Building the U.S. Battery Industry for Electric Drive Vehicles Progress, Challenges, and Opportunities: Summary of a Symposium (2012) / Chapter Skim
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advanced battery industry remains in a "most critical state of development," as A123 Systems executive James M Forcier has observed.4 The core issue is whether there be enough demand for hybrid and electric vehicles to sustain the industry.5 Another pressing question is whether 1 The American Recovery and Reinvestment Act of 2009 (P.
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These issues present important inter-related questions about the need to stimulate consumer demand, the prioritization of research funding to advance battery technologies, and the need for complementary infrastructure to support the electrification of transportation in the United States. NATIONAL ACADEMIES SYMPOSIUM To better understand the progress, challenges, and opportunities facing America's advanced battery industry for electric-drive vehicles, the National Academies' Board on Science, Technology, and Economic Policy (STEP)
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STRATEGIC IMPORTANCE OF ADVANCED BATTERY MANUFACTURING Many nations regard the advanced-battery industry as strategic, both as a means of reducing energy use and as an important manufacturing industry. This is no less the case for the United States.
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currently produces only about 1 percent of lithium-ion batteries. Japan accounts for 46 percent, South Korea for 27 percent, and China for 25 percent.10 Competing in the Market for Advanced Vehicle Batteries As Ann Marie Sastry of the University of Michigan pointed out at the symposium, battery cells using lithium-ion technology are regarded as the most likely candidates to replace nickel-metal hydride as the most common source of power storage in electric vehicles.11 A lithium ion battery produces electrical charges by lithium ions that flow between an anode plate and a cathode plate.
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Japan has targeted lithium-ion batteries for vehicles since 1992, when the Agency of Industrial Science and Technology and the Ministry of International Trade and Industry established the New Sunshine Program.13 South Korea's government has committed $12.5 billion in a bid to become the world's leading producer of advanced batteries.14 China, which is gaining fast, heavily subsidizes domestic battery manufacturers and requires foreign battery companies to manufacture in China if they wish to sell there.15 The Demand for Electrified Vehicles Moreover, demand for electrified vehicles has been stronger outside of the United States. Higher fuel prices, in large part due to high taxes, make hybrids and plug-ins a more economically attractive option in Europe.
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government has recently taken a number of active steps to establish a strong U.S. advanced battery industry and market for electrified vehicles.21 · The Department of Energy's Vehicle Technologies Program has made lithium-ion battery research and development a high priority since 2000.22 · The Department of Energy also leads a government-industry partnership called the U.S.
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Additional Federal Initiatives Symposium participants noted that the federal government also supports vehicle electrification in other ways: · Funding for Research and Commercialization · The Advanced Research Projects Agency-Energy (ARPA-E) , a new Department of Energy program that funds "transformational" energy-technology R&D, has funded $100 million for energy storage research.25 · Battery manufacturers are expected to share some of the $25 billion set aside under the government's Advanced Technology Vehicle Manufacturing Program to speed the commercialization of advanced battery technology.26 · Tax Incentives and Credits · The Advanced Energy Manufacturing Tax Credit program provides $2.3 million to companies to cover 30 percent of investments in new, expanded, or refurbished manufacturing plants producing renewable-energy equipment.27 · U.S.
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The state is raising requirements on automakers to sell a certain number of zero-emission vehicles and wants the carbon-intensity of all fuels cut by 10 percent.31 · Procurement The U.S. military is another important driver of advanced batteries.32 The U.S.
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Those early corporate commitments paid off when the Department of Energy awarded $1.3 billion of the $2.4 billion allocated for advanced-battery manufacturing projects under the American Recovery and Reinvestment Act of 2009 to Michigan-based factories, including battery plants by A123, Johnson Controls-Saft, Dow Kokam, and Compact Power, a unit of South Korea's LG Chem.37 In her remarks, Governor Granholm noted that this investment has helped to leverage nearly $6 billion in private investment in the 16 advanced battery and battery technology projects underway in Michigan. 35 Pike Research predicts the penetration rate of hybrid and plug-in vehicles will be 2.41 percent in 2015.
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SOURCE: Eric Shreffler, Presentation at July 26-27, 2010 National Academies Symposium on "Building the U.S. Battery Industry for Electric Drive Vehicles: Progress, Challenges, and Opportunities." Box C Growing an Advanced Battery Cluster in Michigan In her symposium address, Michigan Governor Jennifer Granholm predicted that the state "is well on its way to becoming the advanced battery capital of the world.
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39 See the summary of remarks by Eric Shreffler. Michigan's Advanced Battery Tax Credits initiative was created through an amendment to the Michigan Business Tax Act, Public Act 36 of 2007, to allow the Michigan Economic Development Corporation to extend tax credits for battery pack engineering and assembly, vehicle engineering, advanced battery technology development, and battery cell manufacturing.
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SOURCE: Eric Shreffler, Presentation at July 26-27, 2010 National Academies Symposium on "Building the U.S. Battery Industry for Electric Drive Vehicles: Progress, Challenges, and Opportunities." NOTE: The JCI Saft venture dissolved since the date of this presentation.
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SOURCE: Eric Shreffler, Presentation at July 26-27, 2010 National Academies Symposium on "Building the U.S. Battery Industry for Electric Drive Vehicles: Progress, Challenges, and Opportunities." Sridhar Kota of the White House Office of Science and Technology said in his opening remarks at the symposium.
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Other incentives include the Department of Energy's 1703 and 1705 loan guarantee programs42 and the 1603 program that gives cash grants in lieu of tax credits for renewable-energy projects.43 In the battery industry, such programs have complemented aggressive incentives offered by states such as Michigan At the basic research level, Dr. Kota noted that the Obama Administration has made advanced vehicle technologies one of its six top priorities for research funding.44 The Department of Energy's ARPA-E program is working on new composites for vehicles and "potential breakthroughs in new battery chemistries that are two or three or five times better than current technologies," he said, and manufacturing technologies "that could change the game altogether." In applied research, Dr.
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Tax Credits: To boost demand or electrified vehicles, Senator Stabenow said that she and other legislators are seeking to expand the current $7,500 tax credit now given to purchases of plug-in hybrid cars. This program applies only to the first 2,500 purchases and expires in 2014.
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The DoE's Office of Science, ARPA-E program, and Office of Electricity also are active in developing innovative battery technologies. Deployment: The Department of Energy also funds projects to demonstrate and deploy innovative electric vehicles and charging infrastructure.
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Cost reduction also is critical. Although lithium-ion battery packs for light tactical vehicles weigh one-third as much as advanced lead-acid batteries mountains -- a single gallon of gasoline "could cost up to $400" once it finally arrives.
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Electric vehicles, however, are no "silver bullet" to assure a sustainable business, Ms. Gioia said.
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Advanced Battery Consortium, he said. Now Compact Power, a unit of South Korea's LG Chem, is building a large plant in Holland, Mich.
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In her presentation, Anna Marie Sastry of the Advanced Materials Systems Laboratory at the University of Michigan and CEO of the Ann Arborbased advanced battery developer Sakti3, estimated that battery densities of around 500 watt hours per kilogram are needed in order to "see large degrees of electrification" of vehicles. 54 She predicted that when output of electric-car batteries hits 300,000 units a year, the price of lithium-ion fuel cells should drop from around $500 apiece now to $100 and meet the crucial threshold of around $300 per kilowatt.
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SOURCE: Tom Watson, Presentation at July 26-27, 2010 National Academies Symposium on "Building the U.S. Battery Industry for Electric Drive Vehicles: Progress, Challenges, and Opportunities."
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Chargers for electric vehicles are "ridiculously expensive today" and are made by "what was a cottage industry," she said. "We need main stream companies jumping into that." Currently, U.S.-based battery plants must also import conductive materials, foils, separators, electrolytes, and other essential ingredients.
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Based on these assumptions, 50,000 to 60,000 tons of lithium will be used in electric cars on American roads by 2050 -- roughly twice current global production. But many new lithium mines are under development.
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Battery Industry for Electric Drive Vehicles: Progress, Challenges, and Opportunities." Under aggressive projections of electric-car usage worldwide and conservative estimates of battery performance, lithium demand would reach 450,000 metric tons in 2050, Dr. Gaines noted.
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SOURCE: Linda Gaines, Presentation at July 26-27, 2010 National Academies Symposium on "Building the U.S. Battery Industry for Electric Drive Vehicles: Progress, Challenges, and Opportunities." presentation.
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Sperling said. "If we continue to follow the path we're on, trying to create an electric vehicle that is analogous to a gasoline vehicle, we are doomed to failure." Big government investments in public charging infrastructure also may be unnecessary.
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Amburg said. Fleet owners are starting to demand electrified vehicles.
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BATTERY INDUSTRY FOR ELECTRIC DRIVE VEHICLES J UPGRADING THE WORKFORCE The need for a trained workforce is essential for the United States to compete globally in advanced-technology industries.
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Out-of-state students would conduct laboratory experience through simulations, remote controls, and week-long visits to the Detroit campus, he said. Wayne State is adding laboratories for fabricating new materials and cells, electric controls, characterization of battery packs, and electric-drive propulsion systems.
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65 Five out of six jobs in the advanced battery industry will require middle- to high-skill workers, Mr. Kamischke said.
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FIGURE 7 Supply and Demand for Middle-Skill Jobs in Indiana SOURCE: Robert Kamischke Presentation at July 26-27, 2010 National Academies Symposium on "Building the U.S. Battery Industry for Electric Drive Vehicles: Progress, Challenges, and Opportunities." K
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Prices for plug-in hybrid batteries "seem to be on track" to drop from around $2,500 now to $1,700 in 2012. "But when you go to higher mileage plug-ins and electric vehicles, the targets get a lot tougher," he said.
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Kentucky's Advanced Battery Manufacturing Center The state of Kentucky is another state that is seeking to play a role in advanced battery manufacturing by establishing a new R&D center with Argonne National Laboratory. The Kentucky-Argonne Battery Manufacturing Research and Development Center, based at the University of Kentucky, is preparing to erect a new laboratory building with $10 million in funding from NIST and $4 million from the state.
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L THE ROAD AHEAD Michigan's Next Steps Now that Michigan has enticed battery manufacturers to set up factories in the state, the MEDC is reassessing its "economic tool kit" to promote the next phase of development, Eric Shreffler, who leads the MEDC's advanced energy storage program, said in his presentation.
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"And it won't be a narrow valley." To sell electric vehicles, car makers must make them affordable, offer the right technologies to consumers, and develop the supply chain, he said. While the U.S.
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We can create the best battery in the world, but without vehicles to put them in this industry will go back overseas and we will have stimulated another country's industries." One proposal is for the government to boost demand through purchases of electric vehicles for federal fleets. Senator Stabenow noted that the government will, as a symbolic measure, buy the first 100 Chevy Volts.
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The Cash for Clunker's program, which was "successful beyond my wildest dreams," used such an approach, she said. "That is more helpful than waiting until you fill out your taxes the next year." Establishing Common Standards Standards are another major question facing the advanced battery industry.
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As Senator Stabenow noted, it will not be enough to have electric vehicles on the road; "We have to make sure that the infrastructure in there as well." Most speakers agreed some public charging facilities are needed to ease the so-called "range anxiety" of drivers who fear they will be stranded should their car batteries run out of power.
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69 The government's Smart Grid initiative should aid the rollout of electric vehicles, Mr. Davis of the Department of Energy said.
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Alexander said that at this stage, demand-driven stimulation is more important than stimulating manufacturing and research. He warned that if electric vehicles are not built and purchased, "there is a risk that this industry will go away." He suggested that the electrification of military applications, postal fleets, and other government vehicles can help create this demand.
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OVERVIEW 43 sustainable, and to make some real progress on moving our country away from petroleum dependence." This conference report captures the views of state and federal officials as well leaders in industry and academia on the future of the advanced battery industry in Michigan. The next chapter provides detailed summaries of their remarks.
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