Why Obama is putting so much stock in battery technology

What's with all the presidential visits to battery-manufacturing plants?

President Obama's trip Thursday to just such a plant in Holland, Mich., was his fourth automotive-battery-focused stop since being elected. To riff off of President Clinton's mantra "it's the economy, stupid," it's almost as if Mr. Obama's catch phrase about what's important could be, "It's the battery, bozo."

The reason is that batteries are central to the president's election-year message that green-tech will lead America into well-paid jobs and a revived economy. But politics aside, the $2.4 billion the Obama administration has funneled to the advanced battery industry points to a tooth-and-nail struggle as the United States endeavors to catch up to Asia in making cutting-edge lithium-ion batteries for use in vehicles.

"The workers at this plant, already slated to produce batteries for the new Chevy Volt, learned the other day that they’re also going to be supplying batteries for the new electric Ford Focus as soon as this operation gears up," Obama said Thursday at the Compact Power plant in Michigan. "By 2012, the batteries will be manufactured here in Holland, Michigan. So when you buy one of these vehicles, the battery could be stamped 'Made in America' – just like the car." Last week, he visited an electric-truck plant in Kansas City, Mo.

Developing US manufacturing prowess in new batteries is vital, analysts agree. Those batteries will power next-generation electrified plug-in vehicles, which are expected to dominate auto sales within a decade, they say. The nation that dominates batteries is also likely take the lead in overall auto manufacturing.

"The Obama administration is making a concerted effort to prevent the failure of the US auto industry, and that will bolster development of the US battery industry through 2012," says John Gartner, a senior analyst at Pike Research, a Boulder, Colo., clean-tech research company. "But political shifts and market realities could remove that safety net."

Nine battery plants in the works

The huge federal investment has single-handedly vaulted the US toward becoming the globe's major supplier of advanced batteries for plug-in vehicles. Government funds have helped to finance 26 of 30 electric-vehicle battery and component plants now under construction – including nine lithium-ion battery manufacturing plants. Four of the nine are expected to be producing batteries by year's end.

By 2012, those 30 factories will have enough capacity to supply 20 percent of the world's advanced vehicle batteries, according to a new report by the US Department of Energy. That share could rise to 40 percent by 2015.

"There's no question this federal investment has given US battery manufacturers a huge push in the right direction," says Vishal Sapru, industry manager for energy and power systems for Frost & Sullivan, a market research firm. "The funding has contributed significantly to giving the US at least a chance to play in this arena."

But he and others note that the US industry will need additional research and development funding to develop technologies that are more advanced than lithium ion, if the US is to become solidly planted as a global leader in electrified vehicles.

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