This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.
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A Utah startup says it has secured funding to build a $450-million lithium battery “giga-factory” in Tucson, Ariz.
American Fork-based American Battery Factory expects to break ground later this year on a 267-acre site in Tucson’s Aerospace Research Campus for a factory that is expected to produce enough batteries annually to store 3 gigawatts – or 3 billion watts – of power.
“Series A” investors include Utah-based Lion Energy, which has been selling lithium batteries for several years and launched American Battery Factory, and FNA Group, the nation’s largest producer of power washers, which is converting its product line from gas-powered to electric. Series A investors typically take an ownership interest in companies.
“We anticipate delivering our first battery cells within the next 18 months,” said Jim Ge, CEO of American Battery Factory.
The research campus is owned by Pima County, Ariz., and ABF has entered into a lease-purchase agreement, according to a December 2022 memorandum from Pima County Administrator Jan Lesher. Under the agreement, the company has to hit certain thresholds for the number of employees it hires and how much they are paid. In the first two years, it has to hire 600 workers at an average yearly wage of $65,000.
Eventually, the company hopes to expand the plant to a $1.2 billion investment capable of producing 16 gigawatts of batteries annually. At that point, it would be employing 1,000 workers. The company also has ambitions for more giga-factories elsewhere.
In an interview, Ge said the company first looked at locating in Utah (“Our founders are Utah natives”), but they couldn’t find a suitable location with enough electric power available.
He said they worked with Rocky Mountain Power, but “Utah is growing so fast” and there wasn’t a suitable place with the 25 megawatts of power needed for the plant’s first phase.
He also said the factory uses an evaporative process that will benefit from Tucson’s dry climate.
The batteries will use lithium iron phosphate (LFP) technology, which is cheaper and easier to source than the lithium batteries in Teslas and some other cars. Tesla batteries, which require cobalt and nickel, have a greater energy density that makes them popular for long-range transportation, but Ge said LFP improvements are closing that gap. He said LFP batteries also last longer. They can charge and discharge thousands more times than cobalt batteries.
Ge said the company’s funding does not include any from the federal government, which has been throwing huge sums at building domestic production of lithium batteries and other clean-energy technologies. But Ge doesn’t rule out getting federal money later. He said the company does expect to have a domestic source of LFP powder to make the batteries.
ABF markets to “integrators” — companies that incorporate batteries into their consumer products, he said. “We have a lot of conversations going on right now.” Lion Energy currently imports its batteries and will be gaining a domestic source.
FNA Group markets its power washers under several brands, including Simpson, Delco and Powerwasher.
“Our focus as a company is to bring our entire supply chain to North America, and this is now possible through American Battery Factory,” said Gus Alexander, CEO of FNA Group, in a statement. “Our global plan is to electrify all our next generation of products by utilizing ABF battery cells. We are proud to support the company in this round of funding to ensure a domestic supply chain for all.”