GM Asks for Government Support on Battery Development

Written by Dana Nuccitelli

General Motors Chairman and Chief Executive Rick Wagoner, appearing on Capitol Hill, called on Congress to support advanced-battery development in the U.S., which he said lags far behind the government-supported development efforts in Japan and South Korea.
The lengthening lead Japan’s auto makers hold in securing supplies of advanced batteries to power the next generation of automobiles has become a rallying point for the U.S. auto industry in seeking at least $25 billion in government loans.
Over the past decade, Japan’s auto giants have been teaming up with its electronics companies, which have dominated global battery manufacturing for laptop computers, mobile phones and other products. Now the American auto companies are playing catch-up.

Securing an adequate supply of batteries over the next few years has become a growing concern for auto makers everywhere. The U.S. industry is leery of depending too heavily on foreign battery makers allied with Japanese auto makers, for fear those suppliers would give priority to filling the orders of their Japanese partners.

“Moving from imported oil to imported batteries” wouldn’t address the nation’s energy-security concerns, said Mark Fields, head of Ford Motor Co. operations in the Americas, speaking recently in Washington. “Bold and dramatic incentives are needed to accelerate the commercial development of high-energy power batteries right here in the U.S.”

For now, some U.S. auto makers are seeking supplies from Japanese battery makers. GM recently announced plans to buy lithium-ion batteries for 100,000 hybrids from Japan’s Hitachi Ltd., and Sanyo Electric Co. supplies batteries for Ford hybrids.

But Japanese companies continue to invest in their own facilities. Nissan and partner NEC announced in May that they will build a factory that has capacity to make 65,000 lithium-ion batteries a year by 2011, as the car maker aims to become the world’s largest producer of electric vehicles.
Unlike the U.S., Japan has made fuel efficiency a top priority for years. While Detroit has focused on highly profitable large trucks and SUVs in recent years, Japanese auto makers have continued to concentrate on smaller, fuel-sipping vehicles, including hybrids. This strategy has paid off, and left American automakers scrambling to adapt to the changing market.

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