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Tuesday, May 25, 2010

Magna Plans Electric-Car Battery Plants in US, EU

Magna International Inc., Canada’s biggest auto-parts maker, plans to invest as much as $600 million on new plants for making lithium-ion batteries for electric vehicles.

“We currently are scouting out locations for the plants, one of which will be in the U.S. and one in Europe,” Co-Chief Executive Officer Siegfried Wolf told journalists in Vienna today, adding that Magna would spend about $200 million to $300 million per plant. The decision on the location in the European Union will be made by the end of the year, Wolf said.

Lithium-ion batteries are lighter and more powerful than the nickel-hydride batteries now in use. Automakers are trying to lower the costs of the batteries to pave the way for mass producing electric vehicles.

Bayerische Motoren Werke AG has teamed with German auto- parts supplier Robert Bosch GmbH and Korean battery maker Samsung SDI Co. on lithium-ion power packs. Daimler AG, the maker of Mercedes-Benz cars and trucks, plans to produce lithium-ion batteries at a new factory in eastern Germany as part of a joint venture with Evonik Industries AG.

The battery factories would mark Magna’s first lithium-ion production facilities, spokeswoman Edda Graf said by e-mail.

Magna, which assembles vehicles such as the Mini Countryman for automakers at its Austrian unit, last year fell short of acquiring its own car brand after General Motors Co. backed off a decision to sell a majority stake in its Opel unit to a group led by the partsmaker. Under the deal, Magna had planned to assemble Opel vehicles in Russia at facilities owned by Oleg Deripaska’s OAO GAZ, the Russian van and truck manufacturer.

‘Smaller Acquisitions’

After the failure of the Opel bid, Magna is interested in “smaller acquisitions” of as much as $200 million, Wolf said. He ruled out a bid for GKN Plc, saying the company is “absolutely not” interested.

Magna was linked to a bid for GKN, the U.K. maker of aircraft components, in a March report from the London-based Times newspaper.

Wolf, who was named GAZ’s chairman in January, said GAZ will make “a very good profit” this year. Earnings won’t be “as good as before the crisis as volume is still playing catch- up.”

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