Our Next Energy (ONE), a Michigan-based energy storage technology company, announced a $1.6 billion investment in a new battery cell manufacturing plant called ONE Circle in Van Buren Township, Michigan.

The gigafactory is expected to operate at a full annual capacity of 20 GWh — equivalent to 200,000 electric vehicle battery packs — by the end of 2027. The project is expected to create 2,112 new jobs, for which ONE will conduct a workforce development program in 2024 to train Michigan residents for green manufacturing jobs.

ONE would take possession of the facility in January 2023 and begin upgrades and equipment installation.

By 2028, ONE Circle claims it will drive down carbon emissions by 45% by onshoring its supply chain and integrating materials refinement with its Massachusetts-based partner, 6K Energy, into its manufacturing processes while leveraging renewable energy for 50% of its power needs.

“ONE is thrilled to select Michigan for our first cell factory due to the state’s unique combination of battery talent, proximity to material supply, and access to low-cost energy,” said Mujeeb Ijaz, founder, and CEO of ONE.

The investment, supported by a $215 million State grant, is expected to help boost the trend away from NCM-based (combination of Nickel, Manganese, and Cobalt) cell factories. The factory in Michigan would become the first to develop North American material supply chains to commercialize Lithium Iron Phosphate (LFP) technologies.

The company has signed a multi-year lease agreement with a real estate investment company Ashley Capital, for a 659,589-square-foot building which will include raw material refinement, cathode materials production, and cell and battery manufacturing.

ONE is also partnering with a North American battery recycler to bring recycled materials back into its LFP and Anode-Free cells. The sustainable approach to cell manufacturing is supported by ONE’s partnership with DTE Energy to operate a grid-tied factory with utility-scale energy storage. ONE Circle would act as a giant battery in its Gigafactory-to-Grid model to help stabilize the local power grid and provide renewable energy to the surrounding community in partnership with DTE Energy.

The company had conducted a competitive site selection process, evaluating 12 states and a Canadian province, but ultimately selected Michigan because of the commitment of the State and utility partners to making Michigan a key part of the electric vehicle future.

This month, the U.S. Department of Energy (DoE) announced its intention to invoke the Cold War-era Defense Production Act to spur domestic production of clean energy technologies, including solar, storage, etc., to help reduce the dependency on imports.

The International Energy Agency forecasts the demand for EV batteries to increase from 340 GWh to over 3,500 GWh by 2030.

According to Mercom’s 1H and Q2 2022 Funding and M&A Report For Storage, Grid & Efficiency, corporate funding for battery storage companies in 1H 2022 increased by 64%, with $15.8 billion raised in 57 deals compared to $9.6 billion raised in 43 deals in 1H 2021.