Whether or not you support the federal government lending the beleaguered U.S. auto industry $13.4 dollars in emergency funding (with more to come in February), most probably agree that whatever they do with that money, it can’t be business as usual for the Big Three
A new alliance was announced yesterday between 14 battery makers and the Department of Energy’s Argonne National Laboratory to promote the development and manufacture of advanced lithium ion battery technology. Called the National Alliance for Advanced Transportation Battery Cell Manufacture, the hope of the alliance is that U.S. car companies will use the batteries in next-generation hybrid and plug-in electric cars.
Lithium-ion battery development is now dominated by foreign countries in Europe and Asia. Even GM, gasping for breath as it is, has announced it may use foreign-produced batteries for its Chevy Volt, it’s much publicized plug-in hybrid theoretically due out in 2010 (GM announced this week that it will be delaying construction of a manufacturing plant for the car, claiming it will have no impact on the car’s expected release).
It would appear that such an alliance to promote both U.S. battery development and green cars couldn’t have come at a more opportune time – unless it had come many years ago.
Strategic alliance based on semiconductor model
The National Alliance for Advanced Transportation Battery Cell Manufacture (the “Alliance”) include such prominent U.S. firms as 3M, Johnson Controls-Saft Advanced Power Solutions, ActaCell, All Cell Technologies, Altair Nanotechnologies Inc, Eagle Picher Industries Inc, EnerSys, Envia Systems, FMC Corp, MicroSun Technologies, Mobius Power, SiLyte, Superior Graphite, and Townsend Advanced Energy.
The alliance is modeled after Sematech, formed in 1987 by a group of U.S. semiconductor manufacturers with $1 billion in federal funding to built manufacturing plants to compete with Asian competition.
The market for rechargeable lithium-ion batteries is currently too small to support any one company to build a plant on its own. By combining resources, and with the help of up to $2 billion dollars from the federal government over the next five years (perhaps some of that money to the car makers should go to the Alliance?), the hope is to catch up on the lead of Asian manufacturers that now supply the lion’s share of batteries used in hybrid and electric cars. According to the Alliance, the battery industry of other countries receives government subsidies.
“He who makes the batteries”… wins
Toyota’s Prius, the best-selling hybrid car currently on the market, uses a nickel metal hydride battery. Lithium-ion batteries are generally considered the next great step forward for electric vehicles, as they can be recharged in a standard AC wall socket. With China, Japan, and South Korea the leaders in lithium battery research, the Alliance is a significant development for the U.S. “It’s a huge deal for the nation, and for the lab,” said Mark Peters, who heads up transportation and battery research at Argonne National Laboratory.
Ralph Brodd, a consultant to battery manufacturers, said in a statement released by Argonne: “A small, fragmented (U.S.) battery industry will not long survive in the face of determined Asian competition. (Other) countries understand that he who makes the batteries will one day make the cars”.
Putting our money to good use
These days, a few billion here or a few billion there doesn’t seem like much. Let me correct myself – it actually seems like a lot. We are, perhaps, becoming a bit desensitized to yet another announcement of federal intervention into the private sector costing the taxpayer billions of dollars. All to remedy what seems at best incompetent management and at worst criminal malfeasance.
Spending $1 billion to $2 billion dollars over the next five years to fund the Alliance will create jobs and (hopefully) help push the all-but-bankrupt U.S. auto industry into a competitive position for the 21st century.
Chicago lawyer James Greenberger, who is leading the Alliance effort, sums it up:
“We think this is the most effective way that government can leverage public money to both establish lithium ion battery manufacture in the United States and revitalize the automotive industry in the long term”.
Image Credit: Filckr, ttstam