DETROIT, Jan 7 (Reuters) - Battery maker A123 Systems plans to build automotive battery manufacturing facilities in the United States and has applied for $1.84 billion in government loans to fund the construction, the company said on Wednesday.
A123, which is competing to supply next-generation lithium-ion batteries for General Motors Corp's (GM.N) all-electric Chevy Volt, said it planned to invest $2.3 billion for the proposed U.S. manufacturing facilities, with the first plant to be located in southeast Michigan.
To support the construction, A123 has submitted an application for direct loans under the $25 billion loan package for the U.S. auto industry appropriated by the U.S. Department of Energy last year.
A123 said the loans would enable the company to expand U.S. production capacity dramatically, with full battery production volumes for 5 million hybrid vehicles per year by 2013. At full operation, A123 expects to create more than 14,000 jobs.
The Watertown, Massachusetts-based company currently has manufacturing facilities in South Korea and China.
A123 is paired with Germany's Continental AG (CONG.DE) in a joint bid to provide lithium-ion battery packs for GM's heavily touted plug-in hybrid. The two companies are in competition with South Korea's LG Chem (051910.KS) for the closely watched Volt contract.
Steve Roy, a spokesman for A123 Systems, said the plan for U.S. manufacturing facilities is not directly related to its bid to supply lithium-ion batteries for GM's Volt. He added it is intended to support A123's multiple ongoing projects with automakers ranging from GM to Chrysler LLC.
GM, Ford Motor Co (F.N), Chrysler and several parts suppliers are seeking a share of the authorized $25 billion in low-interest government loans designed to help the U.S. auto industry meet new fuel economy mandates. (Reporting by Soyoung Kim, editing by Maureen Bavdek)
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