coda sedan
Coda Sedan – Click above for high-res image gallery

Here's a corollary to this morning's post about export hurdles. Not only will electric vehicles (EVs) and related components face logistical problems moving from the U.S. to overseas markets, there are a host of other reasons why it just makes sense for companies to build EV battery packs in America for Americans. Times are changing and the once great economic advantage of manufacturing in China over the U.S. is shrinking. Here's why:
  1. We all know that most of what we buy carries the "Made in China" tag because it's cheap to get stuff made there thanks, in part, to low labor costs. However, Chinese workers demanding better pay and labor costs for a fully assembled automotive battery pack only account for a small portion of the overall cost.
  2. Chinese currency is appreciating, so the mighty dollar will buy us less.
  3. Fuel prices are on the rise. Shipping very heavy battery packs on expensive fuel can eat up the savings garnered from cheap labor.
Considering all of these factors, manufacturing electric vehicle battery packs overseas, specifically in China, is becoming less lucrative, which makes domestic production more sensible. Coda Automotive and A123 Systems, a battery maker which already has a lithium-ion battery plant in Michigan, are counting on this change (while hedging their best with overseas facilities, either self-run or with partners). Both are pursuing loans from the Department of Energy in order to establish more battery plants in the U.S. Made in America has a nice ring to it!

[Source: New York Times]