GM Makes a Deal for Cheaper, Longer-Lasting Electric-Car Batteries

GM Signs Deal with Argonne Lab for Next-Gen Electric Car Battery Technology General Motors (GM) only recently began to ship the Chevy Volt, the company's first plug-in hybrid electric car, but the giant carmaker is already looking ahead for new technologies that might give its future electric cars an edge. Thanks to the U.S. Department of Energy, it has at least one in mind: GM said Thursday it has licensed a technology from a national laboratory that will boost the performance of lithium-ion battery cells that power electric cars.

GM's deal gives it the rights to use a cutting-edge composite material that forms the cathode, one of the three key parts of a battery cell. The technology was developed at the Energy Department's Argonne National Laboratory in Illinois, and it promises to create safer, cheaper batteries with longer operating lives that can also go further between charges, said GM Ventures President Jon Lauckner during a press conference call.

"This license will allow GM to continue to work on next-generation battery systems, to reduce cost and improve the performance of those systems," Lauckner said.

A battery is made up of an anode on one side and cathode on the other, with an electrolyte in between. To produce electricity, chemical reactions prompt ions to move from the anode to the cathode via the electrolyte, which separates the electrons from protons. The cell then harvests the electrons as power. Each car battery pack has multiple cells.

GM describes the new cathode material as "a unique combination of lithium- and manganese-rich mixed-metal oxides in a stable-materials design."

Building High-Tech Batteries in Michigan

GM and officials from the lab and the Energy Department called a press conference to tout the deal as an example of how publicly funded research can improve people's lives. Argonne has a long history of conducting battery research, and it has amassed a broad portfolio of patents in the area. The emergence of the electric-car market puts a new spotlight on these research efforts.

"The development of this material represents an important return on taxpayers' money," said Argonne Director Eric Issacs. "This licensing of technology will help spur and renew the American battery industry and create new jobs."

Some of the jobs will come from a new $303 million battery-cell factory being built in Holland, Mich., by South Korea-based LG Chem, which has licensed the same composite cathode technology. With construction partly funded by a $151.4 million federal grant awarded in 2009, the factory is set to start production next year, said Mohamed Alamgir, research director of LG Chem Power, during the conference call. The company already supplies GM with battery cells to power the Volt, which GM began shipping to dealers last month.

Jump-Starting Electric Cars

The automaker launched a massive marketing campaign for the Volt long before the first one rolled off the assembly line. GM unveiled the car's price tag last July -- about $41,000, with buyers eligible for a $7,500 tax credit. But as the market for electric cars grows, the Energy Department reckons that the boost in manufacturing will cut the costs of batteries -- a significant fraction of the cost of an electric car -- by more than half.

The federal government has spent billions of dollars to jump-start the electric-car market. In 2009, it announced $2.4 billion in grants for a host of car, battery and other auto-parts manufacturers, as well as companies that make and install charging equipment, and researchers at universities and national labs. GM and Ford (F) are among the winners.

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Other car companies competing for a slice of the electric-car market include Nissan (NSANY) and Tesla Motor (TSLA). Nissan has rolled out its all-electric LEAF. Tesla sells an expensive electric sports car, the Tesla Roadster, and plans to start offering its more affordable family sedan, the Model S, in 2012.

On Friday, Ford unveiled the Focus Electric at the Consumer Electronics Show in Las Vegas. The company plans to start selling this all-electric model later this year, but has yet to announce the car's price. The car can go roughly 100 miles per charge, and it will take three to four hours to charge the battery by using a 240-volt charger. With a 120-volt outlet, the charging will take 16 to 20 hours.

The licensing deal for LG Chem covers the U.S. market, and LG Chem can use the technology to make cells for other customers as well. GM's licensing agreement, on the other hand, is worldwide but not exclusive, so Argonne can license the technology to other companies, including GM's competitors. The Ford Focus Electric, for one, will be using battery packs containing cells from LG Chem.

Licensing technical know-how forms the basis for research and development efforts, and those efforts can take years to come to fruition with a commercial product. But LG Chem will be ready to use the composite cathode technology in the U.S. starting next year because it has been working with the same material in Korea, Jeff Chamberlain, manager of Argonne's battery research programs, told reporters. Adding longer-lasting, cheaper zip to electric cars could be key to sparking consumer demand.

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