Today, the United States announced a collection of significant stimulus investments in the next generation of supply chains for electric and hybrid vehicles.  The U.S. Department of Energy announced a total of $2.4 billion in grants that will fund 48 advanced battery and electric drive vehicle deployment projects to accelerate the development of U.S. manufacturing capacity for batteries and electric drive components .  This overall announcement represents the single largest investment in advanced battery technology for hybrid and electric-drive vehicles.

Among the noted supplier recipients are A123 Systems, who was awarded a $249 million matching grant to construct world class lithium-ion battery manufacturing facilities in the U.S., and Johnson Controls which was awarded a similar amount to deploy advanced battery supply capabilities. A123 has been previously designated by Chrysler as its prime battery supplier, while Johnson Controls, who has a joint venture with France’s SaftGroupe, was previously chosen to be a primary battery supplier to Ford Motor Company.

Other highlighted announcements included Compact Power and Dow Kokam, who are slated to receive over $300 million for manufacturing battery cells and materials. Celgard in Charlotte North Carolina is slated to receive $49 million to expand its separator production capacity to supply lithium-ion battery manufacturers.   All three of the U.S. automotive OEM’s, Chrysler, Ford, and General Motors will receive a total of $400 million to manufacture advanced hybrid and electric vehicles and electronic drive components.

This announcement comes none too soon as countries such as China, Japan and Korea are also deploying high volume, globally competitive advanced battery and high volume manufacturing capabilities.  China is also is vying to be a world leader in electric cars,  placing advanced battery technology and manufacturing capability as a high priority and establishing a goal to support capacity to produce 500,000 hybrid or all-electric vehicles by the end of 2011. That represents nearly twice expected U.S. capacity plans.  In a recent op-ed editorial for the Washington Post, (free sign-up account required) noted venture capitalist John Doerr and General Electric Chairmen and CEO Jeff Immelt declared that the U.S. is clearly not in the lead in green technology development, with that position being held by China.

In essence, the U.S. government has now become a significant venture capitalist in the future supply chain of alternative energy vehicle production.  The challenge and the work among the recipient companies must now accelerate in earnest in the race for innovation and global supply chain competitiveness. 

Supply Chain Matters will continue to focus coverage on the worldwide deployment of advanced battery and electric vehicle supply chains.

 Bob Ferrari