Partners, Infrastructure Crucial to Developing Voltage Valley
YOUNGSTOWN, Ohio – Thanks to major investments through companies like Lordstown Motors Corp. and Ultium LLC and existing assets like Brite Energy Innovators and a workforce with an automotive background, the Mahoning Valley is “well positioned” to play a key role in the future of electric vehicles, an official from the U.S. Department of Energy said.
Taking part in the Regional Economic Development Summit hosted by Youngstown State University Tuesday, Daniel Simmons, assistant secretary of the agency’s Office of Energy Efficiency, said energy storage is a “key target” for product development and commercialization.
Already, the area is home to players like Lordstown Motors and its all-electric Endurance pickup truck and Brite Energy Innovators, the state’s only business incubator dedicated to energy solutions.
“We’re committed to developing new low-cost battery technologies and charging technologies that are needed to develop EVs at scale,” Simmons said. “In the US, transportation energy accounts for about one-third of all the energy we use. It is the second-highest expense for families behind only housing energy bills.”
The department’s goal, he continued is to reduce the use of cobalt in batteries – the metal can be toxic and its mining can throw radioactive particles, causing long-term health problems such as cancer, thyroid issues or vision problems – as well as getting the energy-use cost of lithium ion batteries under $100 per kilowatt hour and having a 15-minute charge time to power 300 miles of driving.
Ultium LLC, the joint venture between General Motors and LG Chem to produce batteries for electric vehicles, figures to be a major player in the market. GM has committed to having 20 models powered by the Ultium battery by 2024, while the automaker has also announced it would provide batteries to a yet-to-be-named Honda model.
Construction on the $2.3 billion Lordstown battery plant is already underway, plant manager Tom Gallagher said as part of the panel at the summit, with the installation of equipment slated to start in the third quarter of 2021, with operations starting a year later.
“Battery cells are among the most important components as we transition from internal combustion to electrification. GM looks to the future and sees an all-electric future,” he said. “GM has a long presence in the Valley and we feel the relationships can accelerate our ability. We believe their talented human resources and labor capital in the area that can allow us to execute. There will be reskilling requirements to work in this business, but we believe the education institutions are well positioned to help us in that space.”
The moves will place Lordstown Motors and GM in the middle of an exploding market. Bloomberg projects global annual sales of electric vehicles will reach 56 million by 2040, with 9.6 million of those in the United States.
“ That 9.6 million EVs is a $100 billion-per-year battery market. This potential shows the value of having reliable battery manufacturing supply chains,” Simmons said. “Your region, we think, is well positioned to be a big part of this.”
Also taking part in the panel were John Moliterno, executive director of the Western Reserve Port Authority; Rick Stockburger, president and CEO of Brite Energy Innovators; Chris Kerzich, director of government relations for Lordstown Motors; Anna Siefkin, director of the Scott Institute for Energy Research at Carnegie Mellon University; Ramsay Huntley, sustainable finance strategist at Wells Fargo; and David Myhal of Toyo Systems.
All pointed to collaboration as among the chief factors in whether or not the idea of transforming the area into the “Voltage Valley” becomes a reality. Already, Brite is working with Carnegie Mellon and is part of Wells Fargo’s Innovation Incubator program that focuses on fostering clean-energy businesses. So far, Huntley said, the $10 million initiative has supported 46 companies, which have received a combined $300 million in other funding since joining – a 30:1 return on investment.
“Frankly, this is an opportunity we can’t miss. There are so many people here that have the ability to start their own business. There are so many talented young people,” Stockburger said
The talk of that opportunity began with Lordstown Motors’ acquisition of the former GM Lordstown Complex. Already, said Kerzich, the startup automaker has presold its first year of production. By offering only fleet sales at launch, Lordstown Motors can tap into a segment that is best suited to take advantage of the cost savings brought by using electric-powered vehicles.
“The idea is that fleet buyers are concerned about the lowest cost of ownership. With the gas savings and maintenance savings, we believe that our truck will get a buyer about a $20,000 savings over five years compared to something like a Ford F-150 or a traditional fleet vehicle,” he said.
Although construction is still in the early stages at Ultium – steel has started going up and there are currently 12 cranes onsite, Gallagher said – it has already worked to provide three Youngstown State University engineering students with internships at LG Chem’s site in Michigan.
“They’re positioned well to be hired into our business when they graduate in May of next year,” the plant manager said. “There’s a tremendous opportunity to make a gateway through Youngstown State to be part of this community.”
Stockburger added that the opportunities in the sector extend beyond the two best-known names locally. Thomas Steel Strip in Warren makes the casings for Duracell and Energizer batteries, he noted, while Aptiv researches wireless charging at its site in the city.
“Our region is poised to be a center of excellence for electrification in transportation and logistics,” he said. “We can change the game. We have companies looking to reshore here and government partners that are ready to help with unique public-private partnerships.”
Even outside of the Mahoning Valley, the future of electric vehicles is likely to pass through Ohio. Toyo Systems has a battery testing site just outside Columbus and while business was slow there after it opened in 2013, officer David Myhal said he sees demand returning as electric vehicles once again enter the public consciousness. The site has worked with automakers like Tesla – Toyo Systems is the exclusive provider of battery testing equipment in Tesla’s Gigafactory in California – as well as had conversations with Brite.
“When we got here, we were excited about the potential of batteries in the United States,” he said. “We’re excited that we’re finally getting to the point again where there’s a need for the services we provide. … As we see a huge increase in electric vehicles, we want to make sure they’re safe for consumers.”
The next step in developing the Voltage Valley is ensuring there’s an infrastructure that supports the businesses that arrive, whether they’re startups or ones relocating to the area. The Western Reserve Port Authority has applied for a Build grant from the U.S. Department of Transportation, the same that’s being used to fund some of the Fifth Avenue renovation project in Youngstown. If approved, the grant would go toward the Lordstown Smart Logistics Hub, which would focus on developing three sectors: “vehicle electrification, connected and automated infrastructure and future-focused transfer yards,” according to WRPA’s executive director, John Moliterno.
“It incorporates cutting edge technology to maximize the efficiency, reliability and safety of mobility to enhance supply chain residuals,” he said. “It’s a lot to say, but what we’re doing is capitalizing on Lordstown’s location and the tremendous activity in that area.”
Along the major corridors through the Lordstown area, he added, there are 3,000 acres of shovel-ready land, as well as access to the Ohio Turnpike, rail lines and waterways.
Those amenities are critical in attracting new businesses, but so is existing infrastructure, said Kristen Zeiber, the project manager for the Lordstown revitalization plan underway at Kent State University’s Cleveland Urban Design Collaborative. With areas like the Golden Triangle and brownfields like the former Copperweld site, or even vacant properties, Trumbull and Mahoning counties are ripe for land reuse and redevelopment.
“There is some vacancy. There’s slight overbuild of warehousing and industry out here. We’re seeing sites that are still available and we want to think of those as an opportunity for development,” she said during her presentation. “Rather than developing in a greenfield out in the suburbs, let’s think about how we can use the industrial sites we already have to build on the character we already have. We can reimagine what that might be for the 21st century.”
Copyright 2020 The Business Journal, Youngstown, Ohio.