U.S. Automakers Seek More Government Funds for Electric Vehicle Battery Research

January 11, 2007 by Jeff Shepard

The Bush Administration has been approached by the "Big Three" U.S. automakers with suggestions that the government should triple its funding of electric vehicle (EV) lithium-ion battery research. After a meeting with President Bush by the heads of General Motors Corp., Ford Motor Co., and the Chrysler Group in November, the companies sent their recommendations, which included the requests for additional funding of research, as well as offering other economic incentives to encourage the manufacturing of EVs, in December.

Judging from the vehicles unveiled at the recent Detroit Auto Show, EV batteries appear to figure prominently in the future plans of the American auto companies. DaimlerChrysler, Ford, and GM are exploring versions of gasoline-electric hybrid vehicles that can be recharged by plugging into wall outlets, and GM's plans for its Chevrolet Volt involve even more advanced technology to enable up to 40 miles of electric-only transportation. Nonetheless, these vehicles will remain "speculative" until overall costs are lowered and refinements are made to lithium-ion battery technology.

Thus far, all of the hybrids sold in the U.S. market utilize Japanese batteries, and the Japanese government has given top priority to maintaining the nation's dominance over the global battery market. In September of 2006, Japan's Ministry of Economy, Trade, and Industry requested a doubling of government funding of battery research for 2007 ( to approximately $41 million). Complicating matters for the U.S. automakers, in order to maintain their market dominance, the Japanese firms have not shared the results of their battery research.

By comparison, President Bush suggested $31 million for battery research in the 2007 federal budget via the U.S. Department of Energy (DOE), a 27% increase over the previous year's budget. The U.S. automakers have suggested that funding could increase to $100 million a year over a five-year span, for a total of $500 million. Part of the DOE's battery research funding is funneled to the U.S. Advanced Battery Consortium (USABC), which is managed by Ford, GM, and DaimlerChrysler. The companies match some of the government spending and help disperse the funds among universities, researchers, and suppliers. The USABC is part of the FreedomCar consortium, which receives about $300 million yearly form the three automakers.