Tech Firms Seek $1 Billion For U.S. Car Battery Plant - InformationWeek

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Tech Firms Seek $1 Billion For U.S. Car Battery Plant

By working as a block, the tech companies aim to narrow the lead of Asian manufacturers, which supply the majority of batteries used today in hybrid vehicles and electric cars.

More than a dozen tech companies announced Thursday an alliance seeking more than $1 billion in federal funding to build a U.S. car battery plant that would compete with market-dominating Asian manufacturers.

The companies, which include 3M and other chemical and battery makers, are calling themselves the National Alliance for Advanced Transportation Battery Cell Manufacture, or the "Alliance," for short. The group is modeling itself after Sematech, a group of U.S. semiconductor manufacturers that formed in the late 1980s and received almost $1 billion in government funding to build plants that could compete against Asian rivals.

The Alliance said it needs between $1 billion and $2 billion over five years for research and to build a competitive manufacturing facility that would be shared by the consortium's members. Most of the money is expected to come from the federal government.

The market for rechargeable lithium-ion batteries for cars is too small to support the building of a plant by any one company, the group said. By working as a block, the tech companies with federal money would have the resources to narrow the lead of Asian manufacturers, which supply the majority of batteries used today in hybrid vehicles and electric cars. The battery industry in those countries receives government subsidies, according to the Alliance.

The group is receiving advice and support from the Argonne National Laboratory. In the future, U.S. automakers are expected to play an important role in the alliance.

"U.S. truck and automakers and representatives of the Department of Defense will be invited to serve on the Alliance's advisory board," Alliance attorney James J. Greenberger of Reed Smith LLP said in a statement.

The advisory board will help the Alliance move toward standardized battery cell formats that will simplify manufacturing and lower costs, Smith said.

Battery power is expected to play an increasing role in transportation as U.S. automakers move their gasoline-burning product lines to electric power, which is less damaging to the environment and weans the nation off its oil dependency.

Other founding members of the alliance include ActaCell, All Cell Technologies, Altair Nanotechnologies, Dontech Global, EaglePicher, EnerSys, Envia Systems, FMC, MicroSun Technologies, Mobius Power, SiLyte, Superior Graphite, and Townsend Advanced Energy.

Earlier this month, Andy Grove, former chairman of Intel, told The Wall Street Journal that he is urging Intel CEO Paul Otellini to launch a battery-making business within the company. Grove said the lack of manufacturing capacity for batteries in the United States presents an opportunity for Intel, which owns a massive network of fabrication facilities.

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