Dearborn, Michigan – Ford Motor Company said it is another step closer to production plug-in hybrid electric vehicles, following the announcement that its battery supplier will use tax incentive funding to help it build a cell manufacturing facility in the U.S.

Johnson Controls-Saft plans to build a facility to manufacture lithium-ion (Li-ion) battery systems in Holland, Michigan. Ford recently entered into a partnership with Johnson Controls-Saft to develop an advanced Li-ion battery system to power Ford’s first commercial plug-in hybrid as part of its electrification strategy.

Ford plans to use the system to power a pure battery electric Transit Connect commercial van in 2010, a battery electric passenger car developed jointly with Magna International by 2011, and a plug-in hybrid electric and next-generation hybrid electric vehicle by 2012. Unique systems are required for each type of vehicle, because the drive cycles of each have different types of battery storage and usage requirements.

Johnson Controls-Saft will receive a combination of tax credits and incentives totalling US$148.5 million from the state of Michigan. It is estimated that renovating its facility in Holland for Li-ion automotive battery production is approximately $220 million. Initial capacity is expected to be 15 million Li-ion cells.

The company is one of four, along with LG Chem-Compact Power Inc., KD Advanced Battery Group LLC, and A123Systems Inc., that are investing a total of $1.7 billion to launch advanced battery manufacturing facilities in Michigan, as part of the state’s strategy to become “the advanced battery capital of the world,” according to state governor Jennifer Granholm. The four companies are expected to create more than 6,600 new jobs in the state.

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