LG Chem Shuts Down Plant Where Volt Battery Cells Are Made

By · September 09, 2013

Chevy Volt battery

LG Chem's Michigan facility has been closed for six weeks.

Less than a month after LG Chem started U.S. production of lithium-ion battery cells destined for GM electric cars, including the 2014 Chevrolet Volt, an EPA investigation into some of the chemicals used during cell manufacture has caused LG Chem to shut the facility for six weeks.

As reported by InsideEVs, the EPA was concerned that a chemical used at the Holland, Mich. cell-manufacturing facility was not properly registered for use in the U.S. As a consequence, the agency issued a subpoena against LG Chem in order to find out exactly which chemicals were being used on site.

“We are currently reviewing the registration status and will work with the EPA to resolve the issue quickly,” said LG Chem in an official statement.  “In the meanwhile, we are delaying production activities fro approximately six weeks until we have confirmed the registration status or otherwise obtain approval from EPA.” LG Chem indicated that the chemical in question was an unspecified, low-volume ingredient.

LG Chem’s $300 million Michigan facility was built with the help of a $151 million Department of Energy low-interest loan under the Recovery Act, but was essentially dormant for nearly two years due to low demand for battery cells.

During that time, LG Chem payed its staff to do voluntary work—even though the plant was idle—while the company's plant in South Korea provided lithium-ion cells to GM for use in the Volt. After a report from the Office of the Inspector General, there was a political outcry, forcing the Energy Department to demand LG Chem return $842,000 of the loan.

While the current closure of LG Chem’s Michigan facility is more bad press for the company, it also comes at a time when demand for battery cells from GM is on the rise. August 2013 sales of the Chevrolet Volt were at an all-time high. In addition, GM now sells the all-electric Spark, although sales were modest at 102 units in August. The 2014 Cadillac ELR luxury range-extended electric car is expected to go on sale in early 2014.

Editorial note: at the request of an EPA spokesperson who informed us that it did not force LG Chem to shut down the plant rather that LG Chem made the decision to halt production, the original headline of "EPA Shuts Down LG Chem Plant Where Volt Battery Cells Are Made" has been changed.

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