Battery Companies To Receive Millions in Tax Credits from Michigan

A123Systems announced that it has secured more than US $100 million in refundable tax credits from the state of Michigan and has selected Livonia as one of the sites where it plans to base new production plants.

The refundable tax credits issued by the Michigan Economic Development Corporation (MEDC) will help implement A123’s existing strategy to establish Michigan as the manufacturing hub to meet demand from its growing global automotive customer portfolio, which includes the recently announced Chrysler partnership.

A123Systems first invested in Michigan when it acquired Ann Arbor based T/J Technologies in 2006. The company later expanded operations by establishing an automotive engineering team that is currently located in Novi.

“Today is truly a milestone for A123Systems, the state of Michigan and everyone interested in creating new markets where American innovation creates sustainable job growth in engineering, research and manufacturing,” said David Vieau, A123Systems’ president and chief executive officer. “With the support of the state’s leadership and highly-skilled workforce, we expect that our planned new facilities in Michigan will serve as a global product center, powering a new generation of cleaner, more fuel efficient cars and trucks.”

In addition, the partnership of Johnson Controls-Saft announced that it will build its first U.S. cell manufacturing facility for lithium-ion batteries for hybrid and electric vehicles. The company will use an existing Johnson Controls facility at its site in Holland, Michigan.

The project is estimated to cost US $220 million and Johnson Controls-Saft will receive a combination of tax credits and incentives from the state of Michigan totaling $148.5 million. The company also plans to apply for an advanced battery manufacturing grant through the federal American Recovery and Reinvestment Act in May.

“Battery technology is strategically important to the future of the U.S. automotive industry and the economy at large,” said Alex Molinaroli, president of Power Solutions for Johnson Controls. “Our first U.S. plant will bring jobs to Michigan, and many additional jobs through suppliers and the businesses these employees will support as the clean vehicle market develops. It is a key element of our broader strategy and commitment to the hybrid vehicle industry in North America.”

The partnership opened the world’s first lithium-ion manufacturing facility for hybrid electric vehicles in 2008 in Nersac, France, where it is currently in production for the Mercedes S-Class hybrid, which will be available to consumers later this year.

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