Battery makers in battle for aid from US government

By Richard Waters in San Francisco Published: May 18 2009 03:00 Last updated: May 18 2009 03:00 A handful of US battery makers are scrambling for government support ahead of a deadline this week as the US struggles to win back lost ground from Asian competitors in one of the world's next important technologies. The race is also the first test of how the administration will use the near$190bn in stimulus money earmarked this year to support "green" technologies, from alternative fuels to energy-efficient building materials. Advanced batteries are seen as a strategic technology, given their importance to electric and hybrid vehicles, and their military applications. As with the chip industry two decades ago, the US has lost the lead to manufacturers in Asia that have invested in highvolume manufacturing. "The US and the Europeans have been asleep at the switch," said Paul Beach, head of business development at Quallion, a battery maker that hopes to raise up to $200m with support from the stimulus funds. "This industry probably couldn't get kick-started without this," he added. "US companies are already well behind in process manufacturing technology," added Jim Greenberger, head of a consortium of small battery makers looking for $600m to build a joint manufacturing plant. "As bad a state as our auto industry is in right now, it will be much worse if we don't start building [battery] cells in the US." Many of the breakthroughs in the lithium-ion technology used in advanced batteries were made in Japan, and most manufacturing is centred in Japan, South Korea and China. With finance hard to come by, how the US uses the $2bn of stimulus money set aside for advanced battery makers could shape the industry. Applications are due tomorrow, with a decision on how to use the money expected as early as July. That is months ahead of decisions about how to apply the rest of the stimulus money, which are expected to play a similarly -critical part in structuring other parts of the "green tech" industries. "There's absolutely no question the government will be picking winners and losers" in the environmental technologies, said Brian Fan, head of research at the Cleantech Group. Among the choices the US energy department faces is whether to support a range of competing technologies, or whether to focus investment in a small number of potential "champions". Among the most ambitious US start-ups, A123 Systems has -indicated it wants to raise about $1.8bn.