The U.S. auto industry may be floundering in part because it failed to embrace fuel-efficient and alternative fuel cars, but U.S. companies can still position themselves to lead the way in the next phase of automobile manufacturing, a group of battery makers is arguing. Fourteen companies have announced that they’re teaming up and will seek $1 billion in federal aid to build a large-scale factory that produces lithium-ion batteries, which would be used in plug-in electric cars. Many experts believe battery technology and manufacturing capacity could become as strategically important as oil is today. Auto makers, including Corp. and Co., say they plan to roll out plug-in electric cars by 2010 [The Wall Street Journal].
The consortium, which calls itself the National Alliance for Advanced Transportation Battery Cell Manufacture, is modeled after a group formed in 1987 by computer-chip manufacturing companies that were struggling to compete with Japanese chip makers. The situation is similar now, experts say, as Asian companies dominate the battery market. “A small, fragmented (U.S.) battery industry will not long survive in the face of determined Asian competition,” Ralph Brodd, a consultant to battery manufacturers, said…. “(Other) countries understand that he who makes the batteries will one day make the cars,” he said [Reuters].
Currently, hybrid cars like the Toyota Prius use a nickel-metal hydride battery, but lithium batteries are considered the next technological leap forward and U.S. battery makers are eager to get into the business before they get left behind. The new consortium includes industrial giants Johnson Controls and 3M; with coordination and research help from Argonne National Laboratory, the group is asking for about $1 billion in federal funds to build a manufacturing site for the next generation of high-powered lithium ion batteries. If successful, the companies would pool resources and, to some extent, technologies [NPR].
The consortium members say federal funding is necessary because of the high up-front costs of building a manufacturing facility when auto makers aren’t yet mass-producing electric cars, and therefore aren’t placing orders for lithium-ion batteries. Aakar Patel, chief executive of advanced battery maker Mobius Power Inc. of Fremont, Calif., said it would be a “daunting task” for a small company like his to build a U.S. manufacturing facility because of the overhead costs and lack of domestic equipment suppliers. He hopes the consortium members, which include his company, can effectively pool resources. “There are plenty of U.S. companies that could blow away the competition” if they worked together, he said [The Wall Street Journal].
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Image: flickr / tinou bao