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DETROIT-Lawmakers have lauded lithium battery company A123Systems, based in Watertown, MA, for pledging to build a manufacturing plant in Michigan if it gets approval for $1.84 billion in loans from the US Department of Energy’s Advanced Technology Vehicles Incentive Program. The company recently submitted its application for the funds, and said it would spend more than $2 billion to build manufacturing plants throughout the US, up to seven million square feet, starting in the Detroit area. However, company officials claim they cannot divulge any more details about future operations, as the firm is in a quiet period while it seeks stock sales.

Michigan, with its aging automaker infrastructure dragging the state down, is looking to the alternative energy vehicle sector to revitalize the state economy. “The prospect for a new advanced battery production facility in Michigan is exactly the kind of hope that our state needs as we work through a deep economic downturn,” said Sen. Carl Levin, D-MI, in a statement.

Chrysler and GM have already been working with A123Systems for the development of battery-powered vehicles, and GM reportedly has the company on its short list to provide the battery equipment for the new Chevy Volt. Bob Lutz, GM vice chairman of global product development, said in a statement that the battery plant proposal is a positive development for the industry.

A spokesman for A123Systems tells GlobeSt.com that he’s not allowed to comment about future plants, though it’s been reported that the Michigan facility would be one of the only two built, and the other would be in Massachusetts. The company said the plants could employ up to 14,000 people. The firm already has 400,000 square feet of manufacturing facilities in Massachusetts, Korea and China, and leases offices in the Boston area as well as in Ann Arbor and Livonia, MI.According to a company SEC filing, the firm believes that lithium ion-powered vehicles will represent about 70% of all vehicles sold by 2013. The high prices of fuel, greater awareness of environmental issues and increasing government regulations are increasing the demand for alternative energy vehicles, the company said in its filing. “We’re entering an exciting new phase for the automotive industry where we increase the electrification of vehicles, reducing consumption of gas through advanced batteries,” said David Vieau, president and CEO of A123, in a statement. “This new facility (in Michigan) would greatly accelerate this change and help ensure that the American economy replaces its dependence on foreign oil with reliance on advanced, homegrown batteries.”

Michigan already gave the company $10 million in incentives in November through its Center of Energy Excellence program, created by the state’s economic development corporation. Tens of thousands of new jobs could be created if the state invests in alternative energy, said officials in a statement. “Michigan has been the most aggressive state in the nation in developing our alternative energy capabilities,” said Gov. Jennifer Granholm in the statement.

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