Stimulus funds charged US battery industry

As the Chevrolet Volt , the Nissan Leaf , and a number of other electric vehicles targeted toward the general public get close to production, the demand for highly advanced batteries is going to increase exponentially in the short term. But where will the batteries be made? A report from the Department of Energy has some good news for US manufacturers.

With the help of $2.4 billion in economic stimulus funding from last year’s recovery act (ARRA) , the US share of global capacity for manufacturing advanced batteries for electric vehicles will leap from less than 2% today to 40% by 2015, according to the DOE report . The ARRA funding—matched at least one-for-one by the manufacturers—has spurred construction of nine advanced battery manufacturing plants in the US, including four that will begin operations by the end of this year.

In addition, ARRA funds are financing construction of 11 battery component factories and 10 electric drive component facilities, the report says. Taken together, all but four of the 30 US battery and component facilities that have received ARRA grants are under construction. The report was released as President Obama spoke at a 15 July groundbreaking ceremony for a $302 million battery plant in Holland, MI. Owned by Compact Power, a subsidiary of South Korea’s LG Chem, the factory is expected to commence production of lithium-ion batteries in 2012 for GM’s Volt electric vehicle and for an electric version of the Ford Focus.

“For years you’ve been hearing about manufacturing jobs disappearing overseas. You are leading the way in showing how manufacturing jobs are coming right back here to the United States of America,” Obama said.

The DOE report asserts that ARRA-funded grants are driving down the costs associated with electric vehicles, thereby expanding their domestic market. The taxpayer investments should help reduce the cost of electric car batteries by up to 70% by 2015. By then, US factories will have the capacity to produce batteries and components for 500,000 electric-drive vehicles annually, creating tens of thousands of American jobs.

Nearly half of the ARRA advanced battery awards have gone to recession-battered Michigan, where a number of other large battery factories are being built or already operating. In one project, MIT spinoff A123 Systems was awarded $249 million last year to build three factories that will produce lithium-ion batteries for vehicles, electricity grid storage, and other applications. Other ARRA awards have gone to GM, Johnson Controls, Dow Kokam, and electric drive component factories at Ford and Magna. Grants are also supporting battery workforce training programs at the University of Michigan, Michigan Technological University, and Wayne State University.

For the longer term, DOE’s Advanced Research Projects Agency–Energy (ARPA–E) is providing $80 million in backing for 20 high-risk, transformative R&D projects that could produce breakthrough battery chemistries, such as semi-solid flow batteries, ultracapacitors, and “all-electron” batteries. If successful, DOE says, battery costs could be slashed by up to 90%, and electric vehicle range could expand by sixfold. Such gains would reduce the upfront cost of electric cars to roughly that of gas-powered cars, increasing demand over the long term.

DOE predicts that battery costs will drop by half over four years, as ARRA-funded factories achieve economies of scale. By the end of 2013, a battery capable of powering a vehicle 100 miles between charges is expected to cost just $16 000, compared with $33 000 today. By the end of 2015, the cost of some electric car batteries will fall further, to around $10 000. The same cost improvement is anticipated for plug-in hybrids—cars capable of running 40 miles on electricity alone before their gasoline engine kicks in. The cost of that battery type is expected to fall from $13 000 in 2009 to roughly $6700 in 2013, and to $4000 in 2015, the DOE report says.

The lack of affordable, highly-functional batteries has been a particularly high barrier to widespread adoption of electric vehicles, but ARRA funding is reshaping the economics of battery production and distribution, says the report. Improvements in energy density from 2009 to 2015 will cut the typical weight of an electric vehicle battery by one-third, says the report. Improved durability in that same time will allow manufacturers to turn out batteries that will last up to 14 years, giving consumers confidence they won’t have to replace them and reducing the number of used batteries that will have to be disposed of.

David Kramer