Valence Technology, Inc. (Valence), a US-based manufacturer and supplier of lithium iron magnesium phosphate energy storage solutions, has applied an application for up to $608 million in low interest federal loans. The filing of application is under the US Department of Energy's (DOE’s) Advanced Technology Vehicles Manufacturing Incentive Program (ATVMIP) to build a new $760 million lithium iron magnesium phosphate battery manufacturing facility in Central Texas.
It is expected that Valence’s US production capacity would be online as early as 2011, if the application is approved. This financing would enable the company to build a two-million-square-foot, vertically integrated manufacturing facility to manufacture and accumulate the finished energy storage solutions. The new facility would make cathode material, build individual cells, and accumulate packs and peripherals. This new facility would meet the requirements of company’s growing customer portfolio, incorporating automotive original equipment manufacturers and Tier 1 suppliers from hybrid electric vehicles (HEV) to electric vehicles (EV) solutions.
The new domestic manufacturing facility when operated at full capacity, would supply energy storage solutions for over 250,000 hybrid and all electric vehicles annually. The new facility would also supply the energy storage solutions to the stationary power market, the industrial market and the US military.
As an industry leader, we are well positioned to qualify for these loans as our technology and manufacturing processes are mature, proven and transferable, stated Robert L. Kanode, president and chief executive officer of Valence. We have been manufacturing in high volumes for the past four years at our Suzhou, China facilities and have been looking for an opportunity to expand into the United States. While we are currently supplying U.S. customers out of China, we would expect to be supplying the U.S. markets from a domestic facility by 2011, when the first phase of construction is completed.
The U.S. continues to seek a reduction in gasoline consumption and dependence on foreign oil to sustain ongoing demand. As a result, new automotive and stationary markets are emerging driven by electrification of the transportation industry and the need for mass storage of wind and solar generated energy.
Ever since 2005 Valence has delivered 70 megawatt-hours of energy, which is equal to 3,500 electric cars. Several companies are evaluating the company’s energy storage solutions and some have chosen the company to be their system suppliers, incorporating Brammo (electric motorcycle), Smith Electric Vehicles (delivery vehicles), Segway (personal transporter) and PVI (commercial electric trucks in partnership with Renault Trucks). With twenty years in lithium battery industry, the company maintains the significant experience and intellectual property and will utilize these assets to further decrease this country’s dependence on fossil fuels.
Ross Goolsby, chief financial officer of Valence stated, We are focusing on a facility in the Greater Austin area of Texas, which when it reaches full capacity, would provide up to 4,000 new jobs. We believe that Texas is a leading state in alternative energy and we have access to all the resources we will need to develop this facility.
Rick Perry, Texas governor, in a letter this week to Robert L. Kanode, expressed his support to establish a home for the advanced battery development and manufacturing in Texas for automotive and military applications. Governor Perry noted Texas’ tremendous scientific community, outstanding transportation infrastructure, dedicated and skilled workforce, low tax burden and pro-business climate.
Valence Technology’s announcement is really exciting news for the Austin area. In addition to raw job creation, the fact that Valence is staking out its spot in what will be the quickly evolving, fast-growing and vitally important energy storage sector has huge economic opportunities, stated Will Wynn, Austin mayor and United States Conference of Mayors Energy Committee chairman and Obama Transition Team member for DOE.
We must create safe, innovative, high-performing advanced energy solutions in the United States to help reduce our dependence on foreign technology and foreign oil, stated Rodney Ellis, Texas State Senator and National Commission on Energy Policy Member. We are no longer talking about tomorrow’s dreams, we are talking about today’s deliverables. Valence is exactly the right industry leader to bring this critical manufacturing plant and new high-tech jobs to Texas.