Sep 15

Battery supply will be double the demand in just two years

 

As large Asian corporations rush into the burgeoning electrified automotive market, analysts forecast excessive battery supply, and prices dropping to one-third of today’s rates by 2020.

In only the next two years, according to a report yesterday by Bloomberg, companies such as LG Chem and Johnson Controls will be able to double expected demand by automakers.

This was determined by estimating 18 gigawatts needed for 839,000 projected plug-in vehicles built by 2013, and comparing it to a projected available battery capacity of 35 gigawatts.


Inside the Volt is a T-shaped battery pack with cells supplied by LG Chem.

As a result, smaller battery making companies competing today may be forced out of business, Bloomberg said.

“The larger, mainly Asian, conglomerates can cope with limited demand and compete by lowering prices but smaller pure-play battery makers will be left vying for an increasingly limited number of supply contracts,” said Ali Izadi-Najafabadi, an energy technologies analyst at New Energy Finance.

The report said battery prices may also decline to $350 per kilowatt-hour in 2020 from $800 to $1,000 today.

The Asian battery makers likely to dominate in coming years are South Korea’s largest chemicals maker, LG Chem, SK Innovation Co. of Seoul, Tokyo’s Toshiba Corp., and, a joint venture between Samsung Electronics Co. and Robert Bosch GmbH, called SB LiMotive.

American capacity

The U.S. market and auto companies are pushing demand, and Bloomberg said by 2015 domestic capacity could be as high as 40 percent of the world’s total.

This would be a 2-percent rise before certain companies received $2.4 billion in Recovery Act stimulus funds, according to the U.S. Energy Department.

According to New Energy Finance analyst Shu Sun, the fund-receiving company expected to struggle the most is Ener1 Inc. (HEV)’s EnerDel unit.

This company received a grant of $118.5 million for a plant in Indianapolis, but could have its hands full competing against larger companies.

The largest U.S. government grant under the program – $299.2 million – has gone to Johnson Controls for a factory in Holland, Mich. Also A123 Systems (AONE) of Walthham, Mass. received $249.1 million for plant at Romulus and Brownstown in the state.


Some worry that GM will cheapen the Volt’s materials, but its battery could cost one third in just a few years.

Thanks largely to GM’s getting the ball rolling, LG Chem is looking like the kingpin as the shakeout begins.

In April the company said it would spend 2 trillion won ($1.8 billion) by 2013 to expand battery production for electric cars.

Additional credit goes to Nissan Motor Co., which plans to make 500,000 batteries a year by 2015 through its Automotive Energy Supply Corp. venture.

With an eye toward world leadership, Renault-Nissan’s CEO Carlos Ghosn recently revealed that company to date has spent $5.6 billion on electrified vehicles, with more spending to follow.

Bloomberg

This entry was posted on Thursday, September 15th, 2011 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

COMMENTS: 54


  1. 1
    James

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    Sep 15th, 2011 (6:45 am)

    This is the hope for all us EV, PHEV enthusiasts. Let’s hope that American battery assembly and production plants prosper alongside their Asian competition!

    Everyone wins when the economies of scale kick in. The numbers in this story seem a bit optimistic, but at even half of these projections, EV costs will begin to rival their ICE cousins – and at that point, our fears of pack replacement costs will also decline.

    VOLT- IT’S MORE FREEDOM THAN ELECTRIC! ,

    James


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    Nelson

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    Sep 15th, 2011 (8:16 am)

    If GM decides to replace the standard lead acid battery with safer/ lighter A123 lithium ion batteries, it could give A123 the boost it needs to achieve economy of scale sooner. “Make it so number one!” :)

    NPNS!
    Volt#671


  3. 3
    BoultVolt

     

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    Sep 15th, 2011 (8:28 am)

    I agree with James, dropping prices are probably good for all of the EV/PHEV/EREV world. Since I hope to keep my volt for 15-20 years.. a replacement in 8-10 years would be about the right time. By then competition and scaling should have dropped the costs. So much for the pundits’s projections of 8K replacement estimates.

    It would be useful to know where the projections for 839,000 vehicles by 2013 came from. Sounds good, but a bit high.

    Also predicting the demise of US battery companies that are still building plants seems a bit premature when new car launches take so long and that an expected price drop should have been factored in when they were planning on new companies. Also no mention of what deals they have lined up. I recall other posts on A123 suggesting they have lined up deals, including with GM.

    James: Glad to see others picking up on my tag line:

    Volt, its more freedom than electric!


  4. 4
    Loboc

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    Sep 15th, 2011 (8:29 am)

    The US gov’t is getting some heat for grants to failed solar companies. I think grant to some small battery companies will also be money down the drain.

    Hopefully, US battery companies can hold on with the coming voter backlash.


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    kdawg

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    Sep 15th, 2011 (8:44 am)

    Let’s say the batteries come down so much in price that you can buy an EREV for the same price as an equivlent ICE car. I wonder what percentage of people will still not buy the EREV because you have to “plug it in”. (you know, all the Nick Cavuto’s out there).


  6. 6
    tom w

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    Sep 15th, 2011 (8:45 am)

    “The report said battery prices may also decline to $350 per kilowatt-hour in 2020 from $800 to $1,000 today.”

    I thought they were already at $500 per KWh?
    The TMS adds a significant cost but I thought the Volt battery for 16KWh with TMS was already under 10K.

    It would be nice to have good estimate on what the Volts Battery+TMS costs, any guesses?


  7. 7
    Raymondjram

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    Sep 15th, 2011 (9:19 am)

    tom w:
    It would be nice to have good estimate on what the Volts Battery+TMS costs, any guesses?

    If you already have your Chevy Volt, ask the dealer on how much would it cost for a battery replacement. That will be the real world cost for the Volt battery (plus labor), unless you buy it outright as a “spare”, so deduct the replacement labor cost.

    Raymond


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    Anthony

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    Sep 15th, 2011 (9:29 am)

    The problem with a surplus of asian suppliers is transit. I remember GM talking about having to deal with special climate controlled containers and other issues that added to the cost of the battery pack to get it from Korea to the US, maybe adding $100/kWh to the price of the pack. Once those are made domestically, the transport costs drop dramatically. The key to the first drop in the Volt’s price is having the battery made here in the US!


  9. 9
    tom w

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    Sep 15th, 2011 (9:37 am)

    Raymondjram: If you already have your Chevy Volt, ask the dealer on how much would it cost for a battery replacement. That will be the real world cost for the Volt battery (plus labor), unless you buy it outright as a “spare”, so deduct the replacement labor cost.

    Thats a thought, but I don’t think what they would charge me to replace it would be GM’s Actual cost for each Pack. Thats certainly closely held info, and I’m not interested in what a pack cost in 2011, but in January 2012 when they are producing 5,000 per month, what is the GM cost for each pack at that time.

    Is it 8,000 – 10,000 – 12,000?

    GM is ramping up production and they have no competition. Could they sell the car for less than $40k in 2012 IF THEY HAD to? With the $7500 rebate and no competition they don’t have to sell for less than $40k. But in 2012 they are actually planning some decent volume so I wonder what GM’s Cost out the door for the car and the battery pack in 2012 is?

    I wonder if we can tell what LG Chem charges GM for the cells in 2012. GM is giving them quite a lot of long term business, LG Chem may be setting costs now based on future projected costs to get GM’s business?


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    Shawn Marshall

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    Sep 15th, 2011 (9:42 am)

    At 1/2 the cost and twice the range EVs like the Volt could do well in the market, even Cavuto might take favorable notice.
    Still need more energy density per pound of battery.
    (X)EVs have a ways to go.


  11. 11
    George S. Bower

     

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    Sep 15th, 2011 (10:55 am)

    Article quote:
    “The largest U.S. government grant under the program – $299.2 million – has gone to Johnson Controls for a factory in Holland, Mich.”

    Jeff,
    Is this the GM plant??? I thought GM was just using LG and A123. What are these Johnson controls batteries destined for??


  12. 12
    George S. Bower

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    Sep 15th, 2011 (11:00 am)

    I think all of you that are looking for a big drop in the Volt’s price are in wishfull thinking land. If the cost of the pack drops 5K$ Gm will keep the gain as profit margin NOT lower the price.

    Maybe when Gen2 comes around they can drop it a little.


  13. 13
    Noel Park

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    Sep 15th, 2011 (11:27 am)

    The potential for this to lower oil imports and reduce the balance of payments deficit truly makes my mouth water. It’s all good! Go Volt!


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    Loboc

     

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    Sep 15th, 2011 (11:40 am)

    tom w: Thats certainly closely held info

    There should be a parts price in GM’s replacement parts area. Not all batteries (like for a wrecked vehicle) will fall under warranty.

    That would be good to know.


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    LauraM

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    Sep 15th, 2011 (11:56 am)

    Loboc: The US gov’t is getting some heat for grants to failed solar companies. I think grant to some small battery companies will also be money down the drain.

    Meanwhile, we lost the solar energy industry to China because our companies couldn’t compete with the Chinese companies due to all the subsidies they got from Beijing.

    http://www.nytimes.com/2011/09/02/business/global/us-solar-company-bankruptcies-a-boon-for-china.html?scp=1&sq=solar%20industry%20china&st=cse

    If we can’t be competitive with our subsidies, or stop the flood of imports, we’re going to lose one industry after another. Until we have nothing left. We can already see where that’s left us..


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    pjkPA

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    Sep 15th, 2011 (12:17 pm)

    Loboc: Thanks largely to GM’s getting the ball rolling,

    That’s worth repeating!

    And don’t think for one minute that LG and all other asian companies are not getting Billions from thier government!

    I would like to know what a Volt costs in Korea.


  17. 17
    Jeff Cobb

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    Sep 15th, 2011 (12:18 pm)

    George S. Bower: Jeff,
    Is this the GM plant??? I thought GM was just using LG and A123. What are these Johnson controls batteries destined for??

    They are for hybrid trucks at this point, not related to the LG Chem plant.


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    George S. Bower

     

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    Sep 15th, 2011 (1:11 pm)

    Jeff Cobb: They are for hybrid trucks at this point, not related to the LG Chem plant.

    Whose Hybrid trucks??


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    kdawg

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    Sep 15th, 2011 (1:13 pm)

    George S. Bower: I think all of you that are looking for a big drop in the Volt’s price are in wishfull thinking land. If the cost of the pack drops 5K$ Gm will keep the gain as profit margin NOT lower the price.
    Maybe when Gen2 comes around they can drop it a little.

    Depends if there’s competition or not. That’s why a lot of us are rooting for EREV’s from companies like Ford/Honda/etc.


  20. 20
    George S. Bower

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    Sep 15th, 2011 (1:14 pm)

    Anthony:
    The problem with a surplus of asian suppliers is transit. The key to the first drop in the Volt’s price is having the battery made here in the US!

    Good point Anthony.
    When GM gets their Michigan battery plant going will they actually be making the individual cells hear in the US??


  21. 21
    Loboc

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    Sep 15th, 2011 (1:22 pm)

    LauraM: Meanwhile, we lost the solar energy industry to China because our companies couldn’t compete with the Chinese companies due to all the subsidies they got from Beijing.

    conservative rant on:

    I’m not talking about subsidies, which are important, I’m talking about the government interfering with normal business by forcing grants into a ‘green’ jobs companies that didn’t exist without the grant and don’t have the business sense to stay in business.

    My thinking is, and there are a lot of voters out here that agree with me, that some of these grants are just going down a black hole and we won’t get a single sustainable job or product out of the deal.

    Some of the more conservative among us think that *any* government subsidy/grant is intervention where government doesn’t belong, but, I’m not that radical.

    Yeah, we need to look at alternative energy production, but, we don’t need to force it short term where it makes no sense economically. We have hundreds of years to get it done since we have hundreds of years of coal and NG right in our own backyard.

    And yes, I am in the camp that is not convinced that AGW is real. Go ahead, neg me for it, but there are a lot of us out here and you’ll need something better than faked lab results and theories to make it real for us.

    And another thing. Let the Chinese do some basic research for once rather than stealing ours. The only reason their solar industry exists is because of US research in the field.

    rant off:


  22. 22
    tom w

     

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    Sep 15th, 2011 (1:23 pm)

    LauraM: If we can’t be competitive with our subsidies, or stop the flood of imports, we’re going to lose one industry after another. Until we have nothing left. We can already see where that’s left us..

    My plan to solve ALL OUR problems is very simple. Make the American worker more cost competitive and then the only jobs sent overseas will be the ones where we can’t find workers to do the work.

    Reduce the cost of American workers 40% and it doesn’t cost a penny (though it would cost companies cheap labor, but the point is as a country we need to use our workers first, then go overseas for the cheap labor). Remember the savings in cheap labor is more than offset when it comes at the cost of unemployment, where instead of workers paying taxes they are demanded unemployment, food stamps, subsidized college education for kids, on and on.
    1) Take 7.65% matching payroll tax and replace (just estimating) with a 2%-3% tax on corporate gross Revenue to dump into social security/medicare bucket. Make the tax on gross revenue at what it would take to equal the current 7.65% for those currently employed
    2) Get rid of the health care from employer benefits (so remove the tax free status of employer provided health care). All Americans get an FSA that they can use to pay health care costs. Only CITIZENS get the medical FSA purchasing card they can use to buy insurance or pay for health costs or just let the benefits accrue. 2% national sales tax used to evenly distribute to everyone’s FSA card. Citizens can also put up to 10k pre-tax of their own money into their FSA. FSA can be used to purchase on demand or any insurance plan.

    Just like that, Social justice, everyone can at least afford bare bones health care.
    American companies hire more American workers who will pay more taxes than overseas workers.

    The above plans pretty much solve all our economic and social justice problems without spending a penny. Of course we could clean up a bunch more wasted money. But the next most important thing it to domestically produce all our own energy and that means Nuclear, Wind power and EREV/BEVs with CNG Trucks and replace home heating oil furnaces to boot.


  23. 23
    Jackson

     

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    Sep 15th, 2011 (1:27 pm)

    George S. Bower: I think all of you that are looking for a big drop in the Volt’s price are in wishfull thinking land. If the cost of the pack drops 5K$ Gm will keep the gain as profit margin NOT lower the price.

    kdawg: Depends if there’s competition or not. That’s why a lot of us are rooting for EREV’s from companies like Ford/Honda/etc.

    Loboc: The US gov’t is getting some heat for grants to failed solar companies. I think grant to some small battery companies will also be money down the drain.

    Hopefully, US battery companies can hold on with the coming voter backlash.

    Competition is not the only factor in GM’s decision concerning future Volt prices. Voter backlash will no doubt be applied with a broad brush: not only against direct economic policies of the government, but also against things which are merely associated (rightly or wrongly) with it. Unfortunately, this includes EVs, especially ones from Government Motors (the way many still think of GM, though probably not anyone here).

    If voter backlash translates into consumer backlash, GM may find that THEY HAVE TO pass on more of the lowered battery costs.

    … is it at least possible-? …


  24. 24
    Larry

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    Sep 15th, 2011 (1:29 pm)

    Electric cars are probably the primary “driver” to lower Lithium battery prices.
    As the price decreases, however, there are many “secondary” uses of batteries that may take up the increased supply: Electric motorcycles, energy storage for Solar and Wind power, and Utility storage of off-peak power (the cost of electricity during peak times can be many times the base rate).


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    Larry

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    Sep 15th, 2011 (1:33 pm)

    Instead of an EV -vs- ICE competition, it seems that the ICE vehicles are increasingly turning into hybrids. This may also work to absorb the increased battery supply.


  26. 26
    CorvetteGuy

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    Sep 15th, 2011 (1:46 pm)

    Just think of the great deals on a ‘used Volt’ in just a few years. Pick up one cheap, drop in a fresher more powerful battery… Woo-Hoo! Gas free driving will be a lot cheaper someday.


  27. 27
    Jackson

     

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    Sep 15th, 2011 (1:52 pm)

    Larry:
    Electric cars are probably the primary “driver” to lower Lithium battery prices.
    As the price decreases, however, there are many “secondary” uses of batteries that may take up the increased supply: Electric motorcycles, energy storage for Solar and Wind power, and Utility storage of off-peak power (the cost of electricity during peak times can be many times the base rate).

    It’s been a long time since there was a discussion on the site concerning the uses of post automobile lithium batteries; we had some articles and threads about this in earlier days: I believe it was EPRI who made a proposal to use these packs for load-leveling (utility storage of off-peak power for later use on-peak). Sandia did a study on the idea:

    http://projectgetready.com/docs/CEFISrelated_sandia_report.pdf

    The fact is, many of these packs should still have some useful life left, though not enough to power an EV. I’m looking forward to the industry which re-purposes these packs and cells for new services and products. Of course, this will have to wait on a continuing supply of used packs; and we’re still consumed with the costs and penetration of new ones …

    And yes, there should be ramifications for new lithium cells for non-EV use. I really like Nelson‘s idea to use Lithium batteries instead of lead-acid for starting conventional ICE cars.


  28. 28
    Jackson

     

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    Sep 15th, 2011 (2:02 pm)

    Jackson: … load-leveling (utility storage of off-peak power for later use on-peak)

    This specific application need not be dependent on used EV batteries, there are a lot of emerging and existing battery technologies not suitable for use in an EV which could also fit the bill:

    http://www.physorg.com/news155569564.html

    http://www.nextenergynews.com/news1/next-energy-news4.14.08a.html

    … and if your local utility won’t apply any of this technology, you may soon be able to yourself:

    http://peswiki.com/index.php/Directory:Ceramatec%27s_Sodium_Sulfur_Battery

    I think perhaps EVs gave large-scale electricity storage sufficient cred to affect decisions and technology development for other chemistries, along with the unique needs of alternative energy production.


  29. 29
    George S. Bower

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    Sep 15th, 2011 (2:21 pm)

    George S. Bower:When GM gets their Michigan battery plant going will they actually be making the individual cells here in the US??

    I looked it up and came across a 2 day old article that says the LG Chem New Holland plant is ahead of schedule and will be up and running in Jan 2013.

    They are making the battery pouches at this plant so there will be energy and $ saved in not having to ship from Korea in climate controlled containers.

    It’s a win win situation.

    http://www.hollandsentinel.com/news/x371952589/LG-Chem-Factory-construction-ahead-of-schedule


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    JeremyK

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    Sep 15th, 2011 (2:32 pm)

    GM is also investing in A123, which is a good strategy. It’s dangerous to let one supplier corner the market.


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    Sep 15th, 2011 (2:33 pm)

    BoultVolt: James: Glad to see others picking up on my tag line:Volt, its more freedom than electric!

    Exactly. GM should use your tagline instead of “It’s More Car Than Electric”!!! In the forums you alluded that it might be a bit corny. No way! The Volt is all about freedom!

    All this action around electrically-driven automobiles. Storms of activity swirling around. But step back and look so far at the next 2-3 years and still – there is no vehicle under $90,000 that does what the Chevy Volt does!

    RECHARGE! ,

    James


  32. 32
    LauraM

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    Sep 15th, 2011 (2:54 pm)

    Loboc: I’m not talking about subsidies, which are important, I’m talking about the government interfering with normal business by forcing grants into a ‘green’ jobs companies that didn’t exist without the grant and don’t have the business sense to stay in business.

    And the difference is? As a practical matter?

    As far as them not existing without the grant, define not existing. If a company would have gone out of business without the grant because it’s the only way they can compete with the Chinese subsidized Chinese companies does that mean the company shouldn’t exist?

    Loboc: And another thing. Let the Chinese do some basic research for once rather than stealing ours. The only reason their solar industry exists is because of US research in the field.

    That sounds great. How do we make that happen? Or, more importantly, IMHO, how do we keep the Chinese companies from using American based technology? It seems to be that they’ve been trying for years. But as long as private companies gobble up Chinese subsidies and temporary access to the Chinese market in exchange for their publicly funded research…

    That said, I don’t blame the Chinese for copying our superior technology. I blame us for the degree to which we let them. Intellectual property theft has been going on forever. And it goes both ways. The British stole the methods of tea manufacturing from China to establish tea production in India. It took centuries for the French and Germans to figure out to how to copy porcelain.

    To some degree copying is inevitable. But that doesn’t mean we shouldn’t do our best to slow it down as much as possible. But that would mean interfering with the “free market”…


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    LauraM

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    Sep 15th, 2011 (2:58 pm)

    Jackson: If voter backlash translates into consumer backlash, GM may find that THEY HAVE TO pass on more of the lowered battery costs.

    If someone doesn’t want to buy a car for political reasons, I doubt a cheaper price will change their minds.


  34. 34
    LauraM

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    Sep 15th, 2011 (3:45 pm)

    tom w: My plan to solve ALL OUR problems is very simple. Make the American worker more cost competitive and then the only jobs sent overseas will be the ones where we can’t find workers to do the work.

    Two points. First of all, increasing corporate taxes increases the price of manufacturing in the US. So that’s not a solution, IMHO. Although I do like the 2% sales tax, and the cut in the payroll tax.

    Second, yes, it would help if we took steps to make American labor more competitive,and I’m absolutely in favor of doing so. And yes, the high price of medical insurance in this country is a huge factor in making American labor less competitive, so it’s a great place to start.

    But nothing is going to make an American worker cost less than Chinese workers (or Thai workers or Vietnamese workers, etc). You cannot live in this country on the average wage in china which is about $300 a month. And I’m just talking food and rent and transportation. Not taxes, or medical costs, etc.

    And, yes, we should employ American workers first. But how do you propose to force companies to do so without government interference?


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    N Riley

     

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    Sep 15th, 2011 (3:58 pm)

    George S. Bower:
    Article quote:
    “The largest U.S. government grant under the program – $299.2 million – has gone to Johnson Controls for a factory in Holland, Mich.”

    Jeff,
    Is this the GM plant??? I thought GM was just using LG and A123. What are these Johnson controls batteries destined for??

    I thought Johnson Controls was tied in with Ford for their batteries, controls and such.


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    N Riley

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    Sep 15th, 2011 (4:07 pm)

    LauraM:And yes, we should employ American workers first.But how do you propose to force companies to do so without government interference?

    While I agree with most of what you said I do think government “interference” in business has led to many of our current problems. Not all. Many can be laid on the businesses themselves and also the American consumer.

    One politician suggested recently to remove taxes on any goods wholly manufactured in the U.S. Seems like that by itself would cause jobs to come back. We can not expect things to change unless government, businesses and consumers do some changing also. Government is the biggest block in the path of recovery. Just the Dodd financial bill is adding 5,000 regulations to financial institutions and all of them have not been written yet. How does a business operate in today’s U.S. environment with such blockages. IMO.

    Lately government does not encourage businesses to add workers. It encourages them NOT to add workers.


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    CorvetteGuy

     

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    Sep 15th, 2011 (4:41 pm)

    OT – The first 2012 Chevy Sonic has just arrived.
    It’s a cool little car.
    Would be twice as neat if it were VOLTEC or All-Electric,
    but that day will come soon enough.


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    George S. Bower

     

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    Sep 15th, 2011 (5:16 pm)

    CorvetteGuy:
    OT – The first 2012 Chevy Sonic has just arrived.
    It’s a cool little car.
    Would be twice as neat if it were VOLTEC or All-Electric,
    but that day will come soon enough.

    I had not payed too much attention to this car so far so I did a little looking into. It’s a pretty nice looking in the sedan at least in the photos. It weighs 400 lb less than the cruze and you can get the Cruze 1.4 turbo and a 6 speed (manual or automatic). It’s supposed to get 40MPG hwy. Pretty nice little car and it got a good review by car and driver.
    http://www.caranddriver.com/reviews/car/11q2/2012_chevrolet_sonic-first_drive_review

    Totally agree CG it would be a nice little electric but I don’t want the Voltec in it….maybe e-assist. Looks like GM may have another hit on their hands.
    Great!


  39. 39
    Jim I

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    Sep 15th, 2011 (5:28 pm)

    There is something else here that needs to be said:

    We need to understand that to get the best built products, made by American workers, you will have to pay a bit more.

    As long as everyone wants to buy the cheapest products at Walmart, then the only way to get those products is to have them made where the wages are the lowest, the materials may not be of the best quality, and where the manufacturing of those products has no regard to protecting the environment.

    The problem is that people want the best product, but at the shoddy product prices.

    You simply can’t have it both ways. The best costs more. Always has, and always will.

    GM could have produced the Volt in China, and had it shipped here. It would have been less expensive. But would it have the same build quality and the same pride of craftsmanship? IMHO, of course not!

    Is the Volt too expensive? If you are comparing it to a KIA RIO, yes. If you compare it to other cars of the same class and propulsion type, I don’t think so, as there really aren’t any cars of this same class or type. Unless you want to compare it to a Fiskar. Then the Volt looks quite inexpensive……………

    This always helps me put things into perspective.

    http://www.youtube.com/watch?v=Zj-vIOMtVY0

    Sorry if this turned into a rant……


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    George S. Bower

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    Sep 15th, 2011 (5:45 pm)

    Jim I:

    Is the Volt too expensive?

    If you compare it to other cars of the same class and propulsion type, I don’t think so, as there really aren’t any cars of this same class or type.

    Good one!!


  41. 41
    DonC

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    Sep 15th, 2011 (6:18 pm)

    Loboc: I’m not talking about subsidies, which are important, I’m talking about the government interfering with normal business by forcing grants into a ‘green’ jobs companies that didn’t exist without the grant and don’t have the business sense to stay in business.
    My thinking is, and there are a lot of voters out here that agree with me, that some of these grants are just going down a black hole and we won’t get a single sustainable job or product out of the deal.

    First point would be that it was a loan not a grant. It’s not like the government doesn’t make loans, which is pretty apparent if you think about the Small Business Administration. This whole thing just strikes me as typical conservative BS. Conservatives LOVE high cost loans that are cycled through featherbedding banks that do NOTHING but skim off the top but HATE lower cost more effective direct lending. The difference is that the bankers recycle the money through campaign contributions. Conservatives may think they occupy the moral high ground when in fact they’re just burying their noses so deep in the trough they can’t see straight.

    Second point is that a subsidy and a loan are the same thing dressed differently. If a subsidy is OK then a loan should be OK. (BTW the industry which gets the biggest subsidies is gaming, which I know is dear to your heart).

    Third point is that the company which went belly up had gotten more than a billion dollars in private funding. Obviously a lot of smart people in private industry made the same mistake. It didn’t work out. That’s what happens sometimes. If you’re making bets on technology then most of them won’t work out. IOW if some of the grants AREN’T going down a black hole then something is seriously wrong. That’s OK because the ones that do pay off do so in such a big way that it makes up for all the losers. This is just Venture Capital or Business Dev 101.


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    Noel Park

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    Sep 15th, 2011 (6:22 pm)

    N Riley: Just the Dodd financial bill is adding 5,000 regulations to financial institutions and all of them have not been written yet. How does a business operate in today’s U.S. environment with such blockages. IMO.

    #36

    God forbid that we should regulate financial institutions after all of the wonderful things they have provided for us over the last several years.


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    Noel Park

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    Sep 15th, 2011 (6:29 pm)

    LauraM: If we can’t be competitive with our subsidies, or stop the flood of imports, we’re going to lose one industry after another. Until we have nothing left. We can already see where that’s left us..

    #15

    Alas, too true. +1

    If we don’t figure this out and vote with our own individual pocketbooks, we are doomed IMHO.

    A lot of people scream about the Japanese government restricting access of US products to their markets. While I’m sure that they do so in many subtle ways, I think that a lot of it is also about the economic awareness of individual Japanese consumers. They realize that they are an “export or die” economy and they just don’t buy imported products.

    Again, if we don’t figure this out, we’re doomed.


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    DonC

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    Sep 15th, 2011 (6:30 pm)

    N Riley: Government is the biggest block in the path of recovery. Just the Dodd financial bill is adding 5,000 regulations to financial institutions and all of them have not been written yet. How does a business operate in today’s U.S. environment with such blockages. IMO.

    Stop drinking the kool-aid. If you got rid of the capital gains tax rate you could eliminate 50,000 regulations and three-quarters of the tax code. How many of these folks who think government regulations are so harmful want to sign on to that? This is NOT about regulations.

    Plus the hand wringing about Dodd-Frank is completely annoying. The fact is that 5000 regulations is the LEAST bankers should put up with after just about wrecking the economy and begging for the two trillion in taxpayer money they got. And the ONLY reason that happened is that we had pin head politicians — all the same clowns who are don’t want Dodd-Frank — who decided that bankers didn’t need to be fettered by Glass–Steagall. Letting bankers do whatever they want is like giving a 16 hear old boy a Ferrari. It’s not going to end well.


  45. 45
    Tom W

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    Sep 15th, 2011 (6:53 pm)

    LauraM: But nothing is going to make an American worker cost less than Chinese workers

    You don’t have to make the American worker cheaper than the average chinese worker or whatever, just close the gap to save the jobs.

    Where I work they try and replace us as much as they can with folks from India, the rule of thumb is 3 Indian Workers to 1 American worker.

    So if an American worker costs 90,000 with benefits (including health care and payroll taxes) and the Indian worker costs 30,000 a year with all his overhead, thats a tough go.

    But if you removed healthcare and the employer’s share of the payroll tax, now the ratio is 2-1, and you start to get to the point where distance, regional instability, time zones, turnover, language barriers etc it just doesn’t make sense to ship that job over there any more.


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    LauraM

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    Sep 15th, 2011 (6:56 pm)

    N Riley: While I agree with most of what you said I do think government “interference” in business has led to many of our current problems. Not all. Many can be laid on the businesses themselves and also the American consumer.

    The corporations are doing what we incentivize them to do. And so far they’re doing pretty well. As are their CEO’s and corporate boards. So why should they change unless the government forces them to.

    As far as the consumer, I think it’s a lot to expect individuals to look beyond their own immediate budgets and needs. The player who makes the difference in other countries is the government. They’re the ones who can do something.

    N Riley: Just the Dodd financial bill is adding 5,000 regulations to financial institutions and all of them have not been written yet. How does a business operate in today’s U.S. environment with such blockages. IMO.

    So we should just let them take whatever risks they want and let the taxpayer be stuck with the downside?

    And, to say that we just shouldn’t bail them out next time is frighteningly unrealistic, IMHO. No one is going to take that chance. And if they did…well, last time that happened was 1931…


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    kdawg

     

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    Sep 15th, 2011 (8:18 pm)

    N Riley: Lately government does not encourage businesses to add workers. It encourages them NOT to add workers.

    Not to get roped into another political debate, but I hear this phrase a lot lately (maybe its the new GOP mantra), and it bothers me. Businesses add jobs if they need them. Plain and simple. What the goverment does is irrelevant. If I have to make 10,000 widgets in 2 months, i’m going to hire workers. If your next angle is to say the businesses need temporary $ to hire these workers, this is where the banks come in, and they are getting 0% loans from the government, so you can’t blame the gov. on that one either. Also, most businesses get $ upfront before projects from their customers. I think the problem is no one is spending money. So when the government tries to spend money (thus resulting in creating jobs), they get boo’ed.

    Why is it that the invisible hand of the free market is supposed to be so wise, and make all the right decisions, but its up to the government to create jobs, or worse “encourage businesses to add jobs”?


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    Sep 15th, 2011 (8:35 pm)

    CorvetteGuy: OT – The first 2012 Chevy Sonic has just arrived.
    It’s a cool little car.
    Would be twice as neat if it were VOLTEC or All-Electric,
    but that day will come soon enough.

    i think its a good competitor for the Mazda 3. Those things keep popping up everywhere.


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    George S. Bower

     

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    Sep 15th, 2011 (9:01 pm)

    The whole issue about whether the Feds should be providing stimulus money is a dead issue.

    The federal government is broke.
    they have no money.
    they borrow 50% of their budget.


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    Loboc

     

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    Sep 15th, 2011 (10:04 pm)

    DonC: our

    A failed loan and a grant to a failed company are tax dollars down the tubes either way.

    The government should not be in the VC business as they cannot assess the risk like real VC folks.


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    WVhybrid

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    Sep 15th, 2011 (11:56 pm)

    Loboc: A failed loan and a grant to a failed company are tax dollars down the tubes either way.

    The government should not be in the VC business as they cannot assess the risk like real VC folks.

    That loan money didn’t go anywhere. It was spent in the US to pay equipment vendors and assembly line workers.

    The shame is that really great American technology and efficient, highly skilled American workers were shut down by lower tech /lower quality products made by cheap labor and much higher Chinese government subsidies.

    Most likely that great American equipment will be picked up at bankruptcy auction at 10 cents on the dollar for export to Asia.


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    Roy_H

     

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    Sep 16th, 2011 (5:13 am)

    George S. Bower: I looked it up and came across a 2 day old article that says the LG Chem New Holland plant is ahead of schedule and will be up and running in Jan 2013.

    They are making the battery pouches at this plant so there will be energy and $ saved in not having to ship from Korea in climate controlled containers.

    It’s a win win situation.

    http://www.hollandsentinel.com/news/x371952589/LG-Chem-Factory-construction-ahead-of-schedule

    Wow, is that ever discouraging. I thought that the Holland plant was supposed to be in production early 2012. So it has taken 2 years just to build an empty building! This is about 4 times longer than normal. What made the progress so slow?

    So don’t expect to see a price reduction in the Volt until 2013.


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    tom w

     

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    Sep 16th, 2011 (8:04 am)

    Roy_H: So don’t expect to see a price reduction in the Volt until 2013

    I think GM would lower price when competition comes in 2012 and if they need to drop the price a bit to maintain 5,000 cars per month. GM knows they need at least that volume to be able to lower prices significantly in the next few years and they will need to keep momentum.


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    Jackson

     

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    Sep 16th, 2011 (6:26 pm)

    LauraM: If someone doesn’t want to buy a car for political reasons, I doubt a cheaper price will change their minds.

    People don’t want to get too far outside of majority opinion in their neighborhoods. If EVs become symbolic of government failure, many will choose to avoid getting keyed and stick with more conventional transportation.