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Giving you a charge

Published by The Editors | Filed under batteries, policy

What is it that electric cars, or hybrids, or plug-in hybrids need in abundance? Batteries. Is the U.S. interested in competing in the industry to supply those batteries. We hope so, but the jury may still be out on that question.

The big question is whether Ener1 or any other U.S. battery maker will be a major player by the time a mass market develops for electric cars, which could take a decade. The field is already crowded. Other U.S. companies claim to have prototypes that work at least as well as Gassenheimer’s. They include A123 Systems, a Massachusetts Institute of Technology spin-off, and Franco-American venture Johnson Controls-Saft, which has snared contracts with Ford Motor (F), BMW, and Mercedes-Benz (DAI). But the Americans face Asian rivals with deeper pockets and far more lithium-ion experience.

Should Uncle Sam provide billions in loans and grants to a promising but unproven business? Or should the government wait for the market to sort things out before it backs a U.S. company? The risk is that by then another major industry could go the way of memory chips, digital displays, the first solar panels, and the original lithium-ion batteries used in notebook PCs and cell phones. American scientists, funded by federal dollars, were at the forefront of each of those. Yet the industries—and the high-paying manufacturing jobs that go with them—quickly ended up in Asia. U.S. labor costs and taxes drove many operations abroad, but often industries fled simply because Asian governments, banks, and companies were more willing than Americans to risk big capital investments.

If we had a vote, and we actually do (every year), we’d say unequivocally yes, the United States needs to help fund the electric car battery industry. It is a strategic industry for the U.S.

Key Stats: President Barack Obama has set a target of 1 million electric cars on U.S. roads by 2012.

Resources: Business Week - The Electric Car Battery War
IEEE Spectrum - http://www.spectrum.ieee.org/sep07/5490

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