Michigan Invests in Advanced Battery Manufacture

[FoMoJo]

Is it a good bet?  I think so; presuming that they take a lead in the technology and keep manufacturing costs competitive.  Whether used in any flavour of existing hybrids, or even non-hybrid vehicles, advanced batteries are a certainty of the future; even for non-auto uses.  I can think of no other major advancement that is quite so important in alleviating the dependency on oil as the efficient and effective storage of energy. 

Michigan bets big on batteries

Michigan hopes to become the nation's leader in manufacturing of lithium ion batteries for electric and hybrid cars after awarding $300 million in tax credits Tuesday that are expected to eventually create more than 6,600 jobs.

The credits approved by the Michigan Economic Growth Authority attracted companies from across the country and Korea to be among those developing and manufacturing advanced batteries for vehicles.

Another venture also was approved for tax breaks but lawmakers first have to pass an additional $100 million in credits for the project. The three ventures announced Tuesday got the last of $555 million in cell battery tax credits that easily passed in a bipartisan effort late last year. State Sen. Jason Allen, R-Traverse City, said he has drafted the bill for the fourth venture, between LG Chem of Korea and General Motors Corp.

The projects were rolled out by a jubilant Gov. Jennifer Granholm, who said they'll help Michigan corner $2 billion in federal stimulus money earmarked for advanced battery projects. In front of the Capitol building across the street from where the announcement was made, a half-dozen electric cars and hybrid vehicles were on display, including a Chevy Volt plug-in, Ford Focus hybrid and Chrysler Town and Country hybrid minivan, which the governor took for a spin.

"These are the kinds of jobs that are going to transform Michigan," Granholm said. "We are going from rust to green."

"Michigan intends to lead the nation to energy independence through teaming (automobile manufacturers) with suppliers to mass produce lithium ion batteries, and successor batteries."

Not everyone shared the governor's glee over attracting battery manufacturers.

Russ Harding, chief environmental policy analyst with the Midland-based Mackinac Center for Public Policy, a free market think tank, said lawmakers are putting a lot of money at risk for a technology that might not pan out.

"Lets not take this chance for a new type of energy just because we can get some federal dollars," Harding said. "We heard ethanol was our fuel of the future, and we can see how that worked out -- it's too expensive, we're subsidizing it and it doesn't work.

"I think that's where we're headed with these batteries. Ethanol, here we go again."

Ethanol's popularity has dipped along with gas prices, which average $2 a gallon.

Lithium ion batteries are not produced in the United States. The quantities made overseas are not great enough to supply the growing demand for batteries for U.S.-made vehicles.

The four battery projects would invest $1.7 billion to launch advanced battery manufacturing facilities in Michigan -- one each in Livonia and Holland, with the other two locations to be announced.

? Johnson Controls-Saft Advanced Power Solutions of Milwaukee will partner with Ford Motor Co. to mass-produce lithium ion batteries for plug-in cars in Holland.

? A123Systems of Watertown, Mass., got similar credits to make batteries for Chrysler LLC in Livonia.

? A project by KD Advanced Battery Group -- a partnership of Dow Chemical, Kokam America Inc., and Townsend Venture -- has yet to announce its location.

? Lawmakers have to approve an additional $100 million in battery cell tax credits to fund a fourth project by Compact Power, a partnership between LG Chem of Korea and General Motors Corp. The company expects to get a $100 million battery cell state tax credit over four years, plus another state tax credit valued at $25.2 million over 15 years.

The ventures plan to file applications for federal stimulus money, due by May 19 to the U.S. Department of Energy. Up to eight advanced battery projects will share $2 billion in federal grants to be awarded by mid-July.

Mary Ann Wright, CEO of Johnson Controls-Saft, said the venture will be up and running in 12 months once federal funding is approved. She wouldn't say what would happen if the company isn't approved for federal money. But she said the Michigan tax credit will give the company a decided edge in the application process.

"Certainly it would be a challenge (without the federal funding)," Wright said. "We have the Michigan investment, the customers, the manufacturing know-how and our new site already selected."

David Cole, chairman of the Ann Arbor-based Center for Automotive Research, said the lithium ion battery is a proven technology with promise of reinvigorating Detroit's auto industry.

"This is the real deal. This battery technology works. The real challenge is to get the costs in line so it's competitive," Cole said. "It looks like it's absolutely key to the development of electric vehicles."

[GoCougs]

No, not a good bet. Anytime government action is "key" it is economic failure incarnate. Michigan/government will be in for penny, in for a pound, on this.

[FoMoJo]

No, not a good bet. Anytime government action is "key" it is economic failure incarnate. Michigan/government will be in for penny, in for a pound, on this.

There was a time when private money was available for ventures of this sort.  That seems to be in the past. 

[GoCougs]

There was a time when private money was available for ventures of this sort.  That seems to be in the past. 

Not at all - there is literally billions of private $$ just waiting to be invested - now just as then. The success of this type of investment hinges on one crucial factor - the force of government mandating the use of hybrid vehicles using Li-I batteries. There's never been much private money for that sort of investment.

[Galaxy]

No, not a good bet. Anytime government action is "key" it is economic failure incarnate. Michigan/government will be in for penny, in for a pound, on this.

Your generalising. Again.

Most of the time that is the case but there are exceptions. MP3 was created by a german research institute. Then there is Airbus industry. Not to mention all of the patents that NASA has turned into coin.

However in this case I agree with you. There are already many private sector companies working on battery tech.

[FoMoJo]

Not at all - there is literally billions of private $$ just waiting to be invested - now just as then. The success of this type of investment hinges on one crucial factor - the force of government mandating the use of hybrid vehicles using Li-I batteries. There's never been much private money for that sort of investment.

While there are $ billions waiting on the sidelines, it seems they want guaranteed returns; moreso in the current economical climate.  Those investing private money in the fledgling auto industry, at the turn of the last century, took a risk and often lost.  That venture spirit seems not to exist, anymore, in the private sector.

[FoMoJo]

Your generalising. Again.

Most of the time that is the case but there are exceptions. MP3 was created by a german research institute. Then there is Airbus industry. Not to mention all of the patents that NASA has turned into coin.

However in this case I agree with you. There are already many private sector companies working on battery tech.

There are a number of companies working on the development of battery technology with some producing promising results.  A huge injection of cash may well determine which, and most significantly, where the major breakthroughs will occur.  GM Volts being energized by less than adequate Korean batteries will never be accepted by the American public.  Sooner or later the appropriate battery will be constructed and the Michigan government, along with the feds, rightly or wrongly, seem willing to invest in the hope that American ingenuity is not dead.  Of course that ingenuity, as with the Manhatten project, does not preclude an assembly of the world's most capable experts in that field.

[GoCougs]

Your generalising. Again.

Most of the time that is the case but there are exceptions. MP3 was created by a german research institute. Then there is Airbus industry. Not to mention all of the patents that NASA has turned into coin.

However in this case I agree with you. There are already many private sector companies working on battery tech.

I think it not realistic to conclude that only government can develop technology - the market would have developed any technology if left to its own devices, and probably at far less cost.

[Galaxy]

I think it not realistic to conclude that only government can develop technology - the market would have developed any technology if left to its own devices, and probably at far less cost.

I never said that. Most of the time private industry is far better but especially when it comes to developing fundemental technology government can help out.

[FoMoJo]

I think it not realistic to conclude that only government can develop technology - the market would have developed any technology if left to its own devices, and probably at far less cost.

There are some technologies that require a huge long-term investment with no prospect of immediate return.  Fusion power is an example.  Although, ultimately of significant benefit to whoever can accomplish the result, I doubt whether any private venture would bother with it.  Battery development may not be of equal significance and, while there is ongoing private activity, a large cash infusion of government money will do much to determine who is successful.  I believe that is the key strategy.

[GoCougs]

While there are $ billions waiting on the sidelines, it seems they want guaranteed returns; moreso in the current economical climate.  Those investing private money in the fledgling auto industry, at the turn of the last century, took a risk and often lost.  That venture spirit seems not to exist, anymore, in the private sector.

Exactly - what if the government in five years' time concludes that the x battery technology is superior, and uses force of law, regulation or subsidy to compel its use?

Private investors know this is the moral hazard of government investment - a free jump start looks enticing, but it's unpredictable.

[Galaxy]

Take fusion technology as an example. Currently no private company is willing to spend their own money on it because for the next 20 years or so you will make no money with it. However I do believe research into fusion power can help us in the future, so I support governments spending money on it.

[FoMoJo]

Exactly - what if the government in five years' time concludes that the x battery technology is superior, and uses force of law, regulation or subsidy to compel its use?

Private investors know this is the moral hazard of government investment - a free jump start looks enticing, but it's unpredictable.

Was government investment a factor in determining which software technology was superior?

[NomisR]

While there are $ billions waiting on the sidelines, it seems they want guaranteed returns; moreso in the current economical climate.  Those investing private money in the fledgling auto industry, at the turn of the last century, took a risk and often lost.  That venture spirit seems not to exist, anymore, in the private sector.

Because any profit made from venture capitalists are taxed to hell due to their risk taking.  I'd be hesitant too if I risk my life savings just to have half of what I earn taken away from the gov't.

[NomisR]

But back on track, this type of stuff would never fly in CA due to environmental concerns. 

[FoMoJo]

Because any profit made from venture capitalists are taxed to hell due to their risk taking.  I'd be hesitant too if I risk my life savings just to have half of what I earn taken away from the gov't.

Is that really true?  I don't know your tax structure for returns on investment.  Can you give an (accurate) example?

[FoMoJo]

But back on track, this type of stuff would never fly in CA due to environmental concerns. 

CA seems to be driving the 'green' industry.  They may not want to make it there but they would want to use the product.

[Nethead]

I think it not realistic to conclude that only government can develop technology - the market would have developed any technology if left to its own devices, and probably at far less cost.

GoCougs:  Fundamentally correct, CougsDude--I don't think there was ever government subsidizing of early internal combustion research/development.  World War One may have generated internal combustion investment from governments for use in armaments, but by World War One aircraft like the Fokker Eindecker were pretty damned slick.  Supercharging and fuel injection may both be the result of governmental efforts to improve the power output and altitude performance of internal combustion engines in combat aircraft (speculation on my part, hence the "may").

The modern dilemma is that all the easy stuff has been discovered--additional discoveries will likely require extremely specialized knowledge, highly technical research, and probably large outlays of cash in governmental proportions (where a trillion is merely a thousand billions).  Even knowing that an atomic bomb would work as alleged, it is unlikely that any private enterprise would have undertaken the expense of The Manhattan Project.  Functional fusion is probably as expensive an undertaking today as The Manhattan Project was in the early 'Forties...And unfortunately a 75-MPH-capable rechargeable battery that can propel a medium-sized vehicle for 200 miles before needing recharging might cost as much as a medium-sized downtown commercial building in a medium-sized North American city...

I much prefer highly-fuel-efficient "conventional" engines powering on-board generators that produce the electricity to run the electric motors that propel the vehicles.  These could be gasoline/diesel/methanol/hydrogen/whatever two-stroke/four-stroke/rotary/turboshaft/whatever powerplants that run at a constant RPM that is the peak mileage efficiency for the particular engine used.  The right-foot equivalent of a rheostat controls the amount of current that is supplied by the generators to the electric motors for acceleration and cruising.  Any electricity not used at any given moment could be routed to charge a small supplemental battery pack, if desired. 

But I'm an unappreciated genius born decades ahead of my time, which means the brilliance of these proposals will be the subject of just some of the many biographies about the Nethead here eighty years from now...Arrrggghhh--the tragedy of it all

At least you guys who aren't suffering dementia by then can say "Hey, I used to bullshit with the Nethead online decades ago!  Damn, he was just as cool as he was brilliant!  Nurse, where's my afternoon enema?  And fetch a fresh Depends while you're at it."

[NomisR]

Is that really true?  I don't know your tax structure for returns on investment.  Can you give an (accurate) example?

It depends on the amount earned type of asset and the type of and duration of investment held, but assuming at highest tax bracket for ordinary, you would be taxed effectively at 35% at the Federal Level, and then for CA, you're taxed currently at 10.3 percent for Income tax so about 45% of your income is going into taxes.  And for the amount of risk, I think that's way too high.

[NomisR]

CA seems to be driving the 'green' industry.  They may not want to make it there but they would want to use the product.

CA's trying to be on the forefront of the "green" industry implementing unrealistic expectations hoping the market will adopt it like the zero emissions requirement that they dropped.  And now, they have emissions requirement based on CO2 output trying to bring it down to 1990 levels by 2025 and pushing that to nation wide.  The problem is, with the increased cost, they're really risking driving businesses out of CA along with jobs and population due to their inability to remain competitive with the rest of the nation and the world. 

And with other regulations like water in protection of some crappy fish, we're risking our agricultural industry as well.  In the end, along having the highest taxation rates in the US, if nothing changes, CA will end up being populated by Welfare cases and Government workers with no other private industry in existence if they keep it up.  And no, I didn't vote for any of the assholes that support this shit into office.  Unfortunately with CA filled with so many ignorant assholes, their candidate out numbers the ones I want.

[hotrodalex]

There shouldn't be a complete focus on Li-ion batteries. We should be looking for the best battery technology and not keep a closed mind. Yes, it's the best we have right now, but there's always something new and better out there. I think there should be rewards for making the most efficient battery (as in size versus energy capacity)

[FoMoJo]

There shouldn't be a complete focus on Li-ion batteries. We should be looking for the best battery technology and not keep a closed mind. Yes, it's the best we have right now, but there's always something new and better out there. I think there should be rewards for making the most efficient battery (as in size versus energy capacity)

Quite true.  Charge capacity, weight, size and charge time seem to be significant factors as well as cost.  I believe they are close to developing something usable with Lithium Ion but they shouldn't stop there.

[giant_mtb]

How 'bout those miniature devices that turn methanol into power for your iPod, cell phone, etc.?  Those are pretty neat.

"Methanol has 40 or 60 times the energy efficiency of lithium ion,"

http://www.pcworld.com/article/110120/byebye_batteries.html

[Galaxy]

How 'bout those miniature devices that turn methanol into power for your iPod, cell phone, etc.?  Those are pretty neat.

"Methanol has 40 or 60 times the energy efficiency of lithium ion,"

http://www.pcworld.com/article/110120/byebye_batteries.html

I think fuel cells for consumer electronics are pretty much a dead end. Especially considering the new battery technology we now have available.

[dazzleman]

This could be a good thing but I have some doubts.

As a general rule, I think that doing things based on the availability of federal grants is a big mistake, since the investment is being dictated by political imperatives formed by what we want to believe rather than what's realistic.  If a technology shows real promise, there won't be only government investment money available for it, generally.

In addition, I have doubts about whether this technology really addresses the longer-term energy issues.  Batteries create huge environmental issues, and simply outsource a lot of the pollution from the car itself to a power plant.

Having said that, if this leads to a major breakthrough in energy production, it could be a great coup.  I just don't know how likely that is.  But even if there's demand for these batteries for a time, it's a good idea to set up the manufacturing capacity in the US.  The lack of private investment, though, leads me to question the viability of the venture.

[hounddog]

Jenny Granholm has failed at every turn during her tenure.  Detroit has 23% unemployment and looks to only get much worse.  Many are predicting as much as 50% by this time next year, while the state itself is somewhere around the 10% mark and also is getting worse. 

There is zero money left to invest in this type of baloney feel-good stuff that nobody except for tree huggers really wants, or can afford for that matter.  The only place that this money can possibly have come from is the fuck-America programs Chairman Berry is forcing down our throats, and is just another example of the absolute waste and nonchalant hatred of all real and credible designs to repair our country by his people.

[hounddog]

Your generalising. Again.

Most of the time that is the case but there are exceptions. MP3 was created by a german research institute. Then there is Airbus industry. Not to mention all of the patents that NASA has turned into coin.

However, neither the MP3 nor the Airbus company were greatly supported by OUR government.  I think that is key in this discussion. 

Cougs is right, when OUR government gets involved every special interest group in the world has to have their say.  A great example of this problem is with their own Bradley "troop carrier" and its so sad its laughable transformation into a light tank that is too light to be an effective tank of any sort, and too small inside to actually carry troops as it was intended.