Government dollars to help establish U.S. Li-ion industry

  • 11-May-2009 02:59 EDT
EnerDel-photo by pat at Batt Conf 4-16-09.jpg

EnerDel displayed its lithium-ion battery for the Think City at the recent Advanced Battery Manufacturing Conference in Washington, D.C. Patrick Ponticel

Necessary but not sufficient: that was the consensus of participants in April's Infocast Advanced Battery Manufacturing Conference in Washington, D.C., about the $1.5 billion federal grant program included in the stimulus package Congress passed in February. The U.S. Department of Energy plans to hand out the grants for use in constructing and upgrading battery-manufacturing, component-manufacturing, and recycling plants related to U.S. production of lithium-ion and other advanced batteries. The stimulus package includes another $500 million in grants for components needed for electric vehicles, such as electric motors.

The panelists lauded the availability of the $1.5 billion in grants, but they also underlined the importance of making parallel progress in such areas as creating vehicle demand, addressing technical standards, and avoiding trade wars.

Many of the speakers and audience questioners agreed that had not the U.S. economy hit the skids, Congress would have never approved the $1.5 billion battery program, which is in addition, theoretically, to another DOE funding mechanism: the Advanced Technology Vehicles Manufacturing Incentive Program (ATVMIP). For that, the DOE will be making up to $25 billion in loan guarantees to companies for retooling factories to manufacture advanced vehicles. Battery companies such as A123Systems have applied to the ATVMIP for loans.

Details the DOE $1.5 billion battery grant program have yet to be announced. But speakers at the Infocast conference pounded away at the notion that the $1.5 billion is a once-in-a-lifetime opportunity to jump-start a U.S. Li-ion battery manufacturing industry—one that will probably have to motor on using only private-sector funds after federal grant dollars are depleted.

“I think a number of my fellow panelists have said this really is a one-time opportunity,” said James Greenberger, Partner, Reed Smith LLP, and co-founder of the National Alliance for Advanced Transportation Batteries (NAATBatt). “We have to make very good use of this particular opportunity to not just build factories, but build an industry that is sustainable and an industry that is capable of accessing the private capital markets for future funding, rather than public funding.”

NAATBatt is building a large-scale manufacturing facility in Hardin County, Kentucky, which will contract-manufacture Li-ion battery cells of various chemistries, formats, and designs for NAATBatt member companies. The factory will offer access only to companies that are majority-owned and controlled by U.S. citizens. This is the model essentially used by Sematech, the U.S. semiconductor consortium that formed in the 1980s to counter Japanese domination of semiconductor manufacturing.

Today, many feel the Chinese and Koreans have a big head start in lithium-ion battery technology development and manufacturing. Greenberger, however, said that the technology behind the Li-ion batteries of the future—seven or eight years from now—will not necessarily be developed by the companies that today may seem to be the industry leaders. Instead, the Li-ion batteries are likely to be developed by one of perhaps dozens of companies that today are working to increase the power density and reduce the cost of making cells.

Mark Wagner, Vice President, Government Relations, Johnson Controls Inc., noted that his company is building a domestic Li-ion battery manufacturing facility in Holland, MI. That is a step in the right direction, but more needs to be done while the federal funding window is open. If U.S. companies are not more aggressive in establishing domestic capacity for Li-ion batteries, they may establish it in Europe. “We’ve got to seize this opportunity,” he said, and not just to “put up a bunch of manufacturing plants.” Availability of materials for the batteries and development of an infrastructure for recycling of the batteries are other important elements in establishing a sustainable Li-ion industry in the U.S., Wagner said.

Ric Fulop, Co-founder and Vice President, A123Systems, noted that his company, too, is building a new plant in Michigan, a project for which it is seeking loans from the ATVMIP. The company makes batteries of lithium-ion-phosphate chemistry.

Capacity is one thing, demand another. On that topic, JCI’s Wagner said: “I think we’ve really got to be thinking about what we are doing on the demand side. Vehicles have to be purchased. Hybrid-electric, plug-in electric vehicles have to be purchased in mass quantities in order to have a stable manufacturing district here in the U.S.” He noted that the stimulus bill contains money for the U.S. Government Services Administration (GSA), which is the procurement arm of the federal government, to buy fuel-efficient cars. “But how many of them are going to be hybrids, and when is the federal government going to be buying plug-in hybrids?” he asked rhetorically.

Ron Minsk, Senior Vice President for Policy, Securing America’s Future Energy, explained that plug-in advocates worked with Sen. Byron Dorgan (N.D.) on a bill (S. 774) he introduced on April 1. It includes a mandate that the federal government purchase plug-in or fully electric vehicles starting in 2012; the percentage in that year would be 10% of vehicles purchased, increasing 5% a year up to a ceiling of 50%.

In addition to demand-side incentives, JCI’s Wagner highlighted the need for government to be a catalyst for creation of industry standards relating to charging of plug-in vehicles. “I think there may be some difference of opinion as to what those standards should ultimately be,” Wagner said, “but lock us all in a room with the right standard organizations and the agencies [to sort out standards issues].

SAE International soon will put out for ballot a standard relating to vehicle electrification. J1772 spells out the specifications for the coupler (consisting of a connector and vehicle inlet) through which current will flow into the vehicle from an outside source.

In regard to influencing public policy and accessing federal dollars, “I think the take-away [from this panel] is, if you’re not at the table, then you’re probably on the menu,” said panel moderator Richard Eidlin, Director of Business Outreach for the Apollo Alliance. “It really is a unique moment.”

HTML for Linking to Page
Page URL
Rate It
0.00 Avg. Rating

Read More Articles On

The 2018 CT6 PHEV is an engaging and efficient luxury sedan aimed primarily at China’s burgeoning New Energy Vehicle market.
A recent Engineering program at the University of Michigan’s Dearborn campus jettisoned lectures and text books and replaced them with a fresh Design, Build, and Test curriculum including new lean-Startup courses addressing customer discovery techniques.
Automakers are looking to harness the sun's energy to power electrical components in new vehicles
A U.K.-based consortium led by Nissan is aiming at greater energy density with advanced energy management from Hyperdrive Innovation.

Related Items

Training / Education
Training / Education
Training / Education