Illinois needs batteries to power ahead in electric vehicles | Crain’s Chicago Business

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What Illinois still lacks, however, is the driving force in electric-powered transportation. Despite its progress on other fronts, the state still hasn’t landed an electric vehicle battery plant.

The second Rivian plant could be an opportunity to change that. California-based Rivian plans to build a battery factory alongside the new assembly plant. Rivian has indicated that several states are bidding for the plant, but won’t say if Illinois is among them. State officials also decline to comment.

Illinois should make a strong bid for the plant. Adding a battery plant is crucial to the state’s ambitions in electric vehicles, for a simple reason: That’s where the innovation and money are. Without batteries, Illinois could be a net loser in the EV revolution.

Other states have moved ahead as major automakers seek sites for battery plants. General Motors has announced plans for battery factories in Ohio and Tennessee. Korean battery maker LG is expanding an EV battery plant in Michigan, while Japan’s Panasonic produces batteries for Tesla electric cars in Nevada.

States with battery plants tap into the most lucrative segment of EV production. Battery cell production requires an investment of about $2 billion, compared with $1 billion for assembly plants. Batteries themselves are the most valuable component of electric cars, representing 30 percent of the total cost, according to Bloomberg.

Batteries also are the wellspring of innovation in electric vehicles. Creating batteries capable of storing enough electricity to power cars for hundreds of miles without  blowing up has required major technological breakthroughs. More will be needed as EVs pursue their full commercial potential. Ironically, Argonne National Laboratory in Lemont has been at the forefront of advanced battery research. 

Large-scale production of batteries and continuing development of the technology will spawn high-paid jobs for years to come. Battery factories and affiliated research centers will become talent magnets for highly skilled software engineers and designers, and likely spin off new companies as they push technological boundaries. At the same time, battery plants will employ thousands of production workers.

Attracting battery plants also would give Illinois some protection against the devastating impact of plug-in vehicles on established automotive supply chains. Roughly 40 percent of the money automakers spend with suppliers relates to parts for the internal combustion engine, which electric vehicles will replace.

Entire categories of parts become unnecessary when cars stop burning gasoline. Any component related to the engine, fuel systems, transmission or exhaust system is headed for extinction. Electric vehicles need no pistons, no gas tanks, no alternators, no multispeed transmissions, no mufflers, to name just a few of the parts facing obsolescence. 

Automakers already have cut back investment in internal combustion engines as they shift funds to electric powertrains. They’re moving toward a simpler future where vehicles require far fewer parts.  According to consulting firm PwC, the Chevy Bolt’s electric motor has three moving parts, compared with 113 for a traditional engine. 

Fewer parts means fewer workers. Automakers estimate EV production requires 30 percent less labor.

That’s tough math for an industry that generates about $28 billion in economic output and employs 36,000 in Illinois, according to a 2019 report by the Illinois Manufacturers’ Association. Every component threatened by the decline of the internal combustion engine is a source of revenue for suppliers and jobs for workers.

To offset the inevitable losses as gas guzzlers fade away, Illinois needs to capture the biggest possible share of new opportunities. That means aggressively pursuing battery production.

Time is running short as automakers accelerate their EV timetables. General Motors now plans to stop making internal combustion engines by 2035. Mercedes set a more ambitious target of 2030 to phase out gas-powered vehicles and plans to offer electric versions of all its models by 2025.

The good news is Illinois likely will have multiple chances to win battery plants. Rivian is just one vehicle manufacturer looking to build battery production capacity (and it may be a long-shot for Illinois, if Rivian aims to diversify geographically). For example, Ford plans to have 10 battery plants around the world by the end of the decade. GM recently said it would add two more battery facilities to the pair planned for Ohio and Tennessee.

Illinois should win its share of battery production and then some. We have expertise in cutting-edge battery technology, a skilled workforce, manufacturing know-how, a mid-continent location and transportation networks. Combine all that with a pair of EV assembly plants, and you have a great place to make batteries. 

via Crain’s Chicago Business

July 28, 2021 at 06:58AM

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