Johnson Controls-Saft has announced plans to build its first lithium-ion battery cell manufacturing facility in the US after being offered tax credits and incentives from Michigan totalling US$148.5m as part of the state's strategy to become the "advanced battery capital of the world."

The supplier estimated the cost to renovate the Holland factory at about $220m. It will have an initial capacity of 15m li-ion cells.

Johnson opened the world's first li-ion manufacturing facility for hybrid electric vehicles in 2008 in Nersac, France. It is currently making batteries for Daimler's upcoming Mercedes-Benz S-class hybrid which goes on sale later this year. The firm will also supply the battery system for the BMW 7 series ActiveHybrid available in 2010, Azure Dynamic's Balance hybrid electric commercial vehicles to be launched in 2010, and Ford's first plug-in hybrid on sale in 2012.

"Battery technology is strategically important to the future of the US automotive industry and the economy at large," said Alex Molinaroli, president of Johnson Controls' Power Solutions unit, in a statement. "Our first US plant will bring about 500 jobs to Michigan, and many additional jobs through suppliers and the businesses these employees will support. It is a key element of our broader strategy and commitment to the hybrid vehicle industry in North America."

"This Michigan facility will allow us to serve our strategic global customers, and specifically the production contracts we have with Ford and Azure Dynamics. It will also allow us to serve other important customers as the hybrid and electric vehicle industry continues to gain a foothold in the United States," said Mary Ann Wright, who heads both the joint venture and Johnson Controls' hybrid business.

The supplier said it would also apply for a grant through the federal American Recovery and Reinvestment Act in May.

Separately, Chrysler said its battery partnership with A123Systems had received a $100m tax grant from the Michigan Economic Development Corporation to build a full-scale battery manufacturing factory in the state. The venture will make li-ion battery cells, modules and packs.

"The new plant will bring additional high-tech jobs to Michigan, and will help Chrysler achieve its leadership goals in electric vehicle development and production," the automaker said in a statement.

Chrysler last week said A123Systems would supply "energy storage systems" for its first-generation 'Envi' range-extended electric vehicles and battery only models.

Other companies to receive tax credits included LG Chem-Compact Power for a planned US$200m facility. The company produces battery cells for the Chevrolet Volt, which is to go into mass production in 2010, Reuters reported.