Our Next Energy Inc., an electric-car battery startup involving several former leaders of
secretive car project, is planning to invest $1.6 billion into a factory in Michigan to make enough battery cells for about 200,000 EVs annually.
The state of Michigan on Wednesday approved a $200 million grant for the project that promises to create 2,112 new jobs once the facility in Van Buren Township, about 10 miles west of the Detroit airport, is fully operational by the end of 2027. The company must create and maintain the jobs or face a clawback of the funds.
The investment is part of an influx of battery capacity being built in the U.S. as companies race to provide car makers with the cells they will need for all of the EVs they are planning. That effort has only intensified following the enactment of the Inflation Reduction Act, which aims to jump-start domestic battery production. The law ties consumer tax credits for buying EVs to how much battery material comes from domestic production.
“The Inflation Reduction Act has literally made [our] phone ring off the hook,” Mujeeb Ijaz, founder and chief executive of the company, known as ONE, said in an interview. “We’re seeing a lot of emphasis on the U.S. supply chain and U.S. cell manufacturing.”
The company said it plans to produce at full capacity 20 gigawatt hours, including lithium iron phosphate cells, annually or the equivalent of battery packs for about 200,000 vehicles each year. ONE hasn’t said which car makers it will be supplying.
The U.S. automotive industry has largely been focused on another type of cell technology—lithium-ion cells—which has a higher energy density but can also be volatile. So-called LFP technology is less volatile and less expensive but typically has less range. LFP has been getting a new look by some auto makers concerned about battery fires, and some who have warmed to the technology as a workaround for some of the raw materials shortages hitting the industry.
ONE aims to make the technology more competitive, claiming its LFP packs for automotive use will have a comparable range to current packs made with cells having cathodes of nickel, cobalt and manganese, but cost 35% less. Production is scheduled to begin in March for delivery-truck use, followed by automotive customers by the end of 2024, Mr. Ijaz said.
The company also aims to create a battery pack with a more than 600-mile range while still slashing costs of the cells that make up the pack by 50%. That unique pack is scheduled for 2026 production and uses two different kinds of cell chemistry. In essence, daily driving would use less expensive LFP technology while the second set of chemistry would include anode-free cells that will power longer-range trips.
The company was founded in 2020 by Mr. Ijaz, whose hiring by Apple in 2014 was one of the first indications of the tech giant’s car ambitions. Mr. Ijaz was a pioneer in the car-battery space, having worked at
Ford Motor Co.
before becoming the founder of the A123’s automotive division developing cells for EVs in 2008.
ONE has already raised $197 million and aims to raise another $150 million by year’s end, according to the company.
venture capital unit was an early investor and in June the auto maker signed a deal to use ONE’s battery technology in a prototype vehicle.
As it has rapidly expanded, the company has attracted former Apple car talent, including
who joined ONE in January as chief technology officer. Former Apple vice president of special projects Steve Zadesky, who was one of the early leaders of the iPhone-maker’s car project, has joined ONE as an adviser.
praised the announcement in a statement: “With this new gigafactory, we will continue bringing the supply chain of electric vehicles, chips, and batteries home to Michigan.”
ONE’s success would be a win for Michigan, long the cradle of the U.S. automotive industry. But its place in the automotive food chain has been threatened by the rise of Silicon Valley companies’ interest in the industry and the expansion of foreign auto makers throughout the Southern states, where unionized labor is more rare.
moved its headquarters to Texas with the construction of a new assembly plant in Austin.
As auto makers aim to build more electric vehicles in coming years, they have been scrambling to lock down supplies of cells, fueling a flurry of battery-factory announcements this year.
South Korean battery maker SK Innovations Co. is building a $2.6 billion battery factory in Georgia to supply Ford and
Panasonic Holdings Corp.
has already said it plans to build a $4 billion EV battery factory in Kansas and, The Wall Street Journal has previously reported, the company is making plans for an additional factory in the U.S. and looking at a location in Oklahoma.
Write to Tim Higgins at [email protected]
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