Don't Let America Lose the Electric Car Battery Race

While the USA leads in lithium ion technology, it lags behind in mass manufacturing.

Published: 30-Sep-2008

Electricity is in the air in Detroit. First, General Motors unveils the plug-in Chevy Volt. Then Chrysler declares it will develop three new electric drivetrain models. Back in Washington, the Big Three automakers are locking in loan guarantees they say will speed the transition to still more battery-powered cars and trucks.

Coverage has focused mainly on sleek design, forgetting what is -- or, at the moment, isn't -- inside the cars.

Unfortunately, nobody is yet in a position today to produce advanced batteries in anything even approaching the necessary numbers.

Hybrid power represents a huge economic opportunity, a wealth of high-paying jobs and a crucial competitive challenge.

There are about a dozen hybrid models on the market. In three years, there will be at least 75. But already cracks in the supply chain are showing. Sales of the Prius are down 6 percent this year because Toyota couldn't secure enough batteries to meet surging demand.

As the industry shifts from today's nickel-metal hydride battery chemistry to lighter, more powerful lithium-ion technology, the crunch will get much worse. Other countries are dedicating significantly more resources than the United States is to solving the problem -- and reaping the rewards for doing it.

Japan's combined public and private investment in advanced battery development has outpaced that of the United States by as much as 10-fold for most of the past decade. Some in the industry are already worrying about what an emerging "battery gap" might mean for their ability to procure enough of these essential components.

High-powered lithium-ion battery systems for plug-in hybrids are vastly more complex than cells found today in laptops, mobile phones or cordless drills. Cells must operate flawlessly over long distances under extreme heat and cold over a decade or more worth of potholes. Making sure they work safely and reliably demands significant feats of chemical, electrical and computer engineering.

The good news is that the United States is still in a strong position on the core lithium-ion technology. In fact, I believe we're still ahead of competitors in Asia and Europe. But on full-scale production capabilities, they are pulling away fast.

One difficulty is that auto companies don't make batteries, and big players in the battery business are better known for precision production than research and development. But in between the two is a small group of technology-rich U.S. companies that are rapidly improving battery performance. Success will depend heavily on all three camps working in concert.

One way of closing the battery gap is to resolve the stalemate between car companies that won't sign orders until production and performance are guaranteed and battery firms that can't get financing until they have customers committed to buying.

We need to make sure that whatever strategy Washington adopts to revive the automakers doesn't forget that batteries are the one ingredient most needed for success.

There are a variety of federal tax incentives to fix the divide, and the Department of Energy has just added a new loan guarantee program for early commercial plants. As good as they are, these programs are too small for a competitive technology race moving at lightning speed. They need more resources if we want to keep up. It's also time to expand and accelerate federal research and development support through entities like Argonne National Labs and the U.S. Advanced Battery Consortium.

Without a greater national commitment soon, we risk trading in our dependence on foreign oil for a new dependence on foreign batteries.

Charles E. Gassenheimer is chief executive officer of Ener1 Inc., whose subsidiary EnerDel develops and builds lithium-ion batteries at a factory outside Indianapolis.

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