Firms ask Washington for Billions to Build Car Batteries in US

Fourteen U.S. technology companies are joining forces and seeking $1 billion in federal aid to build a plant to make advanced batteries for electric cars, in a bid to catch up to Asian rivals that are far ahead of the U.S.

The effort, the latest pitch from corporate America to inject federal dollars into a project, is similar to an alliance that two decades ago helped the U.S. computer-chip industry restore its competitiveness. Participants include 3M Corp. and Johnson Controls Inc.

Many experts believe battery technology and manufacturing capacity could become as strategically important as oil is today. Auto makers, including General Motors Corp. and Ford Motor Co., say they plan to roll out plug-in electric cars by 2010. But the U.S. has limited capacity to make the lithium-ion batteries those cars will need. Asian producers such as Panasonic Corp. dominate the car-battery field.

Federal energy laboratories, including the Argonne National Lab, are advising the alliance, and more companies are expected to join. Together, the consortium members estimate the plan to build the first large-scale lithium-ion battery plant in the U.S. could cost $1 billion to $2 billion.

Experts say the plan faces several hurdles, including its high cost and the fact the U.S. has lost the lead in battery manufacturing.

Ralph Brodd, a Nevada-based energy-storage consultant, recently published a report on battery manufacturing for the National Institute of Standards and Technology. He said that though much of the advanced battery technology was developed in the U.S., American companies "opted out" of battery production because of the low returns the business offered. Asian manufacturers picked up the business because of their proximity to makers of electronic devices, which need a steady supply of batteries.

Mr. Brodd said American companies now face significant hurdles in regaining lost ground, including the preference by Asian car makers to use Asian-made batteries in their hybrid models. However, he said U.S. concerns could leap ahead if they developed the right technologies.

"If you manufacture everything in China, you lose control of the technology," Mr. Brodd said.

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