Gov. Jennifer Granholm and lawmakers hope generous tax incentives will help make Michigan the center of efforts to research and manufacture advanced batteries used in hybrid and electric vehicles.
Legislators say the United States today has no large-scale production plant for the lithium-ion battery, the technology General Motors Corp. expects to power its touted Chevrolet Volt. Most battery technology is being developed in Asia.
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In a statement given by Compact Power’s CEO Prabhakar Patil, the company reassures the general public that it’s lithium-ion batteries are ready for GM’s 40 mile range test, in which the vehicle must run on all electric power.
Compact Power is the Detroit based unit of LG Chem, the South Korean giant, which is in the running to win the bidding for the battery supply contract of the upcoming Chevy Volt.
Patil confirmed GM is going to make a decision on a single battery supplier by the years end. The shares of that company will most likely skyrocket, as GM has already announced it will be losing money on the first generation Volt, therefore financial constraints will play a minor role compared to reliability in the selection process.
GM is on track to release the new Chevy Volt in November 2010.
Patil expects lithium-ion technology batteries to dominate the market for the next 15 to 20 years in the automotive sector.
Compact Power is in talks with other vehicle manufacturers as well to land lucrative contracts in the battery business. Projections for the company look stellar provided they are able to meet stringent supplier requirements and their product performs. Patil pegs the sales projection at $1 billion over the next 10 years, as the hybrid vehicle industry picks up steam.
Tesla Motors recently announced that they are building a $250 million factory in Silicon Valley. This comes amidst announcements that their Model S sedan will cost roughly $60,000 with an annual production output of 15,000 units by the end of 2011.
Tesla, most widely known for it’s green car based on a Lotus, has been getting a lot of positive publicity lately for it’s efforts in building electric vehicles. Endorsed by Governor Arnold Schwarzengger, who happens to own one along with several famous personalities, the new upcoming model is sure to be a hit.
Tesla has just recently rolled out it’s powerplant 1.5, which promises more power, a different transmission to improve both range and speed.
Tesla Motors is a couple of months away from locking up $100 million in private equity financing, as well as $150 million in government funding provided by the U.S. Department of Energy. On top of all this, the state has also offered Tesla significant tax breaks in order to help the company get off the ground. So Tesla has absolutely no reason, why it should not be a serious contender in the full electric game. The company has plenty of money, plenty of talent, recruited from Chrysler and other prestigous automotive related companies and plenty of demand for it’s products.
Other carmakers such as GM with its Chevy Volt and Toyota, will be competing against Tesla, however Tesla seems to have a head start on the game, as it’s already selling it’s Roadster, whereas the competition is still years away.
