This week’s Detroit Auto Show has produced a variety of headlines, but one bit of news stood out, at least for some small cap companies: the announcement that South Korea’s LG Chem (http://www.lgchem.com) was chosen by General Motors to supply lithium-ion battery cells for its highly-anticipated Chevrolet Volt plug-in vehicle scheduled to debut in 2010. The good news for LG Chem was not so good for Massachusetts-based battery producer A123 Systems (http://www.a123systems.com), which had been in the running for the GM contract and announced this month plans to build a U.S. based facility to produce li-ion batteries.
In its announcement, GM noted that it would build a plant in Michigan to produce the li-ion batteries. Another U.S. based smallcap company, Ener1 (Nasdaq: HEV, http://www.ener1.com), is also attempting to become the first company to mass-produce a cost-competitive li-ion battery for hybrid and electric vehicles. Ener1’s EnerDel subsidiary, which is developing the li-ion technology, is based in Indiana.