne’s Energy Storage Initiative, had this to say:

It is especially gratifying to know that the commercialization of this Argonne-cathode is helping the development of an emerging U.S. battery manufacturing industry, as well as the creation of new American jobs.

The goal of Argonne’s battery research is to support the U.S. automobile industry… The added benefits of this endeavor are the potential creation of U.S.-based green jobs, lessening U.S. dependence on foreign sources of oil and a reduction in greenhouse gas emissions.

American jobs? Sure. The American battery “assembly” industry? OK. But as far as American “manufacturing” and “independence” goes, this deal appears to fall way short. Instead of fostering a true “American battery industry,” this deal merely ensconces a Korean firm at the base of a supply chain that, according to Chu (as well as GM, the Argonne lab and all EV proponents), will supply the future of the automotive industry. It’s one thing for local governments to incentivize the production of transplant manufacturing plants, but it’s quite another for the federal government to do so under the guise of helping an automaker it partially owns.

But this isn’t the first time LG Chem has received assistance from the US government to make Detroit dependent on its cells. After all, its “transplant” factory in Holland, MI is being built using $151m in recovery act funds. Nor is GM the only US-based automaker to slouch towards dependence on the Korean firm: Ford will be using LG Chem battery packs in its forthcoming Ford Focus EV. Where GM simply relies on LG for the basic components of battery packs, Ford will rely on the Koreans for the whole assembly as well as the cells that make it up (but then, Ford’s Focus EV is heavily foreign-firm-dependent in other ways as well).

In fairness, no American firm offers the kind of Li-ion cells needed for automotive applications… which is a problem we’d hope a publicly-funded institution like Argonne (not to mention Recovery Act dollars) would be focused on addressing. For all the support the Obama Administration has given the EV sector, it’s more than a bit galling that none of it has been focused on addressing America’s shortcomings at the base of the EV supply chain. No amount of red-white-and-blue- or green-washing can cover for the fact that any future American EVs will now be dependent on a foreign firm.

Alternatively, America could make its peace with the fact that it’s trading one malignant foreign addiction (Oil) for a more benign but no less foreign dependence. After all, Foreign  auto firms hired thousands of Americans over the last several decades to build the cars that Detroit wouldn’t or couldn’t. But if that were to happen, all the bailout-era rhetoric drawing a distinction between the “American” auto industry and the “foreign” transplants would be revealed as the thinly-disguised protectionism it really was. And this announcement would not be used as evidence of the strength of “American” battery and auto industries.

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15 Comments on “Your Tax Dollars At Work… On Korean Battery Dependence...”


  • avatar
    jkk6

    Why at the age of only 25 being Korean American, do i think that America is starting get their interest(government that is). We can shop in other places why not China, Japan, Taiwan even maybe, or…….
    are we looking to get a good deal for fostering that country sixty years ago.
    There are so many sides to a story.
    And come to think of it, the Bolivia deal that let S. Korea secure half the world’s deposit of Li four months ago, was no coincidence. It could be the master plan to reviving our countries assets, good news as a matter of fact. win win.

  • avatar
    HoldenSSVSE

    Nice spin.  But lets face it, it doesn’t matter if the batteries are made on the moon, the United States has almost no mineable lithium beyond the Hectorite clay deposits in California, and I’m not aware of effective sea water processing (lots of the stuff in sea water).
    But in the, “pass the tinfoil hats around because here comes the government conspiracy,” department, there is a lot of mineable Lithium deposits, in Afghanistan.  The Department of Defense says they rival some of the world’s largest deposits.  Hmmmmmmmm…nah.
    So who has Lithium for those batteries?  Well, Chile, Argentina, Bolivia, Australia, and our buddies — the Chinese.
    Dependency because of a questionable government deal?  We’re trading dependency on foreign oil for foreign lithium; it’s all just a big screw job – I’ll keep burning dead dinosaurs.

    • 0 avatar
      PeteMoran

      Australia is happy to sell the USofA lithium. Chile and Argentina too.
       
      The best part? You can recycle it indefinitely, so keep those lithium batteries ready for collection. You know about recycling, yes? That other green conspiracy.

    • 0 avatar

      OK, so lithium is the base of the supply chain… but Li-ion cells are where the real value seems to be added. If the battery is the most costly part of a given EV, it’s not because raw lithium is especially expensive or assembling cells into battery packs is especially complex… it’s all about the cells. And where will the real innovations in the EV sector happen? In cell chemistry. This isn’t a question of a new resource dependency per se, but a know-how dependency… Argonne can innovate but we still need a transplant factory to turn the innovation into actual batteries.
      Again, I’m not fundamentally opposed to the idea of a Korean firm dominating the most crucial part of the EV supply chain (especially if the undisclosed licensing fees are meaningful)… let’s just not fool ourselves into thinking that this deal will put America in the driver seat in the EV game. But then, transplants have been taking over the American auto market for decades… so why should it be different with EV cells?
      You know, besides the fact that the government is actively stimulating the production and consumption of EVs.

    • 0 avatar
      HoldenSSVSE

      @PeteMoran

      The best part? You can recycle it indefinitely, so keep those lithium batteries ready for collection. You know about recycling, yes? That other green conspiracy.

      So we are magically not going to need to mine anymore Lithium, with Toyota planning to have the Prius as the top selling line of vehicles in America within the next 20 years, and all of them on Lithium batteries (seems doubtful something cheaper/better will be widely used – but could be wrong) where is all that Lithium going to come from?  If we’re going to shift to an electric car economy recycling existing lithium isn’t going to do it – it is going to take a lot of mining, and Australia’s deposits are no where near as large as those in far more unstable locations like Bolivia and Afghanistan.

      You know about recycling, yes? That other green conspiracy.

      Yes, I get recycling.  We’re probably at “peak lead” right now, and the barriers ecologically, politically, and regulatory to opening up a new lead mine to expand capacity is gigantic, not just here, but in most parts of the world.  So we have lead recycling, and a lot gets recycled.

      I don’t even get this little almost dig at the end?  I was recyling 15 years ago when I lived in Houston when it wasn’t very vogue and in Houston, decidedly uncool.  I get recylcing.  However I look at electronics recycling, where a lot of this stuff ends up in shipping containers going to third world Hell holes where unprotected workers are slowly dying from the recycling process.  That lead recycling, Africa is a leading location for recycling lead out of used car batteries for the world and the cities, towns, and villages where it happens have a horrid legacy of lead poisoning, birth defects, and a generation of children hopelessly damaged from execessive exposure.  I am horrified to learn that if there is no buyer for the bulk recycled plastics, or glass, or paper, or metals that I put in my bin diligently, the sorted materials end up in a landfill anyway.

      I don’t think there is a “green conspriacy,” but I’m not going to sit here and fully lie to myself that because I recycle like a maniac, even taking my batteries to the hazard waste collection site in the county, that all of the materials I give to recycle are going to have a happy ending in a new life, and are going to be recycled in a responsible and safe way by a company that abides by international regulations on pety ideas like basic worker safety and not poisoning the people living around the operation.

      What I do find as a big load of crap is this idea that electric cars will magically end our dependency on foreign oil.  Never mind that the largest importer of oil is our friends the Canadians (since you liked to point out that our friends the Aussies can provide our Lithium).  We’re just trading one chemical dependency for another.

      If we wanted to be energy independent a conversion to natural gas would be relatively inexpensive, easy to do to many vehicles in the existing fleet and most importantly, a vast distribution network already exists – you would only have to build to the last mile; and consumers could even have refilling stations at their own homes.  We have plenty of the stuff right here and the entire conversion with tax incentives could be done in under 10 years.  THAT would be a real plan to buy us more time to develop VIABLE longterm electrical technologies not dependent on heavy metals that sit mostly in countries that are unstable, our economic competitors, or an occupied enemy.

  • avatar
    PeteMoran

    Foreign investment in the USofA is good news. Distortion between States via bribes to setup these ventures is pretty bad news, however. The multinationals pump it for every penny.
     
    Other than that, every day of delay to a greater electric car future is millions and millions of daily dollars exported in oil.

  • avatar
    shaker

    Having a partner like LG Chem will get the technology started with less government expenditure – the tech obtained from Argonne is going to have a relatively short half-life; I’m sure that they’re holding a better hand for future USA battery production – we’re just not ready yet.
    I see it as a step in the right direction – you can only develop so many iPods (to be made in China), this is real, useful tech that will (hopefully) pay dividends for the future – goevernment money well spent in my opinion.

    • 0 avatar
      mcs

      Actually, the government will be getting some of its money back in the form of licensing fees from LG. I’m assuming this technology will ultimately be used worldwide in applications beyond the auto industry. So in theory,  if  a Chinese consumer buys an LG laptop battery or an iPod with the licensed technology, we could see  a portion of that money going to US government coffers in the form of royalties.  A transaction between two foreign countries, but we still get a slice of the pie. Those sorts of transactions never seem to get reported in the foreign trade statistics.

  • avatar
    DC Bruce

    C’mon, let’s face it: the whole concept of an economic “fortress America” is an outdated myth that should be dumped on the same trash heap that is stacked high with 4-barrel carburetors and other relics of immediate post WW2 America.
    If, as MCS says, Argonne is getting licensing fees for this technology, then its all good, no matter who the licensee is.  And I have a hard time getting too upset with “recovery funds” being invested in US plants with non-US co-investors.
    What does trouble me is using tax dollars (and/or government mandates) to support the sale of imported EVs (viz. the Nissan Leaf) and hybrids, various imported wind turbines and/or their components.  I would suggest that there be no such direct subsidies at all.  If these things don’t make sense in the marketplace, then they shouldn’t exist . . . period.
    The proper role for government, it seems to me, is to assume large R&D risks that the private sector is unable to carry.  That is, the government funds basic research . . .  and licenses the technology that results, if it’s useful.  In recent years, the space program and the military are terrific examples of how that works successfully — most notably the Internet, which is a military-funded (DARPA) invention.  The other analog to that was Bell Labs, back in the days when the Bell System, was a government-sanctioned communications monopoly.
    But the government paying people to buy EVs or hybrids makes no sense to me and starts us down the road of creating huge systemic inefficiencies that will have massive future social costs.

  • avatar
    Steven02

    If this gets us further away from dependence on foreign oil, I am all for it.  I would rather be in bed with South Korea than Iraq, Iran, Saudi Arabia, Kuwait, Venezuela etc etc.
     
    But this is some serious anti GM washing here.  You finally get to the fact that there are no US firms that currently can make the cells today.  The research facility sounds like it is run by the gov’t and the University of Chicago.  Do you expect them to turn a key and start producing batteries?
     
    Also, it sounds like they have made a composite material that will help with batteries, but it doesn’t mention anything about cells, which Argonne might have to pay licensing fees or design their own cells would could take years.  And again, since Argonne is a lab, I am guessing that someone else would really be better suited for this.

    • 0 avatar

      If this gets us further away from dependence on foreign oil, I am all for it.  I would rather be in bed with South Korea than Iraq, Iran, Saudi Arabia, Kuwait, Venezuela etc etc.
      Ditto. My point is simply that we shouldn’t be pretending that this positions the US as a key element of the EV industry. There’s nothing “anti GM” about this position. My vitriol here is for the folks who spent 2008-09 bashing transplants and calling for a “national energy policy” and “national manufacturing policy” to go along with the bailout.
      The Argonne announcement simply proves that government spending won’t stop the market from picking non-US winners in a given industry… which is precisely why the auto bailout should not have happened.

    • 0 avatar
      charly

      Are you sure that the Koreans love America. It is not really the vibe i get.

  • avatar
    Daanii2

    The sad fact of the matter, for us in the US at least, is that we lost the lead in advanced batteries years ago. To Japan, China and Korea. Not in technology, where we still have some good stuff. But in bringing that technology to market.
     
    I don’t know why our vaunted venture capital system has failed to produce good battery companies. Altairnano, Valence, A123 have all seemed to glitter with promise. But the sparkles have all been just fool’s gold.
     
    When companies like Tesla and GM are touted as having “battery technology,” when all they have done is designed a battery pack containing someone else’s batteries, you know that we have reached a sad state.
     
    What’s the solution? I don’t know. But I’m pretty sure that it is not to throw more money at the battery industry. It doesn’t take much analysis of the recent past in the industry to see that you might as well just throw the money down a black hole.
     
    Money is not the answer.

  • avatar

    Well, this article is a bit one sided.  There are examples where American companies are benefiting from Korean battery technology like Johnson Controls buying Delkor, Dow’s partnership with Kokam and Ener1′s ownership of several Korean lithium battery technologies for use in trucks and buses.  
    So… this Edward person either has an agenda, or he should dig a little more deeper into the Korean/American battery relationship.  I’m sure he’ll find that it’s more balanced than he thinks it is.

  • avatar
    PeteMoran

    @ HoldenSSVSE
     
    Thanks for your reply. Yes, I was having a dig at you for your “I’ll keep burning dead dinosaurs” sign-off. Worrying prematurely about “peak lithium” while a non-renewable resource (oil) goes out the tail-pipe is not equivalent.


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