LG Chem exec welcomes Tesla's giant battery factory

Jun 16, 2015

Tesla plans to follow its luxury sports car the Model S, pictured here, with a more affordable mass market vehicle, the Model 3.
Credit Mark Brush / Michigan Radio

Updated:  10:23 am 6-17-15

Tesla's foray into advanced battery manufacturing in the U.S. is apparently no threat to advanced battery manufacturer LG Chem of Korea.

Tesla, with the help of partner Panasonic, is building a massive lithium-ion battery manufacturing plant in Nevada.

Prabhakar Patil, LG Chem's head of its North American operations, says the entire industry owes a debt to Tesla for single-handedly changing the image of electric cars.

"Before they were really considered slugs," he said at the annual ITEC conference in Dearborn. 

Now, thanks to Tesla's luxury sports car the Model S, Patil says people see that electric cars can be both fast and sexy.

Patil doesn't seem worried about the potential competition from the Tesla facility.

He says the advanced lithium-ion battery industry needs "critical mass" in order to reduce costs and meet the expected volume increases in the future.

"I think at this point, the more the better, in terms of moving the technology forward, and getting it the visibility," he says.

Patil says the two biggest areas of growth for LG Chem will be batteries for so-called "micro EVs," which use smaller lithium-ion batteries for stop-start technology, and larger batteries for plug-in hybrid vehicles. 

The wild card is pure electric cars like the Chevy Bolt and the Tesla Model 3, which will offer a range of at least 200 miles on a single charge, and will cost in the range of $30,000 to $35,000.

"So what remains to be seen if that becomes a tipping point," says Patil. "Because up to now, electric vehicles have been a regulation-driven product.  But here now they're talking more of a mass market product.  Nobody knows if that will make the perfect value sense for the customer. We don't know the answer for sure, but it looks like it's moving us towards that tipping point."

Patil says the industry's growth likely means future job growth and expansion for LG Chem's factory in Holland, which now employs about 300 people. The factory currently makes batteries for the Chevy Volt, and Patil says more business is on the way, although he did not disclose details.

Correction: an earlier version of this post mistakenly gave the location of Tesla's battery factory as being in California.  The factory is being built in Nevada.