ELYRIA — President Barack Obama wants a million plug-in electric cars on the road by 2015, and there’s a good chance the chemicals inside the lithium-ion batteries for those vehicles will be produced in Elyria.

On Wednesday, BASF Catalysts was awarded $24.6 million in federal stimulus money toward the cost of building a $50 million plant adjacent to its existing Elyria site so it can produce the nickel-cobalt-metal cathode material for the batteries.

Elyria was chosen due to “synergy with existing production operation, skilled work force and proximity to potential customers,” according to Prashant Chintawar, manager of the lithium-ion division at BASF.

The grant puts BASF — the world’s largest chemical company — in a favorable position to dominate the market in this part of the world, said Daniel Pepitone, company spokesman.

“Our goal is to become the largest supplier for material for lithium-ion batteries in North America,” Pepitone said. “We’re creating the guts — the materials — that will make up the Li- ion batteries.”

Currently, 185 employees work in manufacturing catalysts and specialty pigments at BASF’s Elyria plant at 124 Pine St. Formerly known as Engelhard, BASF bought the Elyria plant and the company’s other facilities for $5 billion in 2006.

The Elyria location had a payroll of some $17.5 million in 2008 and paid sabout $342,000 in local and state taxes.

How much payroll taxes will grow as a result of the new facility will depend on market demands, but BASF estimated about 30 additional people would work there for plant operations and support. Jobs at the new facility, which is expected to open by 2012, will include engineering and technical positions, Pepitone said.

As the lithium-ion battery market grows, more personnel likely will be added and additional opportunities will be created across the board, from raw material development to battery suppliers, according to BASF, a German company with U.S. headquarters in New Jersey.

The federal grant constitutes about half of the cost of building the plant, and about 30 jobs will be created as it is planned and built, Pepitone said.

Elyria Mayor Bill Grace on Wednesday pledged to do whatever the city could to help BASF move forward.
“We’re excited for the company and thrilled for the families of employees,” Grace said. “It will be a great boost for Elyria and the local area.”

Broad support

BASF’s grant was part of $2.4 billion in stimulus money handed out across the country by the Obama administration toward the goal of advancing electric cars. In Lancaster in southern Ohio, TOXCO Inc. received $9.5 million toward advanced hydrothermal recycling of the Li-ion batteries.

“This investment will help workers in Ohio where unemployment is at 11 percent,” said U.S. Labor Secretary Hilda Solis, who was part of a conference call Wednesday that included U.S. Sen. Sherrod Brown, D-Ohio, U.S. Rep. Betty Sutton, D-Copley Township, and Gov. Ted Strickland. “This is a perfect example of an investment that meets both short-term and long-term goals.”

She said the federal government’s investment will lead to tens of thousands of good, sustainable jobs across the nation and immediately help revitalize the auto industry.

“By moving the auto industry away from oil, it also will help us to break the country’s dangerous dependence on foreign oil and reduce the carbon pollution causing climate change,” Solis said.

She also said the investment will affect everyday consumers, too, because the energy used to drive a plug-in hybrid equates to gasoline costing 75 cents a gallon — a price not seen in the United States in decades.

The entire Ohio delegation to Congress signed on to support BASF’s bid for the grant, and Sutton said during the conference call that she was proud of the effort to secure the money.

“It will help us build an environment cleaner and brighter for our children — worthy of them,” Sutton said. “As the representative from Elyria, it is critically important. Not only in the near term will it create jobs by way of building the facility, but it will also create jobs in the long term as we become a leader in the development and deployment of the next generation of lithium-ion batteries which are essential for our auto industry.”

Sutton said the investment could help turn around the area’s fortunes.

“The potential is extraordinary, and it is exactly what we need in Northeast Ohio to take advantage of what awaits us,” Sutton said.

It’s no secret that the European-designed Ford Transit Connect is coming to America.

Although Ford Motor Co. has yet to announce what vehicle it will bring to the Avon Lake Assembly Plant, such an investment was discussed during contract negotiations with the United Auto Workers. It is believed that the BASF project could boost the potential for the plant to be the next manufacturer of a hybrid-type van.

Ned Hill, dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University, is hoping that more specifically it will come to Avon Lake.

“Ford knows the Econoline van is coming to the end of its life,” he said. “If Ford is lucky, the Transit Connect could be the next minivan. It’s small, flexible and fuel-efficient.”

With BASF in Elyria providing a key piece of the lithium-ion battery, Ford has another reason to invest in Avon Lake, Hill said.

“This will have a big impact on the production of the next-generation automobiles,” he said. “With the coming of hybrids and all-electric vehicles, the engine-building capacity in Ohio could become redundant. What gives me optimism with this is companies like Ford will have further incentive to keep those facilities close to their new supply chain. It’s simple logic to have a vendor nearby.”

Strickland, too, said the grant was a shot in the arm.

Ohio, he said, will not give up on its vital auto industry, and he pledged to help BASF move forward by using a state stimulus package and offering money to train workers.

Brown, too, said the grants to the two Ohio companies will lay the groundwork for the state’s future.

With advances in wind turbines, solar, biomass and fuel cells, Brown said Ohio is becoming “truly the Silicon Valley of alternative energy.”

He said the United States fell behind the rest of the world in battery research, development and manufacturing. The grants will help put the country back on top, he said.

“It will help make us a world leader, and it will be in Ohio,’’ Brown said during the call.

Advanced technology

While quite promising, the lithium-ion batteries — which are much more powerful than the nickel-metal hydride batteries used to power current gas hybrids — need to be advanced to where they can supply more power and range between charges, Chintawar said.

To that end, BASF is working with the U.S. Department of Energy’s Argonne National Laboratory in Illinois on perfecting the material used in the batteries, according to Donald Hillebrand, director of the Center for Transportation Research.

Hillebrand said the research holds tremendous promise and the improved batteries will be used for much, much more than vehicles.

Whoever perfects the technology will be supplying battery power “for electronics in the next 20 years — not just cars,” he said.

Some 100 of the lithium-ion batteries are now undergoing driving tests in vehicles and a couple of the batteries have overheated and burned — similar to problems with batteries in some laptops, Hillebrand said.

It’s worth solving the problem, known as thermal runaway, because the lithium-ion batteries provide two to three times more energy than the batteries now used in commercially-available gasoline hybrids, said Mark Peters, Argonne’s associate laboratory director of energy sciences and engineering.

Making the batteries “as light as possible” and lowering the $20,000-per-battery cost also is a challenge, he said.

One option to lower costs would be to replace costly cobalt with another material such as manganese, Peters said.

By the time the Elyria plant opens, the technology could be in place for more applications for the batteries, Peters said.
“We’re going to make major strides in the next three to five years,” Peters said.

Obama’s goal of having a million plug-in electric cars on the road by 2015 “is a stretch goal, but it wouldn’t surprise me,” Peters said, adding that committing $2.4 billion in federal funds to the project was wise.

Hillebrand agreed, saying that 20 years ago, scientists in the United States developed the technology for the nickel-metal hydride batteries now used in gasoline hybrids only to see the Japanese and Koreans “do an excellent job” at putting them to use.

Hillebrand said scientists at the national laboratory “are trying to make sure that doesn’t happen again — this is a multi-billion-dollar industry.”

Lithium-ion batteries

• A lithium-ion (Li-ion) Battery a rechargeable battery that works by shuttling Li-ion between positive and negative electrodes.
• No hazardous metals (e.g., lead) are used in these batteries; they can be cycled and recharged hundred of times.
• They are currently used in cell phones, laptops, power tools, cameras and other consumer electronics devices.
• These batteries are expected to propel future hybrid cars and this application is of significant interest to BASF.
• Safety of Li-ion batteries can be designed. BASF’s proposed battery materials are inherently safe and therefore suitable for automotive applications.
• These batteries will lower cars’ emissions and reduce America’s dependence on foreign oil.

Contact Cindy Leise at 329-7245 or cleise@chroniclet.com.

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