In southwest Michigan, Ford Motor Company is constructing an EV battery manufacturing on a 3-mile stretch of farmland.
Ford will use Chinese company Contemporary Amperex Technologies Co.’s technology to create affordable, reliable batteries for electric vehicles. Ltd., also referred to as CATL is the largest battery manufacturer in the world.
Michigan’s EV Battery Factory Chinese Partnership Highlights Irony for US
The state will receive a $3.5 billion investment in a 2.5 million square foot factory, thousands of new jobs, and the ability to make enough batteries each year to power 400,000 electric vehicles when the plant opens in 2026 thanks to Ford’s agreement with the Chinese behemoth.
The deal might have been made the other way around, which is a devastating irony for the United States for anyone who has been paying attention.
Scientists at the University of Texas at Austin discovered a substance called lithium iron phosphate (LFP) in the middle of the 1990s, and the startup A123 Systems LLC in Watertown, It was popularized in Massachusetts a few years later.
LFP is now the predominant battery chemistry used by CATL and the majority of Chinese battery producers.
The Obama administration gave A123 hundreds of millions of dollars in 2009 in the sincere belief that this would assist jump-start the American auto industry’s manufacture of electric vehicles.
Nevertheless, it was too soon. As there was no market for EVs, gas-saving automobile manufacturers decided against taking a chance on an unproven start-up.
A123 declared bankruptcy in 2012, and since then has served as a parable for governmental waste, sometimes mentioned in the same sentence as Solyndra, a California-based manufacturer of solar panels that declared bankruptcy in 2011 after receiving $500 million in federal loan guarantees.
Even now, when people find that Dave Vieau was the company’s CEO, they still occasionally point the finger at him.
He’s repeatedly been told, “You’re the A123 person who took all the government money.”
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Lessons from A123 Highlight US Missteps in Battery Industry
The United States is feverishly attempting to build its own battery supply chain today, around 30 years after the discovery of LFP, and the creator of the modern assembly line is striving to
China to instruct him on how to manufacture cars for the 21st century.
It is a direct reminder of how America misunderstood what A123 was attempting to teach it. The
The US might have committed to a much longer game rather than letting a potentially game-changing invention or a fledgling firm trying to commercialize that technology, live or perish by the whims of the free market.
And the US could have found out how to foster and defend a newborn industry that was inevitably going to experience trial and error rather than letting a brilliant discovery slide through its fingers and into the hands of what is now its largest economic and geopolitical foe.
A123 is an argument for changing the traditional rules of American capitalism in the age of Chinese competition, as seen with the benefit of hindsight.
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