By Steven Mufson
Washington Post Staff Writer
Saturday, January 31, 2009
Two big batteries stand side by side at the General Motors testing lab in Warren, Mich.
One is an artifact, built a dozen years ago. Weighing 1,200 pounds, it could fill the back of a large pickup truck. Standing on one end, it towers over GM's Robert A. Kruse, executive director of global vehicle engineering for hybrids and electric vehicles.
The other battery is new and produces the same amount of energy but is a relatively trim 400 pounds. It comes up just past Kruse's shoulder, and it will squeeze into the body of the compact Chevy Volt that GM plans to start producing next year.
"You can see the direction the technology is driving us," Kruse said.
But while battery technology has traveled far from the big clunkers in the late 1990s, the costs and limits of current batteries remain the biggest obstacles to mass marketing plug-in vehicles. Although nearly every major auto company is moving ahead with electric car plans, the batteries still cost about $8,000 or more each, experts estimate, and that could make electric cars money-losers. Moreover, electric carmakers warn, the industry's manufacturing capacity is limited, and few factories are in the United States.
Solving these problems could become more critical as President Obama pushes to toughen fuel-efficiency standards. Automakers are lobbying Congress for help establishing a battery industry in the United States.
In the House version of the big economic stimulus package, at least $2 billion -- half in spending and half in federal loan guarantees -- would go to promoting advanced battery technologies and manufacturing.
On Jan. 23, the entire Michigan congressional delegation sent a letter to President Obama urging him to support renewable-energy industries and electric-car batteries in particular. Lawmakers from the state have also implored the Energy Department to speed the release of money earmarked for fuel-efficiency research. "We cannot move from a dependency on foreign oil to a dependency on foreign-made technology," the letter said.
The issue for some is not whether battery development is needed, but whether it is the most cost-efficient means of reducing the nation's dependency on oil.
"You can heavily subsidize small volumes of electric cars and lightly subsidize high volumes, but you cannot heavily subsidize high volumes," said Menahem Anderman, chief executive of Total Battery Consulting. "The environment and energy security will benefit more if we had a million hybrids in the United States than 10,000 [electric vehicles], and technologically and economically this is more realistic."
For now, batteries represent the greatest obstacle to an electric car, said J.B. Straubel, chief technical officer at Tesla Motors, a small, Silicon Valley-based maker of all-electric luxury sports cars. "There is no question that we can make 10 million cars. The motors are not a problem. Power electronics the same. But with batteries, you're beyond the existing manufacturing base. You need to build a whole new industry to make the batteries, as big as the industry that is making the cars themselves."
According to Lux Research, a consulting firm specializing in emerging technologies, the electric-car battery market is projected to grow sixfold by 2013. About 70 percent of it will be lithium-ion batteries. Similar technology could become widespread in storing wind and solar energy for utilities, too.
So far, Asian battery makers have a leg up. General Motors this month announced that it had passed over U.S. battery firms and chosen LG Chem, a Korean firm, to make the lithium-ion battery cells for the Chevy Volt. (GM plans to assemble the cells at a $30 million plant it wants to build in Michigan.)
"The point is LG Chem, thanks to years and years in the prismatic lithium-ion cell business and also thanks to massive financial technological support from Korea Incorporated, has a several-year head start," said Bob Lutz, GM's vice president for global product development. "This is why we say if we're serious about electrification of the automobile, we do need, as part of a national energy policy, government support for advanced battery development. . . . These are the sort of things I'm hoping the Obama administration will understand."
A123 Systems of Watertown, Mass., was one company that lost out in the competition to become the battery maker of choice for General Motors.
Founded in 2001, it licensed technology developed at the Massachusetts Institute of Technology. Today the company has more than 400,000 square feet of manufacturing space, mostly in China and Korea as well as Massachusetts.
But it has yet to land a passenger-vehicle deal (or show a profit) and is burning through cash as it strives to expand. It sells batteries for machine tools to Black & Decker, which accounted for 63 percent of A123's total revenue from inception through Sept. 30 last year.
A123 campaigned hard for the GM contract. GM's Lutz said that the A123 batteries were "good for power tools," but that "LG Chem is just farther along" on the batteries GM was seeking.
Other American companies, EnerDel and Altairnano, are also still looking to capture pieces of the electric car battery market.
Now the U.S. firms are turning to the federal government to help them rev up production, and there are few voices fretting about the perils of industrial policy, especially when the economy needs a boost. Both sides of the aisle in Congress have backed government support.
A123 has applied for a $1.84 billion low-interest loan from the Energy Department under the advanced vehicle technology program created by energy legislation in 2007 to build manufacturing facilities in the United States. EnerDel has asked for $480 million to expand facilities in Indiana. (Both of the state's senators, GOP Sen. Richard G. Lugar and Democratic Sen. Evan Bayh have urged Obama to increase support for battery technology.) The Energy Department has received about 75 applications for about $38 billion in loans; the program is authorized to issue $25 billion.
Fourteen companies have banded together in a National Alliance for Advanced Transportation Battery Cell Manufacture seeking $1 billion to $2 billion in investment over the next five years. They say it is the only way to compete with Asian manufacturers.
For carmakers, the choice of battery is a matter of strategy as well as technology. Three-quarters of American motorists drive 40 miles or less a day, so carmakers are trying to decide how much range an electric car battery should have.
GM plans on a battery pack big enough to last 40 miles, at which point a small gasoline engine will take over. Some rival companies are considering a smaller battery pack that might go only 20 miles, still enough to serve the needs of many local commuters without adding as much weight and cost.
Shai Agassi, the chief executive of Better Place, which is building electric car infrastructure in Israel, Hawaii, Northern California and several other places, thinks electric cars should have batteries only. He proposes setting up swap stations where motorists on long trips could exchange a depleted battery for one fully charged.
"We just don't think that the answer to how to extend the battery is to put a power plant in our trunks," he said.
One company is already making all-electric cars, albeit in tiny volumes. Tesla Motors has sold just more than 100 cars for about $100,000 each.
Ted Merendino, a sales associate for Tesla Motors, recently popped open the trunk of one of the sleek all-electric sports cars in the company's show room in Menlo Park, Calif., and started talking about the battery pack that takes the car from zero to 60 mph in just 3.9 seconds. The pack has 6,831 lithium-ion cells in parallel sheets that can power the car for 220 to 244 miles depending on the use of air conditioning and the radio.
The car saved weight by not having a conventional gasoline engine; the electric motor weighs only 130 pounds, Merendino said. But the battery pack is 1,000 pounds, far more than a conventional engine and making the Tesla sports car 700 to 900 pounds heavier than its closest equivalent, the Lotus Elise.
"Heat is a battery-killer," Merendino said. To counter that, Tesla cools its engine with a heat exchanger and standard coolant.
Recharging takes much more time than filling a tank with gasoline, but much less time than most people keep their cars parked at home. With a special 220 volt, 60 amp plug and special wall socket, it takes about 3 1/2 hours to fully recharge.
Tesla has had its share of production problems, with parts coming from at least three foreign countries. But boosting battery production to serve an entire industry would be a problem of a different magnitude.
If you commandeered all the lithium-ion battery manufacturing capacity in the world, you would be able to make about 1 million plug-in cars a year, said Tesla's Straubel. Moreover, he noted, there is virtually no spare capacity sitting idle.
"If you're talking about tens of millions of cars," he said. "You're talking about building new companies."
Staff writer Kendra Marr contributed to this report.