Volt Birth Watch 125: GM To Spend $30m On Volt Battery Plant

Edward Niedermeyer
by Edward Niedermeyer
volt birth watch 125 gm to spend 30m on volt battery plant

GM will invest $30m in the Michigan LG Chem/Compact Power battery plant which will assemble lithium-ion cells for its Chevy Volt. Of course the actual cells are made in Korea, a fact which make the Volt’s many taxpayer subsidies less than exclusively patriotic affairs. But fear not, American taxpayer! Korean subsidies make your subsidies go farther! GM’s Bob Lutz reveals to MLive that one of the reasons GM picked the Koreans over homegrown A123 Systems was because “LG Chem has massive support from the Korean government in terms of a whole research campus was paid for by the Korean government because Korea recognizes that advanced battery technology is a key component of the country’s competitiveness.” Hint, hint. Since LG Chem is farther along with prismatic (flat) cells, we’ll all just have to live with the fact that our tax money is flowing through GM to foreign firms, although to be fair, A123 did its cell manufacturing in China. So much for “supporting domestic industry.” Anyway, in his announcement of the $30m investment, GM’s Ed Peper tells Reuters to forget any CadiVolt dreams. “We chose Chevy because we can’t be niche with the Volt,” explains Peper. “We have to make it a mass-production vehicle.” A $40k “People’s Car” which depends on foreign technology, and will lose money even with “government support” coming from all sides? Niche? Never.

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  • Ronnie Schreiber Ronnie Schreiber on Jan 21, 2009

    tesla deathwatcher, Wasn't Firefly funded by their parent company Caterpillar?

  • Tesla deathwatcher Tesla deathwatcher on Jan 21, 2009

    Yes, the technology was spun out of Caterpillar with the original people. But Firefly finished a Series C funding round last year with funding from Quercus Trust, Khosla Ventures, and Infield Capital. BAE Systems, Husqvarna, KB Partners, the Illinois Finance Authority, and the Tri-County Venture Capital Fund also invested in earlier rounds with Caterpillar. Your question makes the good point that the startup environment in the US is not limited just to venture firms. Many companies also support startups with money and strategic partnerships. A123 has seen the same thing, with GE being a big investor. I have oversimplified this issue. Of course foreign companies do have some advantages. The business environment in China, for example, is very unusual, offering advantages to battery companies along with disadvantages. China is still at heart a centrally planned, communist country after all. That can be a help to companies that enjoy government support. Many pollute with impunity, for example. Still, I have to speak up when people talk about how great the government support is for Asian companies. I still remember back in 1980 when books like Japan As Number One, Trading Places, and MITI and the Japanese Miracle were all the rage. Looking back now, all that was laughable. Things are tough all over. Especially the battery business. It's brutal. Just ask Sanyo.

  • HeBeGB HeBeGB on Jan 21, 2009

    Thanks tesla deathwatcher...the pleasure of this site is still that we occasionally get someone to comment that has enough real knowledge to compare against people that just have real opinions.

  • SCE to AUX SCE to AUX on Jan 21, 2009

    OK, so if GM has minimized the cost of the cells by producing them overseas (US manufacture of them being impossible, anyway), and everyone knows that the cells are a primary cost driver for the vehicle, then how will they produce and sell the Volt profitably at a $40k price point? Such a price will only attract Chevy groupies and tree-huggers, but not serious car buyers who want to maximize their buying power. Alternately, GM will recognize this reality and force the US government to subsidize the vehicle through rebates and other taxpayer-funded measures. I've already read about a $5k government rebate, but that won't be enough to motivate buyers, and I'm not in favor of such measures because I pay for them. This then becomes nothing more than an extension of the bailout plan. How about producing a car (any car) that the taxpayers don't have to subsidize?