U.S. vehicle electrification gets funding jolt

  • 07-Aug-2009 12:10 EDT
Joe Biden.JPG
"I feel like I've come to Never Never Land," Vice President of the U.S. and Corvette owner Joe Biden said looking toward the Detroit neighborhood that built the first Vette. While happily announcing grant awards, he bemoaned the fact that as Vice President he is not permitted to drive.

Forty-eight projects will receive $2.4 billion in U.S. federal grant monies after being green-lighted by the U.S. Department of Energy as a way to fast-track next-generation automotive technology.

“We're announcing the single largest investment in advanced-battery technology for hybrid and electric-drive automobiles that has ever been made in the world,” U.S. Vice President Joe Biden said before a crowd gathered outside Detroit's NextEnergy, a nonprofit research incubator and business accelerator for alternative and renewable energy.

More than $1 billion in grants will be funneled to universities and companies in Michigan. The University of Michigan, Wayne State University, and Michigan Technological University will receive more than $10 million for education, work-force training, and other purposes. General Motors, Ford, and Chrysler's collective total will surpass $400 million for the manufacture of advanced hybrid and electric vehicles, as well as batteries and electric drive components.

“We need to be honest. The United States missed the first wave of innovation in manufacturing jobs in advanced vehicles and batteries. Today, the advanced-vehicle market is almost all hybrids, and the batteries that go in those hybrid vehicles are predominantly nickel metal-hydride batteries, and fewer than 1% of those batteries are made in the U.S.A.,” said Biden.

Compact Power Inc. CEO Dr. Prabhakar Patil said grant monies tallying more than $151 million will enable his company, and its parent LG Chem, to "set up a high-volume lithium-ion cell production facility that will be capable of supporting battery packs for 50,000 to 250,000 electric and hybrid-electric vehicles.

“We have been executing to establish and grow our U.S. manufacturing footprint for lithium-ion batteries starting with pack production, which is already happening and moving to cell production. The (grant) funds help expedite our timing for setting up a cell production facility in the U.S.”

GM has selected Compact to provide complete Li-ion battery packs for a Buick plug-in hybrid SUV slated to debut in 2011. Battery packs will be produced at Compact’s R&D and manufacturing center in Troy, MI, using LG Chem battery cells supplied from South Korea. The battery pack leverages GM's Voltec technology developed collaboratively by LG Chem, Compact, and GM over the past two years.

The $2.4 billion in funding under the American Recovery and Reinvestment Act includes more than $240 million to GM. Fritz Henderson, GM President and CEO, said the funding is “very important,” especially as it relates to manufacturing battery modules, electric drive motors, and "the things that are necessary in order to electrify the vehicle.”

Had the grant monies not materialized, GM would still have pursued Volt. “But it would have made it a lot harder to accomplish,” said Denise Gray, GM Director of Global Battery Systems Engineering. “We need suppliers. We need laboratories. We need universities. We need the whole supply chain to help push the technology along.”

Without funding, added Gray, “It might not have been sufficient to continue to move it the way we needed to do it. We've got to get down that cost-curve as fast as possible.”

Derrick Kuzak, Group Vice President, Global Product Development, Ford, said producing high-volume, affordable vehicles is vital. “What this [funding] does is bring cell manufacture into the U.S., and that will allow—hopefully—the drive for affordability of electrified vehicles because that’s really what we're working on: to make them more affordable for our customers.”

Ford will collect approximately $93 million in grant monies, which “will allow us to internally manufacture [hybrid vehicle] transaxles, which is a big plus for us in terms of labor and in terms of cost-effectiveness,” said Kuzak, who noted that such Ford-produced transaxles will not happen immediately.

According to Biden, the $2.4 billion in funding is more than the U.S. DOE has spent on advance vehicle technology in the past 12 years combined. While Biden was in Detroit discussing the allocations, President Barack Obama, as well as four of his cabinet members, were scattered across the country announcing and discussing the investments.

“We're not just investing in a young industry, we're building a foundation for America's economy,” Biden said.

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