Once a leader in EV batteries, AESC mounts a comeback

once a leader in ev batteries aesc mounts a comeback

FRANKFORT, Ky. — Envision AESC of Japan — one of the industry’s earliest mass producers of electric vehicle batteries — moved last week to reclaim its U.S. initiative, saying it will build a $2 billion battery cell and module plant in Bowling Green, Ky., to supply “numerous” customers.

AESC was created in 2007 as a venture between Nissan Motor Co. and NEC Corp. primarily to support the automaker’s pioneering effort to market the electric Leaf.

But now, 15 years later, battery-making giants are rapidly sinking billions into U.S. manufacturing projects as automakers plan dozens of new EVs.

Just 60 miles up the highway from the Bowling Green industrial park where Envision AESC will recruit and train 2,000 workers to launch production in 2025, Ford Motor Co. and its Korean battery partner SK Innovation have begun clearing land to construct a $5.8 billion manufacturing center with two battery plants. And 100 miles south of Bowling Green in Spring Hill, Tenn., General Motors and its battery partner, Korea’s LG Chem, are constructing a $2.3 billion battery plant to supply new GM electric vehicles.

The new Envision AESC operation will supply Mercedes-Benz’s newly launched EV production line in Vance, Ala., 300 miles south of the plant. But it will also pitch future business to other U.S. automakers, Envision AESC Group CEO Shoichi Matsumoto told Automotive News last week.

“We have growth plans for both the U.S. and other regions around the world,” Matsumoto said.

He declined to say what other automakers the new Kentucky plant will supply. Its initial capacity will allow it to supply 300,000 vehicles a year by 2027.

In addition to Mercedes-Benz and Nissan, the supplier also has business outside North America with Honda Motor Co.

The company, in which Nissan still owns an 11 percent stake after selling off majority interest, owns one U.S. plant in Smyrna, Tenn., adjacent to the Nissan plant that assembles the low-volume Leaf.

Former Nissan Chairman Carlos Ghosn ordered up the battery venture because he said, at the time, there was not yet a battery supply chain to support what he wanted Nissan to do in electric vehicles. Years later, Ghosn said it was no longer necessary for Nissan to make its own batteries. In 2018, Nissan announced that it was selling majority interest in AESC to Envision Group, a Shanghai-based energy conglomerate.

A spokeswoman for Envision AESC said last week that the battery company is still headquartered and managed in Japan and is a separate legal entity from Envision.

Matsumoto said the batteries the company will produce in Kentucky will represent a higher level of technology than those it currently produces for the Leaf. They will have 30 percent more energy density than current-generation batteries because of innovations in chemistry and structure.

He also said that Bowling Green could, in time, produce solid state batteries, a hotly pursued new technology that promises lighter weight, higher energy density and faster charging.

Matsumoto said battery plants are expensive projects to undertake because of the production equipment required and the need for clean-room environments and absolute control of humidity in the workplace.

But despite more than $15.5 billion rushing into the construction of new battery capacity in the past year, automakers continue to announce plans for more electric vehicles — each of them requiring a battery.

The Biden administration wants half of U.S. new vehicles to be zero emission by 2030.

Matsumoto said he does not expect his project and Ford’s battery project to butt heads over recruiting work forces in the next few years. Kentucky Gov. Andy Beshear told Automotive News at the Kentucky state capitol that having Ford’s battery project and Envision AESC’s in close proximity will help create a cluster of industry that will attract prospective workers to the area.

“I think we’re going to see clusters like this developing in industry,” Beshear said. “They will help create a talent pool in this region, making us the top producer of electric vehicle batteries in the country.”

It will also help draw battery component suppliers to the area, Beshear said.

Matsumoto said there are a number of suppliers that will be critical to attract to the area, including producers of separators, copper foil components and electrolytes.


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