Our Subsequent Power will spend $1.6 billion on a brand new battery cell plant in suburban Detroit and start manufacturing of lithium iron phosphate cells and battery packs in 2024, firm officers mentioned Wednesday.
Often called ONE, the corporate signed a multiyear lease for a newly constructed 659,589-square-foot constructing in Van Buren Township, about 25 miles west of downtown Detroit. It plans to transform the constructing into its first battery cell plant starting in January 2023. Manufacturing is predicted within the second half of 2024, reaching full capability in 2027.
The manufacturing facility, dubbed ONE Circle, could have an annual capability of 20 gigawatt hours, sufficient to construct about 200,000 battery packs annually, ONE mentioned in a information launch. It would make use of about 2,100 individuals.
The funding is the newest battery endeavor unveiled in North America amid automaker efforts to fulfill fast-approaching electrical automobile targets and U.S. authorities makes an attempt to onshore EV battery manufacturing, which stays closely depending on China and different international locations.
ONE, primarily based in Novi, Mich., selected the Van Buren Township location partly due to its entry to sources of iron and lithium within the U.S. and in neighboring Canada, CEO Mujeeb Ijaz mentioned. Firm executives thought-about places in 12 states and one Canadian province, in line with a information launch.
“We predict Michigan is well-positioned to be a hub for uncooked supplies provide,” Ijaz advised Automotive Information. “Supplies are pretty heavy when it comes to transportation price, so something you are able to do to get on rail or water is a good way to consider driving prices down. I feel the Nice Lakes are going to play a component in that.”
The funding is backed by a $200 million grant from the state of Michigan and comes after the passage of the Inflation Discount Act, which included provisions geared toward localizing the EV battery provide chain. The passage of the act has solidified the marketplace for battery manufacturing within the U.S., Ijaz mentioned.
“Because the Inflation Discount Act obtained handed, the acceleration with which we noticed clients making clear, agency choices took root,” he mentioned.
ONE has acquired orders from automakers forward of the Michigan plant’s opening, Ijaz mentioned, although he declined to call them. The corporate has curiosity from passenger automobile makers in supplying them with battery cells, whereas builders of economic heavy vehicles usually tend to flip to ONE for battery packs, he mentioned.
ONE is betting that its lithium iron phosphate (LFP) battery cell chemistry will show to be successful for automakers in search of extra stability within the EV battery provide chain. LFP batteries don’t comprise cobalt, which is essentially sourced from the Democratic Republic of the Congo, or nickel, costs of which skyrocketed within the wake of the Russia-Ukraine struggle.
“I see our future being derived from iron, which is a really ample, low-cost materials and really protected to function,” Ijaz mentioned.
ONE is exhibiting automakers an LFP battery chemistry able to sustaining 350 miles of journey, he mentioned, easing issues the chemistry is unable to offer adequate vary. If the vary is there, LFP is poised to develop into a serious participant within the EV battery market, Ijaz mentioned.
“We predict that is the start of gigafactory bulletins which might be coming that can exhibit that lithium ion phosphate will be capable of take over a giant chunk of the availability chain,” he mentioned. “You possibly can localize this to any area on this planet as a result of iron is such an ample materials.”
ONE plans to announce different factories within the coming years, Ijaz mentioned.
“I feel by the tip of 2027, we’re exhibiting a full capability plant [in Michigan], and we’re transferring onto the following facility at that time,” he mentioned.
ONE mentioned it might start retraining employees for the “high-skilled inexperienced manufacturing jobs” at its Michigan plant beginning in 2024, seeking to “assist transition Michigan’s proficient automotive workforce with emphasis on equitable financial improvement.” It would provide a median annual wage of $67,456.
“We discover the expertise pool right here to be very wealthy throughout the board,” Ijaz mentioned.
That is the second main manufacturing announcement this 12 months for ONE, which was based in 2020. The corporate mentioned in Might that it partnered with Piston Group to have the components provider manufacture battery packs for it. ONE plans to proceed the partnership.
“We nonetheless worth working with them gone the stage of launching this manufacturing facility,” he mentioned.