Dow Kokam Slowly Carving Out Piece of EV Pie in France

PARIS – Of the four lithium-ion battery facilities in operation or under construction in France, Dow Kokam LLC is the only one without a named customer.

The U.S.-based manufacturer is a 1-year-old joint venture between Dow Chemical Co. and TK Advanced Battery LLC, a subsidiary of South Korean battery maker Kokam Co. Ltd.

In 2009, it received a $161 million grant from the U.S. Department of Energy, as well as tax incentives from the state of Michigan to develop a manufacturing facility in Midland, MI.

“We were in the process of formalizing the joint venture as we were applying for the funding,” Chuck Reardon, commercial vice president, says in an interview here.

“I don’t want to say it’s a chicken vs. egg thing, but there was a recognition that if the U.S. was truly going to participate in this industry, there would need to be some shared risk across the value chain, and I think that was the impetus for the stimulus money.”

This past June, Dow Kokum broke ground on the Midland plant that will manufacture enough Li-ion cells for 30,000 electric vehicles annually.

The supplier earlier this year acquired Societe de Vehicules Electriques (SVE) in France and in May began construction on a plant in Le Bouchet that will have capacity for 5,000 battery packs annually.

Renault Zoe Z.E. electric car.

Research and development on cells is performed at Dow Kokam’s small facility in Lee’s Summit, MO, that produces batteries for the defense and medical markets. The company recently began building its first plant in China.

In France, where 80% of electricity comes from nuclear power, EVs have been an area of interest for many years, from the first electric car to break 62 mph (100 km/h) – the Jamais Content in 1899 – to the 10,000 small Peugeots and Citroens converted by Heuliez SA in the 1990s.

French-made Li-ion batteries have been in use for more than a year in the Mercedes S400 BlueHybrid and the BMW ActiveHybrid 7.

The Johnson Controls-Saft Advanced Power Solutions joint venture in Nersac, France, has capacity to supply 5,000 battery packs annually. Ford Motor Co. will be added as a customer in 2012, when it launches its Escape plug-in hybrid-electric vehicle.

Johnson Controls-Saft’s batteries are power-oriented, rather than energy-oriented. That makes them ideal for hybrids, which use power to boost the performance of a smaller engine, but less ideal for EVs, which favor having more electricity on board to extend driving range.

The Bolloré Group is making energy-heavy batteries in a factory in Brittany and another in Canada that it intends to put in EVs developed with Pininfarina SpA. At the Paris show, it introduced the production version of its 4-passenger up-market Bluecar, as well as a downsized 3-person version aimed squarely at the city’s Autolib car-sharing program.

Venturi Fetish unveiled at Paris auto show.

Bolloré is one of the three finalists in the bidding to participate in the Autolib. After an investment of €250 million ($320 million) last spring, the company’s factories will have a potential capacity in 2013 of 15,000 30 kWh-batteries.

The Renault SA-Nissan Motor Co. Ltd. alliance is building the largest Li-ion plant in France, at Flins, where Renault will produce its Zoe ZE electric car. The €600 million ($880 million) facility is designed to equip 100,000 vehicles annually, with output slated to begin in 2012.

Meanwhile, Dow Kokum says it is not concerned about a lack of business.

“We are quickly engaging with customers, both passenger OEMs and other transportation (companies),” says Reardon. “We haven’t made any formal announcements yet on those partnerships or contracts, but we are working in those areas.”

The acquisition of SVE gives Dow Kokam an introduction to the vibrant French EV industry., These includes not only Renault and PSA Peugeot Citroen, but also a host of small auto makers with entrants such as the Heuliez Mia and Venturi Fetish and quasi-cars such as the the Véléance Quat’Ode and Eco&Mobilité SimplyCity SCP4.

The Marcel Dassault Group spent €50 million ($70 million) on the SVE operation over five years trying to get traction for its own ideas on electric powertrains, but finally abandoned the EV field and became a minority investor in Dow Kokam.

However, it had performed nearly 625,000 miles (1 million km) of road tests and has experience in vehicle integration and battery management that now is helping Dow Kokam.

“Our ability to understand how the cell needs to be packaged and how it needs to perform in the vehicle is critical for us when we go in and talk to an OEM,” says Reardon. Dow Kokam’s technology is energy dense, using nickel-manganese-cobalt cathodes.

“If you look at light-commercial and fleet vehicles, we believe that the business model favors full-electric” vehicles, says Reardon. “I think that’s going to be a sweet spot, particularly for what Dow Kokam is offering. A lot of light-commercial vehicles are looking at production in the near term.”

For the next generation, he says, researchers are aiming to add power and cycles to the batteries without losing energy, so that Dow Kokam could supply hybrids and low-range PHEVs.

Li-ion cells also are required by industries other than light vehicles, so there is a Plan B, he says.

“We are really looking at a portfolio approach to customers and applications,” he says, “whether it’s passenger, light-commercial, defense, marine or industrial. We are managing the whole thing knowing that we are (planning) for 30 years from now; 50 years from now.

“We have to get those short-term wins. We have to look at how we start selling. But we have to do that without losing focus on what it’s going to take for us to be competitive, to be a player, to be one of the survivors long-term.”