LG Chem Starts Battery Cell Production at U.S. Plant

LG Chem Ltd. says it has finally begun commercial production of lithium-ion cells at a $304 million plant it built in Holland, Mich., nearly two years ago.

The South Korean company promised in April to start production this summer after drawing sharp criticism from the U.S. Dept. Energy for the delay. LG Chem used a $151 million DOE grant to help build the facility but said it mothballed the facility because demand for its output failed to materialize.

DOE's Office of Inspector General said in March that LG Chem used $842,000 in funds from the grant to pay plant employees while they watched movies, played video games and did volunteer work in the community.

The facility was built to produce cells for the Chevrolet Volt extended-range hybrid. But when Volt demand faltered, LG Chem instead shipped cells from its factory in Korea for assembly at a GM plant in Brownstown Township, Mich.

The 650,000-sq.-ft. Michigan factory was designed to operate five assembly lines and make enough lithium-ion cells per year to power 200,000 electric vehicles. The company has set up three lines so far. It says it hopes to add the remaining two by September 2015, pending sufficient demand.

LG Chem now expects to begin shipping cells from the U.S. plant to GM in late September or early October.