US government awards $2.4 billion in battery grants for electric vehicles

US president Barack Obama yesterday announced stimulus funds amounting $2.4 billion for the manufacture of next-generation batteries, components and all-electric vehicles.
 
While speaking at Wakarusa in Indiana, the president said: "You're living every day with the consequences of this recession and the financial meltdown." "We have to harness the potential - the innovative and creative spirit that's waiting all across America."

The grants will go to 48 projects in 25 states with the maximum amount going to Michigan which has 11 projects and Indiana will come second with 7 projects.

The companies who win the grants have to invest an equal amount matching the federal funds.

The US Department of Energy expects the companies to spend 70 per cent of the funds by the end of September 2009, with all funds spent by September 2011.

The $2.4 billion in grants announced by president Obama and vice president Biden includes: $1.5 billion to US-based manufacturers to produce batteries and improve its recycling; $500 million to produce drive components for electric vehicles; $400 million to buy hybrid and all-electric vehicles for tests and demonstrations in several locations including education and training. 

Matt Rogers, a senior advisor at the Department of Energy said the funds will result in the creation of tens of thousands of jobs in the US, with 20 per cent of the amount earmarked for small businesses.

He further stated that currently all technology for hybrid and all-electric vehicles is manufactured overseas, and this funding programme is meant to create US manufacturing base for the next generation of vehicles which will also have military and utility applications.

At present, hybrid vehicles use nickel-cobalt batteries whereas latest models of electric cars run on lithium ion batteries which are lighter and more compact.

Michigan's share of $1.36 billion is expected to create initially 6,800 jobs which will grow to 40,000 in the next decade.

More than 165 companies, from small firms to giants vied for the $2.4 billion funds with a focus on clean technology meant to reduce country's reliance on oil, which is part of the $787 billion economic stimulus package announced in February.

The grants will serve as a lifeline for companies for whom it was difficult to get funds for construction of production facilities especially for new technology, due to the credit crunch.
The recipients

Wisconsin-based automotive major, Johnson Controls, a supplier to Ford, is the top recipient getting $299 million to produce nickel-cobalt batteries.

A123 Systems which supplies Chrysler Group, will receive $249 million for its Michigan factory to make lithium ion battery packs.

Auto giants General Motors, Ford and Chrysler together bagged $413 million in grants.
Dow Kokam will receive $161 million for its batteries. LG Chem's Compact power which is set to make batteries for GM's Chevy Volt electric car will get $151 million.

Leading recipients of the grants are: