Watertown, Massachusetts – U.S.-based battery manufacturer A123Systems has applied for US$1.84 billion in direct loans to build new lithium ion battery manufacturing facilities, with the first planned for southeast Michigan.

The funds are being requested under the U.S. Department of Energy’s Advanced Technology Vehicles Manufacturing Incentive Program. If approved, the program would enable to company to dramatically expand its U.S. production capacity, with full production volumes designed to supply battery systems for five million hybrid vehicles, or 500,000 plug-in electric vehicles, by 2013.

“We’re entering an exciting new phase for the automotive industry where we increase the electrification of vehicles, reducing consumption of gasoline through advanced batteries,” said president and CEO David Vieua. “This new facility would greatly accelerate this change and help ensure that the American economy replaces its dependence on foreign oil with reliance on advanced, homegrown batteries.”

A123 currently supplies seven vehicle manufacturers, including General Motors and Chrysler, covering 19 vehicle models ranging from hybrids to electric vehicles. At full operation, the company said the combined plants would occupy as much as seven million square feet, and create over 14,000 jobs. The company was started through the research labs of the Massachusetts Institute of Technology, and initially funded with a $100,000 grant from the Department of Energy in 2001.

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