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An Update on Advanced Battery Manufacturing

October 16, 2012 - 9:41am

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The advanced battery market is expanding dramatically in the United States and around the world -- from $5 billion in 2010 to nearly $50 billion in 2020, an average annual growth rate of roughly 25 percent. Earlier this year, the Toyota Prius became the third best-selling vehicle in the world. Virtually every major manufacturer – Ford, Nissan, GM, Honda, Hyundai, Toyota, BMW, and others – are preparing new models of hybrid and electric vehicles with improved performance, longer range, and lower costs. More than 40 models of hybrid and electric vehicles are already available, and that number will nearly double by next year. This is good news for consumers, because today’s electric vehicles are fueled for the equivalent of about $1 a gallon -- and the next generation will bring even bigger savings.

Four years ago, virtually all advanced vehicle batteries were built overseas, and it looked like the United States might miss out on this enormously important, rapidly expanding market. 

That is why, starting in the previous administration, the Department of Energy has made a number of investments to support these innovative technologies. Under this Administration, the Department of Energy, with strong bipartisan support, awarded $2 billion in grants to 29 companies to build or retool 45 manufacturing facilities spread across 20 states to build advanced batteries, engines, drive trains and other key components for electric vehicles. More than 30 of these plants are already in operation, employing thousands of American workers, and our grants were matched dollar for dollar (or more) by private investments. 

From big name companies like GM, Johnson Controls and Delphi to smaller, cutting-edge companies like Celgard, these companies are on the front lines of America's effort to ensure that our auto industry continues to leverage American innovation. In such an intense global market -- where competitors in Asia and Europe adapt quickly to changing technology and consumer demands -- the riskiest strategy of all is not competing aggressively for the technologies of tomorrow and the jobs that come with it. 

In an emerging industry, it’s very common to see some firms consolidate with others as the industry grows and matures. Accordingly, today Johnson Controls, a world leader in energy technologies based in Milwaukee, Wisconsin, has offered to purchase two Michigan manufacturing facilities built by A123 Systems, along with other assets in A123’s automotive battery business. As part of a bankruptcy filing today, A123 announced that it has obtained bridge financing from Johnson Controls to continue operation of its facilities. 

A123, which has been building batteries for electric vehicles as well as for the nation's power grid, quickly established itself as an innovative player in the market. Today’s news means that A123’s manufacturing facilities and technology will continue to be a vital part of America’s advanced battery industry.  

A123’s promising technology has a long history of bipartisan support. In 2007, the company received a $6 million dollar grant as part of the Bush Administration's efforts to promote advanced battery manufacturing, and the company has used $132 million of a 2009 grant from the Department of Energy. 

From Columbus, Georgia to Batesville, Arkansas to Brownstown, Michigan, our investments in manufacturing advanced batteries and other electric vehicle components are putting Americans to work and helping make our country more competitive. Here are just a few examples of this progress:

  • This summer, Rockwood Lithium announced the opening of their expanded manufacturing facility in Kings Mountain, North Carolina. They have hired 75 workers and plan to hire even more as their business continues to grow. 
  • The Delphi plant in Kokomo, Indiana, which had been hit by devastating layoffs during the great recession, is growing again as workers produce components for hybrid electric vehicles. 
  • Earlier this year, EnerG2 celebrated the opening of its new electric vehicle battery components manufacturing facility in Albany, Oregon. 
  • Envia Systems of Newark, California, building off technology invented at Argonne National Laboratory and developed with the help of a decade of sustained support by the Department of Energy, recently achieved a breakthrough that will triple the energy density of their batteries while cutting the cost of batteries in half. 

Prior to this investment, a battery with a 100 mile range cost $33,000. Because of technology improvements and the high volume manufacturing capability we have today, the estimated cost is down to about $17,000 and is expected to drop to $10,000 by 2015. As costs come down even further, the market for hybrids and electric vehicles – which has nearly doubled in the U.S. since last year – will grow even further. 

Most importantly, more and more of those cars and their components will be built right here in America – continuing to support American workers and new technologies that will reduce our dependence on foreign oil. 

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